IPG Has Paid Income Taxes The Past Five Years

Here’s the response from the company to our IPG tax item that ran in the last column:

“IPG pays income taxes all over the world. In 2013 alone, IPG paid $21 million in U.S. income tax to state and local governments. Also in 2013, we paid $91 million in income tax outside the U.S. – so we paid $112 million in income taxes just last year. And over the last five years, IPG has paid approx. $400 million in income taxes, and significantly more if you include the individual, employee and VAT taxes we also pay in the markets where we operate. 

   “We are an extremely responsible tax citizen of the world and our 2013 effective tax rate of 39% is higher than our peer group – Omnicom’s hovers around 34%. The fact our tax rate is higher than our peers is not necessarily a good thing, but to call us out without doing any research about our peer group is not cool… For the specific band of U.S. federal tax purposes – which is the data the Institute on Taxation and Economic Policy covers – IPG has a tax loss from 2004 to 2006, which has been carried forward (U.S. tax law permits losses to be carried forward for 20 years) to offset taxes in the past number of years – hence we do not pay U.S. federal income tax. 

   “I don’t think that warrants a blanket comment like ‘Yup, that big ass agency holding company headed by Michael Roth. And we wonder why people perceive advertising professionals as highly as car dealers.’ Especially when our effective tax rate is 39%, and when we paid $400 million in income tax over the past five years, and significantly more if you include all the other tax buckets. The headline is flat-out wrong. You could correct it by saying ‘IPG Paid No U.S. Federal Income Tax,’ but even then, I don’t think the post is fair, based on the above.”

   Points well taken for the most part, although we tend to be somewhat snarky and that won’t stop. But now you have the facts on IPG’s tax-paying status straight from the horse’s mouth so to speak.   

In an effort to celebrate the often time stellar work agencies do for non-profits and other causes, ACT Responsible, in partnership with the Gunn Report, is launching The Good Report, an annual collection and celebration of innovative cause-related campaigns. The Good Report honors the Top 30 Campaigns for Good, the Top 20 Agencies, the Top 10 Networks and the Top 5 advertisers. 

You've probably heard the "agencies must change or die" mantra before. It rears its head about every three years or so. Its latest incarnation involves the gyrations and machinations holding companies must go through to streamline the cobbling together of disparate services into one cohesive offering that can serve the wildly varying needs of today's brands. Mixpo CEO Jeff Lanctot, an agency veteran thinks he has some direction and has shared his ideas is a Wall Street Journal piece. His four points cover the need for agencies to master un-siloed mult-screen, multi-channel planning, to offer managed services through partnership with software companies rather than competing with them, to eliminate the games played when it comes to the buying and reselling of media and, unsurprisingly, a collection of expertise that's relevant to the ever changing needs of today's brands.

Bonfire Labs, a growing content marketing agency, has made three new hires. The agency has brought in former Google Brand Studio executive producer and Goodby, Silverstein & Partners producer Tim Pries as executive producer. Also joining the agency as producer is John Hunt, former live action producer on Discovery Channels' MythBusters and Judy Leung, formerly with Hyphen magazine, will join as designer. Of the hires, Bonfire Labs Managing Director Jim Bartel said, “We are pleased to add these uniquely talented individuals to the roster of talent already at Bonfire Labs. Each of them will make a valuable contribution as we continue to leverage our unique position in the industry.”

Recommend (6) Print RSS
All content published by MediaPost is determined by our editors 100% in the interest of our readers ... independent of advertising, sponsorships or other considerations.
  • LatinWorks Promotes Two Execs to Leadership Roles

    LatinWorks has appointed 12-year veteran Christy Kranik to the role of executive vice president and general manager. In addition, Gabriel Garcia -- who joined the agency in 2008 when LatinWorks acquired his shop, Cultura -- has been appointed executive creative director. 

