IPG Reports Full-Year Growth Decline With Surprising Q4 Gains

IPG reported net revenue of $9.4 billion for the full year 2023 with a slight organic revenue decline (0.1%) for the period. The holding company had previously warned that it might lose some ground growth-wise for the year.  

But the firm had a better-than-expected Q4, with net revenue of $2.6 billion, up 1.7% and organic growth (which strips out M&A and currency impact) also coming in at 1.7%.   



Net income for the year was $1.1 billion and the firm’s operating margin was 16.7%. 

IPG CEO Philippe Krakowsky stated said the firm expects organic net revenue growth for 2024 in a range of 1% to 2%, and full-year adjusted EBITA margin of 16.6%, “which consolidates significant margin progress in recent years and will allow us to continue to invest in key growth areas of the business.” 

Krakowsky told analysts and investors on an earnings call that continued austerity in the tech and telecom category, combined with the struggles of digital agencies Huge and R/GA weighed heavily on results throughout 2023. And they’ll continue to be a drag on results this year as wellalbeit to a lesser extent.  

He noted that spending in the tech and telecom sector has “stabilized” somewhat but said it was hard to know when spending levels would return to more normal levels.  

As to the digital agencies, he noted leadership changes had been implemented at both, the most recent being the promotion of Lisa De Bonis to CEO of huge, succeeding Mat Baxter who has left the company and returned to his native Australia. Other remedial steps the firm has taken, added Krakowsky, include, “co-locating global headquarters in a common innovation hub, as well as comprehensively lowering and aligning their operating cost base in line with revenue.” 

Krakowski also cited strife in the Middle East that has been escalated by the Israel-Hamas war and which has taken a toll on both the company’s people and business performance in the region. 

“We continue to focus on a broad range of strategic and market-facing solutions over the near-term, including M&A to address the need for greater scale in digital transformation,” he said on the earnings call.  

Like other holding companies IPG has been investing millions in artificial intelligence over a number of years and that will continue in 2024 when the firm will invest about $80 million in AI-related technology, software and training, Krakowsky said.  

Other investments planned for 2024, said Krakowsky, include further development of addressable capabilities, such as the data-powered tools that inform and drive integration and decision-making across IPG and retail media.  

Also, he added, Mediabrands will be “building new buying models” that will add greater efficiency to the mix.  

There will also be additional streamlining designed to integrate the full capabilities of Acxiom across the company.  

This story has been updated with comments from an IPG earnings call with analysts and investors. 

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