“Organic growth in India exception,” says IPG as APAC revenue drops 8% in March quarter

Delhi: Interpublic Group’s India business performed exceptionally well in the quarter ending March 31, 2024, even as its Asia-Pacific business, which was 7% of net revenue in the quarter, decreased 8.1% organically. 

“Most national markets decreased from a year ago due to reductions in spend from existing clients in the region. Organic growth in India was the exception,” the holding company said in an earning call on Wednesday.

Addressing the company’s poor performance in the APAC markets, IPG CEO Philippe Krakowsky said, “It was a lot of smaller cuts with a broad range of clients across the region. And the exception being India, where we have significant scale and a lot of very strong agency brands and capabilities.”

In the March quarter of 2024, IPG reported total revenue of $2.50 billion, which includes billable expenses. It was $2.52 billion in the March quarter of 2023.

Revenue before billable expenses ("net revenue") was $2.18 billion, an increase of 0.3% from the first quarter of 2023.

The organic increase of net revenue was 1.3% from the first quarter of 2023.

The advertising giant reported an operating income of $184.2 million in the quarter ending March 31, 2024, compared to $188.3 million in 2023. 

Krakowsky termed the results a solid start to the year. 

“The results are consistent with our 2024 targets. Our data and tech-driven media offerings, healthcare marketing, and PR capabilities continued to perform strongly, driving our growth. Marketer sentiment has begun to improve relative to the back half of last year, and the new business pipeline is more active” he said.

“We continue to enhance our offerings, further embedding precision and performance into our integrated, full-funnel media solutions, including our suite of Unified Retail Media services, which deliver cross-platform planning and optimization for a range of clients. We are also progressing in the integration of technologies such as Generative AI into the core of our marketing services capabilities, notably through our recently-announced partnership with Adobe, which speeds content ideation, creation, production and activation. By deploying proprietary best-in-class Acxiom data and identity products into our enterprise-wide marketing engine, we can create a more accurate picture of consumers and deeper connections with brands, all in the service of helping marketers drive growth and achieve business outcomes,” Krakowsky added.

Segment-wise growth:

IPG’s Media, Data & Engagement Solutions, which include IPG Mediabrands, Acxiom and our digital and commerce specialist agencies, which include MRM, R/GA, and Huge, witnessed a 0.5% drop in revenues.

The media segment recorded a revenue of $961.3 million in the quarter ending March 31, 2024, down 0.5% from $965.9 million a year ago.

On the other hand, Integrated Advertising & Creativity Led Solutions recorded an organic growth of 3.1% in the March quarter.

The segment includes McCann Worldgroup, IPG Health, MullenLowe Group, Foote, Cone & Belding ("FCB"), and other domestic integrated agencies.

In the quarter ending March 31, 2024, IPG’s creative segment recorded a revenue of $881.4 million. It was $870.5 million a year ago.

The Specialized Communications & Experiential Solutions segment of IPG also recorded an organic growth of 1.5% in the March quarter.

The segment’s revenue was recorded at $340.2 million in the quarter ending March 31, 2024. It was $340.5 million in the corresponding quarter of the previous year.