    Of the appointment of Kranik, who was recently named to Ad Age's Women to Watch list, LatinWorks CEO and Co-Founder Manny Flores said: "No one has played a more important role in the development of our culture and the growth of our business than Christy. Her managerial qualities and relentless client focus will serve us well as we continue the process of strengthening our agency's offering." 

    Of Garcia's appointment, LatinWorks CMO and Co-Founder Alejandro Ruelas said: "Gabriel is an exceptionally talented creative leader. His people and client skills are only rivaled by his creative qualities. Under his leadership we are confident that our creative product will evolve to be more progressive and consistently effective with the demands of our marketplace."

    LatinWorks is the largest Hispanic agency in the country, according to a 2014 report in Advertising Age. 

  • Programmatic Trading Firm Head Blames Millennials For Destroying Online Ad Model

    Speaking at the Malaysian Media Conference in Kuala Lampur last week, Michael de Rijk, Asia Pacific CEO of programmatic trading firm Xaxis, said: “Millennials think news is free and ads are annoying. They need to understand that journalists need to get paid." 

    In addition to the usual rhetoric about the need for the ad industry to amp up its efforts in making advertising more relevant and less intrusive, he noted that the media is missing an important element of the ad-blocking story -- that no one is explaining that online content, despite popular opinion is not free.  

    Rijk said, "No one is writing that -- no journalist is covering that." He added that while Yahoo made a recent decision to block Yahoo Mail users who have installed an ad blocker, "someone needs to maintain the servers." 

    Of course, blame for all of this goes back more than 20 years when early players in the Internet space rallied behind the "information should be free" cry which, of course, then became the de facto standard of doing business online. In most cases, no one, except advertisers, pays for anything online. That's been the norm for two decades; the quid pro quo agreement between consumer and producers of online content. 

    But ad blockers have tossed a monkey wrench into the mix and all hell is breaking loose. Tactics like native advertising and content marketing are working hard to make up for the loss, but for the most part those tactics are just stop gaps.  

    And so it really is a simple math problem. If there isn't any money to pay the people who create content or buy and maintain the servers that host that content, there will not be any content. No one's really coming at the story from that angle. And those who have lived almost their entire lives consuming content for free might need a good slap upside the head. In fact, everyone could use that slap. Because there are only two choices: ad-supported content or subscription-based content. And we all know most will take free if they can get it. 


  • Australia Tackles Agency Transparency With New Guidelines

    In Australia -- because for the last four days everyone in America has been in a turkey coma and not doing anything newsworthy, at least in the advertising space -- the Media Federation of Australia, in partnership with the Australian Association of National Advertisers, has unveiled its Australia Transparency Framework. 

    The Framework is a set of guidelines to help the industry tackle ongoing fraud and transparency issues in advertising, particularly in programmatic. An email to MFA members read: “One of the challenges our industry has faced this year, both globally and locally, is in the area of a perceived lack of transparency by media agencies in relation to value extraction and the resulting impact this has had on our industry’s reputation. The MFA Board, working with PwC, set out early in the year to better understand the issue and determine how the MFA can play a positive role on an area that sits squarely within the bounds of agency/client commercial in confidence dealings.” 

    The Framework addresses and sets guidelines for media agency rebates, commissions, agency trading desks, ethics and proper steps for disclosure. 

    Of the direction the MFA took, the email continued: “A number of different avenues have been explored, including compulsory and opt-in compliance processes and member codes. However, following extensive consultation, we believe advertisers' own compliance processes and sound agency/advertiser contracts are of much greater importance. As a result, the MFA Transparency Framework has been developed in conjunction with the AANA, to set expectations for agencies and advertisers in the key areas of advertisers' concern.”

  • DDB Chicago Celebrated Thanksgiving By Tossing Cranberry Sauce In Employees' Faces

    Last Wednesday as the entire ad industry and all of America was preparing for four days of turkey-infused rest, relaxation and football watching, DDB Chicago posted a cute Instagram video. 

    In the video, which is shot in slow motion, several DDB Chicago employees help demonstrate the importance of canned cranberry. 

