First quarter organic growth was 1.9% to US$2 billion, with “increases in every world region,” CEO Philippe Krakowsky said on the earnings call on Wednesday (April 28).
The US declined slightly organically by 0.2%, facing headwinds from strong performance in Q1 2020. Internationally, IPG grew organically by 6.3%, posting a 12.4% increase in continental Europe, a 3.5% increase in the UK and a 3.4% increase in APAC.
“The return to organic revenue growth is a sign that our clients have begun to pivot to an investment mindset as they look to build their brands and grow their businesses in line with a broader economic recovery,” Krakowsky said.
Data, media, technology and healthcare spurred growth for IPG in the quarter, driving 3.2% organic growth for its Integrated Agency Network segment. Krakowsky called out growth at data and tech units Kinesso and Matterkind and said performance at Acxiom was “in line with expectations.” He also pointed to global growth at Reprise commerce as clients adapt to new consumer shopping habits.
“With the deprecation of third-party cookies, all businesses are increasingly focused on realising value from their first-party data, or finding partners with whom to pool data assets,” Krakowsky said. “We remain well-positioned to benefit from that opportunity.”
IPG Dxtra, which houses the firm's PR, events and sports marketing business, declined 4.8% due to ongoing pandemic restrictions, but improved sequentially in the quarter.
Thanks to restructuring last year that resulted in a 7.6% headcount decrease, as well as “significantly lower expenses” for travel and solid new business performance, IPG is projecting 5% to 6% organic growth for 2021.
“Clients are finding their footing amid a global economy that is increasingly showing signs of recovery,” Krakowsky said. “As better days ahead begin to come into focus, conversations with clients have generally become more positive and constructive.”
Krakowsky also called out work IPG is doing in the environmental and corporate responsibility space, including setting new targets for reducing its emissions footprint.
He also nodded to IPG’s first Equity upfront, which aimed to direct spend toward minority-owned media companies, and its media responsibility framework, which helps clients invest in trusted and brand safe media partners.
“As a company responsible for creating some of the world’s most well-known marketing campaigns, we have an obligation to ensure that the work we do, as well as how we deliver it, supports the long-term well-being of our communities,” he said.
Krakowsky also alluded to a return to the office in September, “dependent on continued progress on matters related to resolving the public health crisis.”
“It will be a gradual and iterative process,” he added, “in which we test and learn as we go.”