Up until a couple of years ago, Interpublic had taken a vehement stand against principal trading — buying time and reselling it to clients. The concern was that the practice would compromise or at least appear to be a conflict with its obligation to serve as agent to its clients.   

But in 2023 the company reevaluated, concluding that clients found value in the practice.

In fact, the firm’s late start in developing its principal buying operation cost it some key client pitches last year, CEO Philippe Krakowsky acknowledged on an investor call today after releasing its full-year 2024 results.  

Organic revenue at the company’s media management arm, Mediabrands, decreased slightly in the fourth quarter of last year and was up by 0.2% for the full year.  

The good news: the firm’s principal buying unit is in full swing in the U.S. The proposed acquisition of the company by Omnicom would also help in that area (among others), as the latter has an advanced global in-house trading unit. 

Asked on the call whether principal trading was the biggest consideration by CMOs in competitive media pitches, Krakowsky replied that it was not: “It is a part of the decision-making process, not the biggest.”  

He noted that Mediabrands gained momentum in Q4 with several wins, including AOR assignments from biotech firm Amgen and meal-kit delivery service HelloFresh.

Mediabrands agency Initiative won global media duties for Volvo, and the network also retained Unilever in Latin America and expanded its remit in Canada and the Middle East/Northern Africa region. Mediahub won AOR duties for Little Caesar’s.  

As noted in the company’s earnings report issued earlier today, IPG is executing a restructuring that will save the firm $250 million this year and more going forward on a full-year basis. This streamlining is in addition to the planned $750 million in synergy costs outlined when the acquisition plans were announced in December.  

The internal restructuring will include streamlining within IPG agencies, the centralization of corporate functions, additional offshoring and nearshoring and steps to improve the efficiency of platform services for production and analytics.

“These actions are necessary to ensure that a standalone IPG is in the strongest possible position despite our topline challenges,” Krakowsky said. He noted that some of the cost savings will be earmarked for talent and technology in areas such as AI, identity resolution, content management platforms and more.  

Krakowsky also addressed comments made by competitors about the opportunities they see as Omnicom and IPG are focused on integrating operations post-transaction. 

“Our teams appreciate that nobody in our industry has as comprehensive a solution as we will together with Omnicom,” he said. Clients, he added, “see the benefits and understand that our partnerships and the value we can deliver for them will be meaningfully enhanced.” 

“While we understand that our competitors are trying to disrupt what we are looking to build, it bears repeating that the integration will remain very focused and not get in the way of the services we deliver to clients every day.”