UK operation drives Interpublic revenues upward

by Tristan O'Carroll, Media Week 30-Jul-08, 15:40

LONDON - Interpublic Group has singled out its UK operation as one of the principal drivers of a 21.4% surge in international revenues year on year in Q2.

The company, which operates media agencies Universal McCann and Initiative in the UK as well as creative shops Lowe and McCann Erickson, said total revenues stood at $1.84bn (£931m) in Q2, up 11.1% year on year. Of this total revenue figure, US revenues stood at $991m (£502m), with $844m (£427m) coming from international operations, up 21.4% year on year.

Interpublic said that the strong international growth was "driven by net client wins and increased spending throughout all regions, particularly in the Asia Pacific region and the United Kingdom".

Michael Roth, Interpublic Group chairman and chief executive cautioned that while the company's growth "demonstrates that we have yet to see retrenchment on the part of clients, we will continue to monitor the broader economic situation closely".

He added that the company will "stay very focused on monitoring costs, should action be required in order to protect margins".

Earlier this year, speculation had been mounting that Interpublic agencies Initiative and Universal McCann were set to merge, after Initiative lost around 25% of its billings in 2007, according to Nielsen Media Research.

Since then, Interpublic has decided to move Initiative and Universal McCann into the same London office and has appointed an inaugural joint chief financial officer, Colin McReavy, to work across both agencies.

Speaking in March, Graham Duff, president EMEA, Universal McCann and president of IPG Media Brands EMEA, denied that the agencies are to merge.

He said: "The heroes of our operation have to be the Universal McCann and Initiative brands, anything we do will have to be the best for them. I can categorically say that the two agencies will not be merging: this month, next year or at any other time."