| Type | Public (NYSE: IPG) S&P 500 Component |
|---|---|
| Industry | Advertising |
| Headquarters | W. R. Grace Building New York City, New York, USA |
| Key people | Michael I. Roth, Chairman & CEO |
| Revenue | $6.531 billion USD (2010) |
| Operating income | $548.7 million USD (2010) |
| Net income | $271.2 million USD (2010) |
| Employees | 41,000 (2009) |
| Website | http://www.interpublic.com/ |
The Interpublic Group of Companies, Inc. (IPG) (NYSE: IPG) is one of the "big four" global advertising holding companies (the others being Omnicom, WPP and Publicis). Headquartered in New York City, it has 41,000 employees and reported full−year revenues of US$6.5 billion for 2010. Its subsidiaries specialize in consumer advertising, interactive marketing, media planning and buying, public relations and other specialized disciplines like sports and event marketing. The company’s current chairman and CEO is Michael I. Roth.
As an advertising holding company, Interpublic sets company-wide financial objectives and corporate strategy, directs collaborative inter-agency programs, establishes fiscal management and operational controls, guides personnel policy, conducts investor relations and initiates, manages and approves mergers and acquisitions. In addition, it provides limited centralized functional services that offer its companies operational efficiencies, including accounting and finance, marketing information retrieval and analysis, legal services, real estate expertise, travel services, recruitment aid, employee benefits and executive compensation management.
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Interpublic Group’s lineage goes back to the 1870s. Foote Cone and Belding, now part of Draftfcb, is one of the United States’ earliest advertising agencies. Alfred W. Erickson and Harrison K. McCann set up shops under their names in 1902 and 1911, respectively. Lintas, founded in 1929 as the in-house advertising agency for Lever Brothers, is now part of Lowe and Partners Worldwide.
Interpublic Group was incorporated in Delaware in September 1930 under the name of McCann Erickson. The company has operated under the Interpublic name since January 1961 when it became the world’s first marketing services management holding company, with McCann-Erickson and McCann-Marschalk as its two subsidiaries. The company went public in 1971. It goes by ticker ‘IPG’ on the New York Stock Exchange.
In the mid-2000's, McCann-Erickson, the oldest and largest of Interpublic Group’s subsidiaries became embroiled in an accounting scandal. This scandal uncovered over US$600 million of inflated income from 1997 to 2004 [1]; moreover, it led to sanctions of US$12 million by the USA’s Securities and Exchange Commission (SEC) [2], shareholders’ lawsuit against the company [3], and a precipitous drop in the price per share of stock from $55.54 on December 1, 1999 to $9.65 on December 1, 2005 [4]. Following these events, a new management team was brought in by the Board of Directors in 2004-2005, and since that time, management has worked to turn the company around.[5]
The advertising industry was severely affected by the global economic downturn in 2009, and the sector saw a decline of 7.5% over the course of the year.[6] Interpublic revenue dropped from US$6.9 billion in 2008 to US$6 billion in 2009.
In 2010, the company began to demonstrate growth again, and revenues increased US$6.5 billion for of the year. In February 2011, the company initiated a quarterly stock dividend program - its first in nine years.[7]
Interpublic operates in more than 90 countries worldwide. It has three global brands that provide integrated, large-scale advertising and marketing solutions for clients – McCann Worldgroup, Draftfcb, and Lowe and Partners Worldwide – as well as a number of domestic integrated agencies and global media networks.
Interpublic has agencies that serve as marketing specialists across a range of channels. These include corporate branding (ex. FutureBrand), experiential marketing (ex. Jack Morton), sports marketing (ex. Octagon), public relations specialists (ex. Weber Shandwick and GolinHarris), healthcare communications (ex. McCann Erickson Healthcare) and digital agencies (ex. R/GA).
In 2008, Interpublic created a management entity called Mediabrands[8] to oversee its two global media networks, Initiative and Universal McCann (now known as UM), which provide specialized services in media planning and buying, market intelligence and return-on-marketing investment analysis for clients.
Some Interpublic companies include:
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In December 2011, the non-partisan organization Public Campaign criticized Interpublic Group for spending $1.3 million on lobbying and not paying any taxes during 2008-2010, instead getting $15 million in tax rebates, despite making a profit of $571 million and increasing executive pay by 32%.[9]