Advertising network Interpublic delivered better than projected growth in the final quarter of 2017, with chairman and chief executive Michael Roth offering a cautiously optimistic outlook for 2018.
The Interpublic Group, which owns FCB, Frukt, Golin, McCann, MullenLoew, R/GA, Weber Shandwick and more, reported that profits were up 2.2% for the final quarter of 2017 to $1.29bn in the US. Overseas revenue was up 4.9% to $1.06bn.
Across all regions, it took in $7.88bn for the year, posting 1.8% organic revenue growth from $7.85bn in 2016. The US grew by 2.2% whereas international was up 1.2%. In 2017, the network comes away with just shy of $1bn ($973.6m) in profit, up more than $30m on the previous year.
Roth put the growth down to the “talent and dedication of our people around the world." For 2018, the group is targeting organic revenue growth of between 2 and 3%.
Roth added: “At this level of margin expansion, we will continue to invest behind our talent and in key areas such as digital, data, and analytics, which are vital to positioning us for success this year and for the long-term."
Taking questions after the call, Roth offered an optimistic outlook for 2018 after a 2017 where brands tightened their spend amid a lack of trust in digital spend and geopolitical turbulence: "Overall the tone that we are seeing from clients and marketers is more positive, I am still cautious but our quarter four and the fact we are to grow 2-3% for 2018 is consistent with our view that 2017 was not a secular change in our industry, it was cyclical and client specific, what we saw was a return to some spending. There is a better feel out there with elements of caution."
On an the occurrence of a Mediapalozza sequel, with an anomalous volume of big accounts up for review, Roth pitched in. "The media environment is where we see the most action, it is coming on three years since the Mediapalooza and a lot of those contracts are up for review which is cycling in. We start the year with a number of big reviews, we are not defending so they are big opportunities.
"I was very happy to see Initiative picking up two global clients in 2017 (Lego and Carlsberg), we are well positioned if there was another Mediapalooza, there are always conflicts, partly in the auto side, sometimes some of the healthcare, but we see a really clear opportunity in the existing pitches that are out there."
On the back of the performance, the board of directors has enabled a buy-back scheme of some $300m of the company’s common stock.