Interpublic Group of Cos.' organic revenue grew 7% in 2022, in line with its October forecast, and the agency holding company anticipates 2% to 4% growth this year.

CEO Philippe Krakowsky spoke on IPG's conference call about preparing for the uncertain macroeconomic outlook in the coming year. IPG's shares were down 3% in afternoon trading.

IPG's organic revenue rose 3.8% in the fourth quarter, a slowdown from the 11.7% growth in the same period a year earlier. Organic growth is a key financial indicator that factors out acquisitions, divestitures and the effects of exchange rates. Before billable expenses, revenue rose 3.7% to $9.45 billion in 2022, and was essentially flat at $2.55 billion in the fourth quarter, IPG reported.

IPG's 2023 forecast is on par with those of rival holding companies Omnicom Group and Publicis Groupe, which forecasted mid-single-digit organic revenue growth in their recent earnings reports. However, both of those companies reported slightly higher organic revenue growth for 2022—9.4% at Omnicom and 10.1% at Publicis. WPP will announce its results on Feb. 23 and Stagwell will release its results on March 2. 

Marketer caution

“Marketers are approaching 2023 with conviction in the need to stay invested and be in the marketplace, as well as a degree of caution,” Krakowsky said on the call.  When asked to offer insight into that marketer caution, Krakowsky said it is “less a function of the specifics of what’s going on right now,” and more about an “open-endedness and concern about a potential downturn” later in 2023. 

“We’re confident that the strongest growth areas of our business, such as consultative media services, healthcare marketing, experiential marketing and commerce, all supported by our best-in-class data capabilities and creative assets, will continue to perform despite the current economic headwinds,” Krakowsky added.

Leading segments

In the U.S., fourth-quarter organic revenue grew 2.4% compared to 12.1% growth in the same period a year ago. Organic revenue in international markets rose 6.1% after 11% growth a year earlier.

Growth in the fourth quarter was led by IPG’s auto and transportation sector, followed by retail and industrial and government work. 

The company’s Media, Data and Engagement Solutions segment saw 5% organic growth in the quarter, led by double-digit growth at IPG Mediabrands, which includes Magna, UM and Initiative. Driven by high-single-digit growth in IPG’s healthcare offering, the holding company's Integrated Advertising and Creativity-Led Solutions segment grew by 2.6%.  

IPG’s Specialized Communications and Experiential Solutions segment, which houses the bulk of its PR firms, posted 3.5% organic revenue growth in the quarter, to $356.3 million. The segment’s organic revenue rose 8.5% to $1.4 billion for the full year 2022.

Meanwhile, technology and telecommunications, IPG’s second-largest client sector, started showing the impact of “sector-specific issues,” said Krakowsky, who said that would continue to create headwinds for the company's 2023 first half. 

The company also continues to feel the loss of the Coca-Cola account moving to WPP in late 2021; the impact is expected to be felt until the end of the first quarter. IPG confirmed McCann and Mercado are still on Coke’s roster.