Interpublic Group of Cos. nearly doubled its net income in 2010, up 96% to $281.2 million, compared to the prior year, which because of the economic downturn was a challenging one for the ad industry. Interpublic said annual revenue for the year was up 8.4% to about $6.5 billion.
"Coming off a brutal recession we entered 2010 uncertain as to the strength of a recovery and therefore focused on managing our costs," the holding company's CEO, Michael Roth, said this morning on an earnings call with analysts. "As the year unfolded the economy stabilized and began to improve. And we were able to capitalize on these changes in the macro environment to achieve strong growth in revenue and profits, which was apparent in [the fourth quarter] and for the full year."
Interpublic's net income in the fourth quarter was up 39.5% to $222.8 million. Revenue for the fourth quarter was up 11.7% to $2 billion.
Regionally, Mr. Roth said U.S. organic revenue growth in the quarter was up 13.1%, and Interpublic saw double-digit growth in the U.K. as well as in key emerging markets such as India, China and Brazil. In Asia-Pacific, organic growth was 7.5%, led by China and India, but results were tempered by slower growth in Japan. Organic growth in Latin America was 20.1%, led by Brazil.
Mr. Roth said 2010 was significant for Interpublic because it bounced back from the economic downturn. "We put our company back on the track of competitive organic revenue growth and margin expansion that we had established before the recession hit the marketing services sector in 2009."
Mr. Roth noted accounts in auto, financial services, packaged goods, health and personal care, food and beverage and tech and telecom were among the advertising sectors that performed strongly.
Mr. Roth called out the company's Constituency Management Group, which houses public-relations agencies Golin Harris and Weber Shandwick and experiential agencies Jack Morton and Octagon, as a strong performer within the company. That unit reported 18.5% organic revenue growth in the fourth quarter and 10.2% growth in 2010 over the prior year.
He also also called particular attention to digital agencies such as R/GA, Huge and McCann Erickson's MRM; and U.S. agencies outside of the Worldgroup silo including Mullen, Martin, Hill Holliday and Gotham; as well as the company's media business, Media Brands. He attributed the growth to the improved economic climate as well as renewed confidence from marketers compared to a year ago.
Interpublic in the fourth quarter saw only one major account win: DraftFCB's global assignment for personal-care company Beiersdorf, which markets Nivea and Eucerin. DraftFCB also retained Kraft's Gevalia brand in that time, though the agency earlier in the year had lost a number of Kraft's brands, including Macaroni & Cheese, Jello, Cool Whip, A1 Steaksauce and Bull's Eye barbecue sauce. DraftFCB continues to work on Kraft's Oreo, as well as Club Social crackers and Kraft cheese.
Looking ahead, Mr. Roth said Interpublic expects solid revenue growth in 2011, estimating a 4% to 5% increase.