Interpublic Group of Cos.' organic revenues were down 3.6% in 2003 (after revenue from asset sales and currency fluctuations are stripped out). Net losses were $451.7 million in 2003. And the honeymoon period for Interpublic's management is clearly over.
"Going forward they won't get a free pass," said Troy Mastin, an analyst with William Blair & Co., Chicago, who also adds that he's been impressed that Interpublic is at least detailing future projections.
"We've done a lot of good things," said Mr. Bell. "We have a lot of heavy lifting to do, we're nine months into a 24-month turnaround." Mr. Bell said "a lot will ride on a new positive culture. We're seeing signs of a new culture emerging."
That new culture is one of collaboration. Interpublic has around 300 employees involved in ways of cooperating on shared clients, via means such as an intranet site to share information and contacts on potential new business. Last May, Mr. Bell also brought in Kevin Allen as senior VP-chief collaboration/growth officer, charged with the unenviable task of breaking down (or at least circumnavigating) the fierce fiefdoms of Interpublic.
Mr. Allen, previously exec VP-director of corporate development at McCann Worldgroup, has put together a team that includes Scott Harding, CEO at Newspaper Services of America; Bob Greenberg, CEO at R/GA; Michael Dudda, senior VP-director of business development at Deutsch; and Maureen Shillet, senior VP-worldwide new business at Foote Cone & Belding, among many others. "My role is to cajole, support and encourage," Mr. Allen said. "Our belief is that it [new business] is not about ambulance chasing, but about building a brand and a systemic program."
The most fruitful projects see staff gain a financial reward, via Interpublic's organic growth initiative to be rolled out in Asia next month. Mr. Allen is also creating teams around certain industry expertise such as the Olympics.
"What Kevin has done is help us be aware and understand each other," said Ms. Shillet. "There's give and take." Mr. Allen claims that his "growth gang" has helped Interpublic realize $40 million in annualized new business revenues since he joined in May of 2003. His next meeting with participants is April 21 and will be attended by around 125 people, compared with the 65 who registered for the first meeting in October 2003.
drop in the bucket
Given that 25% of Interpublic revenue in 2003 came from clients that had been with the holding company more than 20 years, according to Merrill Lynch research, the internal growth initiatives make sense. While $40 million is an encouraging figure, when viewed against Interpublic's $5.86 billion revenues in 2003, it's a mere drop in the bucket.
As for account reviews, they're a fact of life, but some are more life-threatening than others for Interpublic. Lowe & Partners, London; Initiative Media and MRM are joining forces to help keep worldwide bank HSBC in the global stable. Separately, sibling FCB will defend its Samsung account for the second time in a year. The Korean electronics firm has sent requests for information to holding companies. Mr. Bell said, "Most of the reviews present an opportunity. We clearly view them as an opportunity to demonstrate best practices," he said, while admitting, "obviously there's risk."
In addition to HSBC and Samsung, Nestle and S.C. Johnson & Son are also conducting global reviews.
Net new-business figures were not given during the 2003 conference call as Chief Operating Officer and Chief Financial Officer Chris Coughlin said he wasn't comfortable with the metrics. That disappointed Merrill Lynch analyst Lauren Rich Fine who said that Mr. Bell had previously provided annualized revenues from net new business while at True North.
Whatever the financial results of the growth initiatives, it is hoped that greater cooperation may help bring some luster back to Interpublic's own brand. "We want to be seen as the holding company that best gets the new realities in marketing," said Mr. Bell.