WPP and IPG report first-quarter results, shares fall

WPP and Interpublic Group of Cos. maintained their full-year outlook today as they each reported first-quarter results. Shares of both agency holding companies were down in afternoon trading. WPP CEO Mark Read said acquisitions and other efforts are helping it in today's market. “Our focus on AI over the last five years is paying off, with many examples of our work with clients, using the main AI platforms, in-market today,” Read said in a statement, calling the company “a modern, trusted partner to clients in a world further disrupted by technology.” More on AI: The top 5 AI marketing activations to know about now Ad Age Agency Report 2023 Revenue, listings and analysis for agencies and agency companies Read more here WPP, the world's largest agency holding company, reported 2.9% organic revenue growth for the quarter. WPP stood by its forecast calling for 3% to 5% growth this year. Its shares were down 3% in afternoon trading. IPG, the fifth-largest agency company according to Ad Age Datacenter, saw first-quarter net revenue fall 2.3%. It still expects organic revenue to grow 2% to 4% this year. IPG's shares were down 6.5%. Subscribe to Ad Age Sign up now for the latest industry news and analysis Click here Digital agencies weigh on IPG, work ongoing At IPG, strong performance in the media, healthcare, and data-informed practices were offset by multiple factors such as the macro environment, softness in its specialist digital agencies, such as R/GA and Huge, and softness in the technology and telecommunications sectors, CEO Philippe Krakowsky said on a conference call. Specifically Huge and R/GA’s impact on organic revenue was a “hair under 3%” Krakowsky told analysts during the call. “As we’ve called out in our recent conversations with you, the performance of our digital specialist agencies continued to weigh on growth in the first quarter. The transformation underway at those businesses does continue to progress, and we will begin to cycle their revenue decreases in our third quarter.” Krakowsky said he expects both Huge and R/GA to be “growth drivers” for the holding company at some point. “Huge is further along in terms of what the next value proposition is going to be for them,” Krakowsky said. “Essentially it's going to market with more of a consultative model where it's less people and hours and more of a product and solutions approach.” Recent news: Huge lays off 6% of staff Krakowsky said the first-quarter results were in line with what the company had forecast coming into the year, but revenue “is not in keeping with our long-term track record or the growth we are collectively striving to achieve.” IPG should begin to see the benefits of its key new business wins, most notably Geico’s media account going to Mediabrands, in the second half of the year, he said. The holding company also continues to make investments in emerging technology such as Web3 and AI. Last week, Publicis Groupe posted a 7.1% increase in first-quarter organic revenue, while Omnicom Group reported a 5.2% increase and took a $119.2 million charge for real estate repositioning costs. Shares of those two companies were down less than 2% this afternoon.

WPP and IPG report first-quarter results, shares fall

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