IPG’s forecast for business growth in 2024 contains the expectation that technology clients will be less of a drag on growth than last year.
However, a “sizable” loss in the telecommunication sector will be felt through most of the year.
The big global digital platforms have been cutting costs, shaving overheads built during the depths of the pandemic when consumers headed online.
IPG posted a better than expected rise in organic growth of 1.7% for the December quarter and has a positive outlook for 2024.
Growth was led by clients in the healthcare sector, followed by consumer goods, and food and beverage sectors.
Media, Data & Engagement Solutions organic growth was 1.1%, led by continuing “very strong” growth at IPG Mediabrands
The global advertising group expects overall organic net revenue growth for 2024 in a range of 1% to 2%, despite closing 2023 with full year organic growth down 0.1%
But IPG still faces economic uncertainty and challenges with clients in the technology sector.
CEO Philippe Krakowsky says tech and telco “austerity” cost IPG 2.2% of organic growth in 2023 and the digital specialists about 1.2%.
“It did feel to us as if during the fourth quarter, tech and telco was stabilising and I would say that that's still the case,” Krakowsky said when briefing analysts.
“With respect to new business, we had quite a number of large wins, some of which we began to feel the benefit of in the back half of last year and more so in Q4.
“Regrettably, we then had two sizable losses, different flavours, different reasons behind that.
“But we're going to basically be carrying the headwinds on both those losses all year this year.
“If we think about new business as we head into the year for the totality of '23, that's taken a lot of the wind out of our sales. So, we figure we're broadly speaking, flat.”
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