Interpublic Group of Cos. emerged from McCann-Erickson Advertising as the brainchild of Marion Harper. In 1951, Mr. Harper advanced the idea that multiple agencies could thrive as separate entities under one corporate parent. He believed there were significant advantages to keeping an acquired agency as a separate division with its own name and clients.
Mr. Harper's first chance to implement that vision came in December 1954 when McCann purchased Marschalk & Pratt Co.; instead of simply being absorbed into McCann, Marschalk remained intact with its own staff and clients. Mr. Harper's rationale for the new-business strategy: Marschalk could take on smaller clients more easily than the larger parent company could, and the agency could service those clients in a more profitable manner. More controversially, he believed the two agencies could even handle some competitive accounts since they operated under different names.
The idea of an agency holding company took root with Marschalk and continued to grow under Mr. Harper's supervision. Interpublic Inc. was officially created in 1960 as the holding company for two wholly owned subsidiaries, McCann and Marschalk. In 1964, the corporation was formally renamed the Interpublic Group of Cos.
During the early 1960s, Interpublic rapidly expanded. Mr. Harper oversaw 38 acquisitions between mid-1959 and 1965 and supervised the opening of new offices in Africa, Australia and the Far East. In 1963, Interpublic signed a then-historic collaborative arrangement with the China Commercial Agency; the new Ling-McCann-Erickson agency operated out of Hong Kong.
But the business environment in general began weakening, and Interpublic was stuck with debt from its acquisition binge. In filings with the Securities & Exchange Commission, the company reported that "rapid expansion undertaken by Interpublic for several years prior to 1968 culminated in losses of about $250,000 in 1966 and about $3.9 million in 1967." Interpublic's bank debt, which the agency reported was $1 million in 1962, had jumped to $9 million by 1967.
Bank agreements, however, required Interpublic to maintain working capital of more than $10 million. By May 1967, the company was forced to inform its creditors, including Chase Manhattan Bank, that it could not meet those terms. These events culminated in the ouster of Mr. Harper on Nov. 9, 1967.
The board of directors named Robert Healy CEO; he was given the title of chairman in February 1968. Under his leadership, the company returned to profitability in 1968 with profits of $3.7 million.
Interpublic went public in March 1971 at $17.50 per share and joined the New York Stock Exchange that August. Paul Foley, who had headed McCann-Erickson since 1968, succeeded Mr. Healy as CEO of Interpublic in 1971 and then assumed the title of chairman in 1973.
In 1972, Interpublic acquired Campbell-Ewald Co., a $123 million agency with 11 U.S. offices. This was Interpublic's largest purchase to date, a record that stood until 1979, when it acquired Sullivan, Stauffer, Colwell & Bayles and its ownership position in the Lintas network.
Philip H. Geier Jr. was named Interpublic chairman-CEO on Jan. 1, 1980.
Mr. Geier oversaw the addition to the Interpublic network of Ammirati Puris Lintas, New York, in 1994; DraftDirect Worldwide, Chicago, in 1996; and Hill, Holliday, Connors, Cosmopulos, Boston, in 1998. Campbell-Ewald merged with Marschalk in 1980, then parted ways in 1985. In 1987, Campbell-Ewald was joined to Lintas, then split again 10 years later.
In 1999, Ammirati Puris Lintas was merged into the operations of another Interpublic acquisition, Lowe & Partners Worldwide, the main advertising unit of the Lowe Group. The merger created a global group with billings of more than $11 billion, putting it among the world's top five agency groups. In November 2000, Interpublic acquired Deutsch Inc.
In March 2001, Interpublic acquired True North Communications, the parent company of FCB Worldwide, Bozell Group and other agencies. In addition to True North, Interpublic's primary holdings in 2001 included two other wholly owned global advertising agency networks, McCann-Erickson Worldwide and the Lowe Group, as well as five global specialized-services networks: Initiative Media Worldwide; Draft Worldwide; NFO Worldwide; Octagon; Zentropy Partners, Interpublic's Internet-services company; and Allied Communications Group, managing Interpublic's holdings in a variety of specialized communications enterprises.
Among Allied's operations is Interpublic's public relations properties. In 2000, Interpublic realigned its PR operations into two worldwide brands: Weber Public Relations Worldwide was combined with Shandwick International into Weber Shandwick Worldwide, an agency specializing in technology, public affairs and lifestyle/entertainment; and Golin/Harris International added 14 Weber offices in the U.S., Europe, and Asia to its network.
On Jan. 1, 2000, John J. Dooner Jr. president-COO of Interpublic, succeeded Mr. Geier as CEO. With its acquisition of Chicago-based True North Communications in June 2001, Interpublic briefly surpassed the U.K.'s WPP Group as the world's largest advertising holding company. In 2001, the company had worldwide gross income of $7.98 billion, down 1.9% from 2000, on billings of $66.69 billion, up 0.4%.
However, in mid-2002, the company was hard hit when accounting regularities came to light. The disclosure caused its stock to plunge as the company initially was required to restate five years of earnings and take a $68.5 million pretax charge; by November, it became apparent that the irregularities were more extensive than originally thought.
In late February 2003, Interpublic shuffled its top management, firing James Heekin, who had been chairman-CEO of its McCann-Erickson World Group and replacing him with John Dooner Jr., who had been chairman-CEO of Interpublic. David Bell, who had been vice chairman of Interpublic, was named its new chairman-CEO. The troubled company again slipped behind WPP Group, which again became the world's largest advertising holding company.
In May 2003, several top executives of Interpublic announced at a shareholders meeting that they would give up more than 1.2 million lucrative stock options as the company's stock price continued to fall.
For 2003, Interpublic was the third largest marketing organization in the world with revenue of $5.86 billion, a 5.5% decrease from 2002, when it ranked No. 2. In the U.S., it had revenue of $3.5 billion, a decrease of 5.9% from 2002.