NEW YORK—Despite the high-profile financial problems at parent company Interpublic, as far as clients are concerned it’s business as usual at Weber Shandwick Worldwide and Golin/Harris International, according to their respective CEOs.
Interpublic announced last week that it was delaying a full earnings statement for the second time, as it investigates a series of accounting errors that could force it to restate earnings as far back as 1997. The company, which had previously said it would restate $68 of inter-agency sales booked over the last five years, now says the final restatement is likely to total $181.
The company also announced third quarter revenues that fell short of analyst estimates. Interpublic blamed “unanticipated charges at McCann-Erickson” for the underperformance.
Harris Diamond, chief executive of the company’s Weber Shandwick unit, which includes the former BSMG International, Shandwick International and Weber Worldwide operations, acknowledged that the media coverage had raised some concerns among employees, but insisted it had no impact on the firm’s clients.
“To my knowledge we have had only one client ask us a question about it,” he says. “We are not the only company in America that has seen its share price come down over the last few months. Our clients see what’s going on out there.” Overall, he says, the firm’s business has been flat for the past year, with gains in consumer and financial offsetting losses in technology.
As far as employees are concerned, Diamond says “they are always concerned when the parent company is in the news, but we have been able to explain to them what the issues are and what we are doing to address them.”
Golin/Harris CEO Rich Jernstedt, meanwhile, says, “Our clients are primarily concerned about the quality of the service provided by their Golin/Harris teams. That has not been impacted in any way.”
Advertising stocks rose slightly at the end of the week after reports that investor Warren Buffet had bought 500,000 shares in Omnicom, the world’s third largest communications conglomerate. Omnicom shares were up 11 percent overnight, with WPP and Interpublic shares up 6 percent. The investment was taken as an indication that Buffet believes advertising shares have bottomed out.