Interpublic Group of Cos. posted third-quarter net organic revenue growth of 15% compared to last year’s third quarter, which was negative due to the impact of the pandemic. Net revenue in the quarter was up 15.7% year-over-year to $2.26 billion.

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During IPG's earnings call this morning, CEO Philippe Krakowsky said he expects full-year 2021 organic growth of “approximately 11%,” which is ahead of the 9%-10% range the holding company had previously indicated last quarter. This would indicate IPG’s fourth quarter organic growth is estimated to come in around 8.4%.

Organic growth is a key financial measure that factors out acquisitions, divestitures and effects of exchange rates.

According to Krakowsky, the outlook is based on “expectations of a reasonably steady course of public health and global economic recovery.” The numbers for the full year also could be affected by project work heading into the fourth quarter, which Krakowsky says the company doesn’t have “full visibility” on, including work for this upcoming holiday season.

Getting further into the numbers 

The U.S., which accounted for about 65% of IPG’s net revenue in the third quarter, delivered organic growth of 14.7%. International markets totaled 35% of IPG’s net revenue and saw 15.4% organic growth. Specifically, organic growth in the U.K. was 13.3% over last year; 11.8% in Continental Europe; 17.4% in the Asia Pacific region; and 20.3% in Latin America.

The IPG Dxtra segment—formed last year as an umbrella group of agencies including Weber Shandwick, Golin, FutureBrand, Octagon and Jack Morton—posted organic growth of 18.6%, “reflecting double-digit increases” across each of the agencies, Krakowsky said.

IPG's Integrated Agency Networks segment generated 14.4% organic growth, with Ellen Johnson, IPG’s chief financial officer, citing the strong performance of offerings in media, data and tech as well as agency holdings like R/GA, Huge, McCann Worldgroup, FCB and the MullenLowe Group.

While travel costs still remained low for IPG, they were slightly higher compared to last year, Krakowsky said.

“While we fully plan to continue using technology and practices developed during the pandemic to reduce travel and other carbon-intensive parts of our business where and as appropriate, we believe that some of what one could call the standard costs of doing business will return in Q4 and in larger measure in 2022,” he added.

Focus on talent

During the earnings call, Krakowsky and Johnson emphasized that hiring hasn’t kept up with IPG’s growth and they will continue to explore different avenues of acquiring talent.

“What we're focused on is really innovating our recruitment techniques,” Johnson said. “We're doing all kinds of different things on that front, including talent referral bonuses, looking at different places for our workforce, including bringing working moms back into the workforce. We're also trying to create opportunities for our people by creating promotion opportunities. It's not all about the compensation, although we do pay people competitively, it's also really about the quality of the work environment that you provide.”

For the third quarter, worldwide headcount was approximately 54,600, an 8% increase from a year ago, and an increase from the second quarter, which ended with a headcount around 53,000.

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Other holding companies

IPG was the third holding company to announce its third-quarter results.

Earlier this week, Omnicom Group posted third-quarter organic revenue growth of 11.5%,  which would suggest fourth-quarter organic growth in the range of 5% to 6%.

Publicis Groupe last week raised its forecast for the full year after posting strong results with third-quarter organic growth of 11.2%. Publicis shares last week scored a multi-year high, with shares trading far above their pre-pandemic level. 

Looking ahead, WPP will give its third-quarter update on Oct. 28 and Dentsu Group will announce third-quarter earnings on Nov. 12.

IPG announced its results this morning before the market opened. IPG shares early this afternoon were trading at $36.62, down 3.7%.