- IPG’s posted a net loss of $US45.6 million in the second quarter.
- Revenue fell 12.8% to $US1.85 billion.
- Organic revenue down 9.9%.
Global advertising group IPG (Interpublic Group) posted an almost 10% fall in organic revenue for the June quarter during the depths of the fallout from the pandemic.
Net revenue fell 12.8% to $US1.85 billion and in line with forecasts by market analysts.
CEO Michael Roth says there had been initial signs that the second quarter would prove to be the bottom of the economic decline.
However, there are still too many variables to make a call either way.
IPG, like the rest of the advertising industry, quickly cut costs to meet the economic downturn and the company is prepared to cut costs further if conditions deteriorate.
Roth says IPG will “align expenses closely” to changes in revenue.
“We're prepared to take further actions as warranted by economic conditions, but we also need to protect client relationships and be in a position to capitalise on opportunity when a recovery begins to take hold,” he says.
The company expects annual savings of $US80 million to $US90 million from cost cutting. The headcount at the end of June was down 4% to 52,000.
Roth says the company is ahead with its new business acquisition so far this year and he describes the pipeline of opportunities as “solid”.
However, he says it is difficult to gauge the pace of client decisions and the related conversion to revenue.
“The environment remains unclear for as long as COVID is a threat to everyday life,” he says.
“As a result, visibility to revenue remains challenging, and client decision-making difficult to forecast.
“Even the usual points of reference in marketing and media, such as back-to-school, the global sports calendar, media inventory and the holiday season, have not come into focus.”
IPG's Q2 2020 numbers:
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