For the first time in nearly two decades, IPG has updated its reporting segments to better highlight its “integrated, multi-agency services,” CEO Philippe Krakowsky told investors on the earnings call.
Previously reporting two segments — IAN and Dxtra — IPG has split into three new segments: media, data and engagement solutions (MD&E); integrated advertising and creativity led solutions (IA&C); and specialised communications and experiential solutions (SC&E).
MD&E includes IPG Mediabrands, Acxiom, Kinesso, MRM, R/GA and Huge; IA&C is comprised of McCann, IPG Health, MullenLowe Group, FCB and the domestic integrated agencies; and SC&E includes IPG Dxtra, Dxtra Health, Weber Shandwick, Golin, Jack Morton, Momentum and Octagon.
The new segments reflect “significant changes in our business, the needs of our clients, and the workings of consumer and media ecosystems” that were “significantly accelerated as a result of the pandemic,” Krakowsky said.
“Our operations will always reflect the strategic reality that marketers should have access to the best capabilities and talent, no matter where they sit across IPG,” he added.
IPG reported net revenue of $2.23 billion in the first quarter of 2022, an increase of 9.8% year over year. Organic net revenue growth was 11.5%.
The holding company’s growth rate increased in every region. In the U.S., which accounted for 66% of net revenue in the quarter, organic net revenue increased 12.2%. International markets, making up 34% of revenue in the quarter, grew 10.2% organically, with the U.K. growing 1.5% and APAC growing 9.2%.
In Q1, organic growth was 11.5% at MD&E, 11.2% at IA&C, and 12.5% at SC&E.
CEO Krakowsky told investors on an earnings call on Thursday morning (April 28) that growth was led by clients in leisure, government and industrial sectors. The holding company also saw double-digit growth among clients in retail, tech and telecom, financial services, health and auto and transportation.
He added that, across the board, clients have not slowed down their investments in advertising despite an uncertain geopolitical climate. IPG has suspended its operations in Russia but said there was no drop-off in the quarter in Eastern European markets.
The strong results put IPG in line with Omnicom, WPP and Publicis, which all posted double-digit growth in the first quarter as business rebounded from the pandemic.
As a result of the strong quarter, IPG has raised its full-year forecast slightly, from 5% to 6% organic growth.
One investor called out in the call that for the first time ever, IPG’s revenue growth was higher than Facebook’s in the quarter.
Krakowsky said that in its new reporting structure, segments with “embedded tech and data” represent the most “opportunity from a margin perspective,” and that integration of these services into its other segments will fuel growth across the board.
Acxiom in particular has been “increasingly powering behavioral science and the way ad agencies go to clients with insights that inform creative work,” Krakowsky said.
But as scrutiny builds for consumer privacy on the web, and as Apple and Google’s crackdown on tracking impacts advertisers, IPG is increasingly leaning into a privacy-first narrative. In the absence of federal privacy law in the U.S., Acxiom has begun treating all citizens under the protections of the California Consumer Privacy Act (CCPA), the strongest State privacy law in the country.
The privacy-focused comments come weeks after John Oliver aired a segment on Last Week Tonight eviscerating data brokers, particularly Epsilon, which is owned by Publicis Groupe