IPG and WPP return to growth

Both holding companies are optimistic about their outlooks for the rest of the year, with WPP revealing more details about its new data offering.
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Both IPG and WPP released their financial results for the first three months of 2021 on Wednesday, with both holding companies getting back to growth in revenue after reporting losses for most of last year.

IPG’s organic revenue grew by 1.9% year-over-year in Q1, despite the fact that organic revenue in the U.S., its largest market, was down by 0.2%. International markets more than made up for a flat U.S., with a 12.4% organic revenue increase in Continental Europe, 5% increase in Latin America, 3.4% increase in Asia Pacific and a 7.3% increase in “All Other Markets,” which includes Canada, Africa and the Middle East.

Organic revenue in IPG’s DXTRA unit – formed last year to contain specialist agencies like Weber Shandwick, Golin, Virgo Health, Octagon and FutureBrand – was down by 4.8%. In its integrated creative and media agencies, organic revenue was up 3.2%.

Philippe Krakowsky, CEO of IPG, said a key driver of growth during the quarter was the ability to combine creativity, technology and an “ethical approach to data management,” which has helped the company address higher-order business opportunities and respond to a period of “transformational change” over the last 12 months.

Though the pandemic still represents a degree of uncertainty, Krakowsky said that with a “reasonably steady” global economic recovery, he expects IPG to deliver somewhere between 5% to 6% organic growth for the full year.

WPP’s future includes new centralized data offering

WPP’s organic revenue grew by 3.1% in Q1, helped by a 1.6% increase in North America, its largest market. Organic revenue also grew by 4.7% in Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe; 3.7% in Western Europe; and 3.9% in the U.K.

“Our strengths in ecommerce, digital media and technology, combined with our ongoing investment in creative talent, are resonating with clients as their markets recover and they seek to transform their offer for future growth,” said Mark Read, CEO of WPP.

Looking at different segments, WPP’s global integrated agencies grew their revenue by 2.8%, with the holding company citing VMLY&R as leading the charge. Media segment GroupM also grew its revenue by 5.8%, with Wunderman Thompson returning to growth and “improvements” at Ogilvy and AKQA.

Revenue in PR grew by 2% year-over-year, while WPP’s specialist agencies had growth of 7.5% after reporting high losses throughout 2020, led by demand for brand consulting and healthcare services.

On Tuesday, prior to the financial release, WPP released more details about a previously reported centralized data offering, including the fact that it will be known as Choreograph. The new unit will combine the data capabilities currently within media division GroupM and creative network Wunderman Thompson into a single, centralized offering focused on a “privacy first approach” to first-party data strategies.

Housed within GroupM, Choreograph will have a particular focus on media, where effectively using first-party data is becoming a priority as third-party data and tracking begins to lose its applicability, but will work across disciplines, offering audience insights and planning, private identity solutions, AI-based media optimization, growth forecasts, strategy consulting and custom software development. Though it will work across WPP, Choreograph will have seven offices to start: Karlsruhe, Lille, London, New Delhi, New York, San Francisco, Shanghai and Sydney.

In addition to relevance in a cookieless world, the unveiling of Choreograph comes as similar data offerings at WPP’s competitors, such as Publicis’ Epsilon and Omnicom’s Omni, have been pointed to as consistent growth drivers and areas where further opportunity still lies.