Early in 2001, Interpublic took a $160 million charge for impaired investments in primarily publicly traded Internet-related companies, including MarchFirst, which declared bankruptcy in April 2001. Interpublic also took a charge of about $15 million in the third quarter as a result of its minority stake in Modem Media, Norwalk, Conn.
An overall downturn in ad spending put more pressure on some interactive shops that grew out of ad agencies-for example, Interpublic's Lowe Lintas & Partners last autumn merged its Lowe Live operation into DraftWorldwide.
But some interactive units and standalone agencies held steady through the year. Deutsch's iDeutsch, whose interactive revenue climbed 21.4% to $28.4 million, added marketers including Revlon's Almay and Cadbury Schweppes' Snapple. R/GA's revenue edged up 2% to $51 million. It picked up several new agency-of-record accounts, including Nike and Bank One.
"Business in 2001 was even more difficult than it was in 2000, as the trends of consolidations and company closings continued, and interactive shops struggled to find a financial model that worked," says Robert Greenberg, founder, chairman and chief creative officer of New York-based R/GA.
"We didn't have those problems. We focused on gaining market share in a shrinking market," he adds.