Interpublic continues to struggle along a rocky road to recovery

Interpublic is continuing to struggle along a rocky road to recovery as it reported a loss last week of $71.5 million for the quarter to 31 March, almost unchanged from the result reported for the same period last year despite incurring much reduced severance costs in the latest period. That reduction alone saved $31million.

Interpublic also benefited from favourable currency movements without which its revenues would have fallen by 3%. Instead revenues grew by a modest 1.2% although that was a better performance than was achieved by WPP Group in the same period.

Revenues at WPP fell by 1.8%, but the group tried to put a better gloss on the decline by telling the world the revenues would have risen by 6.6% if its operations were headquartered in the US and reported in US dollars. But that of course is a red herring as shareholders cannot benefit from hypothetical revenues and profits. Maybe Sir Martin Sorrell is not content with shifting his corporate roots to Ireland to save tax and will now be exploring how he could move the company to the US to enable him to report bigger profits – assuming currency movements continue to favour US businesses.

To WPP’s credit it is now indisputably the biggest revenue earner in the sector – leading Omnicom Group by about 10%.

Meanwhile both Havas and Publicis Groupe are keeping very quiet about what their revenues would have been without the benefit or otherwise of currency movements.

© Fintellect Ltd

  • Chris Arnold

    Read the Organikal blog for an
    interesting opinion on the campaign and the world of Organics. ‘Hammy the hamster
    goes organic’ is cute.

  • Carlo Buckley

    Interesting article Chris and I agree with much of what you say. I gave up my good job as a corporate lawyer to start Mr Organic which we launched in April 2009…we make sauces amongst other things. So far I’m pretty happy with my decision as this year compared to last sales are 65% up..significantly outperforming the market. Undoubtedly our growth could have been quicker but if you have a great product, eye catching labels, strong provenance, are good value for money etc. etc. then you can get results despite the economic crisis and will be successful in the long term. Feel free to visit our website for more info. You have to give consumers more reasons to buy your products – just being organic is not enough! In my opinion, there are too many faceless organic brands owned by huge multinational food companies (in that I include the supermarket own label products) that churn out both organic and non-organic products on the supermarket shelves. They are expensive and not as good a quality as they should be given the price and volumes they must sell. These brands have nothing behind the label on the front of the packaging or are so far removed from the original founding brand principles that they may have been able to pull the wool over consumer’s eyes and sells lots during the good times but no longer. Unfortunately when it comes to the supermarkets they all but Waitrose it seems think from their actions that “organic has had its day”…nonsense. It’s time for a new breed of organic food company and the supermarkets would be better off employing “buyers” that actually buy rather than make excuses for not doing their job. Of course, I don’t put all buyers in those shoes and for many it may not be their fault but when it comes to organic and getting the best products on the shelf that will sell they need to have a re-think on both private label products and the incumbent dinosaurs that currently occupy the aisles.

  • Huw Bowles

    Dear Chris,
    Your Brand Republic piece on Organic sales decline, 31st August made interesting reading and whilst we appreciate your comments on Why I Love Organic campaign, we would like to reassure you it was thoroughly researched and is supported and endorsed by a number of the brands you refer to in your piece. We are just reaching the end of year one of our three year campaign and are aware of certain areas, social media for example, that need to gather momentum and work harder for us. However, as we go into year two, we are pleased with the campaign results so far.  We are starting to talk about organic in a new way – it’s not preaching & it’s not worthy – something organic has been accused of in the past.
    It’s important to remember that our organic market does not enjoy the generous financial support from Government that our European neighbours do.  
    Huw Bowles
    Chair, Organic Trade Board