    It's just a bit funnier than your standard agency holiday greeting. You can watch the video here.

  • Havas Health Launches Giving Campaign In Remembrance of Employee Lost In Paris Massacre

    In remembrance of Havas Health Art Director Christophe Foultier who lost his life in the Paris attack November 13, the agency has launched a giving campaign in concert with #GivingTuesday that will benefit Foultier's family, his wife and two children. To date, the campaign has raised $3,816. 

    #GivingTuesday, which occurs the Tuesday after Thanksgiving, marks the traditional beginning of the holiday giving season and is designed to bring people together in the spirit of giving. In 2014, 30,000 partners around the world participated. 

    Foultier, 39, lived in the western suburb of Paris, Courbevoie and was among the 130 people killed by four men with assault rifles during the massacre at Bataclan concert hall. In addition to his career in advertising, Foultier was also a musician who played bass guitar for more than 20 years, most recently with a newly formed band called Nite Nite. Along with his best friend, Randy Fagnaud, the pair were about to complete the band's first album. 

    In an open letter to the advertising community, Havas Global CEO Donna Murphy wrote, "We stand together in support of France and our Havas Health agency in Paris in mourning Christophe Foultier, a dear member of our team who lost his life in the massacre at the Bataclan last Friday. And now we can stand together to reach out to Christophe’s wife and children and help ensure that their future is financially secure." 

    Havas agencies, along with the entire global advertising community, can participate in the #GivingTuesday initiative now through Tuesday, December 1 by heading to a website the agency created in honor of Foultier, All4Chris.com (http://www.all4chris.com). On the site -- and on the donation sites the site leads to -- anyone can share memories they may have had with Christophe and make donations in support of Fortier's family.

  • Mother New York Founder Launches Retail Store

    After having founded and worked at Mother New York since 2003, Andrew Deitchman -- who left the agency in September -- has decided it is time for something different. Deitchman has launched The New Stand, a 150-square-foot shop located in the Union Square subway station in New York.

    The New Stand will sell everything from art supplies to bags to cosmetics to snacks on a rotating basis that will see new and different items populate the store on a weekly or even daily basis. Items will sell for 20 to 50% less than elsewhere because of partnerships that Deitchman has set up with brands and media companies. Some items will even be free.

    Of the setup, Co-Founder and COO Lex Kendall said: "The idea is to give people everyday conveniences by being a launch pad for brands to push product." In addition to sharing revenue on sales of items with ongoing fees, the store will have a free app that will be populated by ad-supported content from various media companies including Time as well as products from eBay.


  • In Shocking About-Face From Shiny New Object Syndrome, Agencies Shy Away From Snapchat

    In an about face that, unbelievably, has everything to do with common sense and nothing whatsoever to do with the usual agency-stye thinking when it comes to the latest and greatest social media toy, ad agencies are shying away from Snapchat.

    Ever since Snapchat launched its ad program and priced it at approximately $500,000 per ad, agencies have been skittish about making a commitment to the social network. Along with the high price tag, there has been concern over the ability of Snapchat to provide useful metrics for campaigns. That skittishness became more prevalent when Fidelity recently slashed the valuation of its stake in Snapchat by 25%.

    Even with upwards of 100 million unique visits per day, agencies and the brands they represent have said they need more concrete information about who uses the service and the ability to better measure campaign success.

    Of the concern over Snapchat's measurement and targeting capabilities, RAIN COO Nick Godfrey told Reuters: "If Snapchat doesn't get that figured out, they're in trouble."

    Sydney Williams, manager of social media marketing for General Electric, which just signed a deal with Snapchat for its second campaign, said: "I'm looking forward to Snapchat coming out with a little more in-depth analytics." 

    Early this year, Toyota ran a campaign with Snapchat but isn't sure it will continue citing (according to a representative who wished to remain anonymous) the networks inability to provide better targeting capabilities.  

