Digital Agencies Still A Drag On IPG Growth

During a call with analysts yesterday following the release of its first quarter results, IPG CEO Philippe Krakowsky noted that its two digital agencies Huge and R/GA are still posing a significant drag on the company’s growth—about 1.5 percentage points in Q1. 

That’s after a year or more of strenuous efforts to turn the fortunes of both shops around with new management and revamped go-market approaches.  

Another big drag on the company’s growth throughout last year was its roster of technology and telecom clients which collectively cut spending drastically at IPG and other holding companies too.  



The good news there is that now that sector is less of a drag on IPG’s growth—around 1.5% versus the previous 2 to 2.5%. Krakowsky told analysts that it was still hard to tell when the sector would actually start growing again.  

And the company’s organic growth outlook for the year—between 1% and 2%--does not factor in any growth from the “turnaround” agencies or tech sector growth. So if some growth does materialize in either sector, it would be icing on the cake.  


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