Interpublic Group reported 6.1% organic revenue growth for 2015 on total revenues of $7.54 billion. The company’s organic growth in the fourth quarter of the year was 5.2% with total revenue of $2.2 billion.
So far, with three of the big agency holding companies reporting results, IPG leads the field in organic growth which is viewed as a key indicator of health within the advertising and marketing sector. Organic revenue strips out acquisitions, divestitures and currency fluctuations.
By comparison, Omnicom Group reported earlier this week that it had 5.3% organic growth for the year and 4.8% growth in Q4. Also reporting earlier this week, struggling Publicis Groupe reported 1.5% organic growth for the year and 2.8% for Q4.
Like Omnicom, IPG provided a cautious outlook on a teleconference with analysts and investors Friday morning saying it expects to achieve organic growth this year of between 3% and 4%, given concerns about the volatility in the financial markets and global economy. Omnicom earlier provided a 3% to 3.5% organic growth forecast for 2016. Publicis described the coming year as “transitional,” indicating that it doesn’t expect to be firing on all cylinders again until 2017.
Interpublic CEO Michael Roth told analysts he was very pleased with the company’s 2015 results and said that the “tone of business” remains solid going into the new year. Two indicators of the company’s confidence in its ability to perform well this year, he said, were the firm’s announcements today that it was increasing its dividend by 25% and that the board of directors had authorized a new program to repurchase up to $300 million of its common stock.
Clients haven’t put the brakes on spending, Roth said, but he noted that there is some marketer “angst” about the economic volatility and potential roadblocks to liquidity. And he stressed that clients are scrutinizing more closely where their ad dollars are going and what the return of those investments are. “It puts an added burden on us to show [that those expenditures] move the needle,” he said.
By region, both the U.S. and UK continued to perform well with 2015 organic growth of 6.8% and 6.6% respectively. APAC also remained strong with 8.3% growth. Continental Europe turned in a tepid 1.4% growth. Growth in Latin America was 4.7% with Brazil’s widely-reported troubles off-set by other countries in the region.