    However, even though a recent Coke campaign on Snapchat saw 75% of users skip the ad after three seconds, Coca-Cola North America Senior VP of Content Emmanuel Seuge said: "Snapchat has earned a seat at the table in terms of the options that we look at for consumer engagement. 

    While the company has raised $1.2 billion from investors and is said to be valued at $16 billion, it lost $128 million in the first 11 months of 2014 according to a leaked financial statement and, during the same time period, had $3.1 million in revenue. Snapchat did not launch its advertising program until October of 2014. Re/code estimates Snapchat could hit $50 million in revenue by the end of 2015.

  • Saatchi & Saatchi Earns Perfect Score In LGBT Workplace Equality Study

    Saatchi & Saatchi LA, Saatchi & Saatchi New York and Team One received perfect scores of 100 percent on the 2016 Corporate Equality Index, a national benchmarking survey and report on corporate policies and practices related to LGBT workplace equality which is conducted by the Human Rights Campaign Foundation. The three agencies join the ranks of 407 major U.S. businesses that also earned top marks this year. 

    Of the perfect score, Saatchi & Saatchi Executive Director of Talent Kirk Guthrie said: “We are honored to be added to the HRC Equality Index and proud to serve as yet another face of equality in the workplace. Diversity, Inclusion, and a genuine belief in equality are core to who we are and a valuable part of what drives great creative work for our clients.”   

    The 2016 study rated 1,027 businesses in the report, which evaluates LGBT-related policies and practices including non-discrimination workplace protections, domestic partner benefits, transgender-inclusive health care benefits, competency programs, and public engagement with the LGBT community. Saatchi & Saatchi’s score in the study earned the agency the designation as a Best Place to Work for LGBT Equality. 

    Other agencies/marketing firms obtaining a perfect sore were DigitasLBi, Interpublic, Leo Burnett, MSLGROUP, Ogilvy, Razorfish, Re-Sources, Starcom and ZenithOptimedia.

  • Redditor Thinks Every Agency Should Have An 'Office Pervert' to Identify Sexual Innuendo In Work

    In the Shower Thought subreddit, Narokkurai posted: "Every ad agency should have an 'office pervert,' a boorish slob whose sole job is to review every pitch and find every innuendo/offensive subtext he can." 

    To other redditors who thought he was joking, Narokkurai clarified by writing: "No no no, this is to AVOID the penis. The Office Pervert is a specially trained operative, a man who can find a penis-shaped needle in a haystack, so the art department can correct it before it goes out to the public." 

    In a way, Narokkurai has a solid point. Far too much work seems to escape the common sense review process and not just for reasons of sexual innuendo of offensive language. Of course, it's also hard to contend with rampant -- but ever so faux -- social media "outrage" which often turns a seemingly innocuous ad into a poster child some egregious offense. In other words, there is always someone out there who will be offended by whatever is created no matter how harmless it may seem at the time of creation. 

    That said, it really would behoove an agency to instill a bit of common sense into the process to minimize the chance of turning the brands they work for into idiotic, insensitive dolts who are then ravaged by trolls who have nothing better to do than to sit around in their underwear and trash whatever crosses their screen. 

    As much as this function is needed, it's quite clear no one would pine for the job title of Office Pervert. Even if, deep down, they are one.

  • Former McKinney And TBWA Creatives Join Publicis Seattle

    The Seattle outpost of Publicis has hired a new creative team. Joining the agency are James McKenna and Mathew Trego. The team will be assigned the T-Mobile account. 

    McKenna comes to Publicis Seattle after a period of freelance work and two years as creative director with TBWA\Chiat\Day where he worked on Google, Disney, Grey Goose, Jimmy Dean and Reebok. 

    Trego joins Publicis from McKinney where he was associate creative director on Travelocity, ESPN, Mizuno Golf and Sherwin Williams. Prior to his six years with McKinney, Trego spent three years with Eleven Inc. working on Apple, Callaway and the Oakland A's. 

>> Mediapsssst Archives