By Arun Sudhaman
NEW YORK: Interpublic Group’s CMG unit, which houses PR agencies Weber Shandwick and GolinHarris, grew its revenues by 10.2 per cent in 2010, outpacing the performance of its advertising and media operations.
CMG, which also includes other marketing services firms such as Jack Morton, FutureBrand and Octagon, earned $1.014 billion during the year, up from $915 million in 2009. By contrast, IPG’s IAN unit, which includes advertising agencies McCann Worldgroup, DraftFCB, Lowe and Mediabrands, grew by 6.5 percent.
CMG’s fourth quarter results were particularly strong, surging by 18.5 percent, year-on-year. Overall, IPG grew its organic revenues by seven percent in 2010, including an 11.2 percent hike in the 4Q.
The strong CMG performance comes after the unit declined by 13 percent, on an organic basis, in 2009 compared to 2008. CMG CEO Harris Diamond told the Holmes Report that the results demonstrate the PR industry’s progress in accessing marketing budgets over the past 12 months.
“The marketing services companies, given social media and engagement, these are places where we are seeing more marketing spend,” said Diamond. “What we’re seeing over the last year or two is more and more CMOs are putting us front and center. I won’t say we are leading a lot of initiatives but we are being asked to participate and we are getting the opportunity to lead some initiatives.”
Diamond said that North America was CMG’s strongest market in 2010, while Asia also showed “terrific growth”. Europe was “basically flat”, but Diamond said that this represented a positive outcome given industry forecasts at the beginning of the year. He also noted that consumer was the group’s strongest performing practice.
CMG’s agencies have made fewer acquisitions over recent years than many of its rivals; Diamond said he continues to look to build out the business in regions such as Asia and disciplines such as entertainment branding and sports marketing – but noted that “acquisitions are difficult.”
“Overall, to a large extent, I feel pretty good about our ability to build the businesses we need, rather than just acquire the businesses,” says Diamond. “The first test for us is, do you do better building it yourself rather than acquiring it?”