Interpublic Group falls short of fourth-quarter estimates as ad spending slows
The company's revenue from the U.S. and the U.K. fell by more than 3%, while Europe saw a 3% drop. In Asia Pacific, the decline was steeper, reaching nearly 8%.
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Interpublic Group (IPG) reported disappointing fourth-quarter results on Wednesday, as major markets, including the U.S., saw significant reductions in advertising expenditures. The company's revenue from the U.S. and the U.K. fell by more than 3%, while Europe saw a 3% drop.
In Asia Pacific, the decline was steeper, reaching nearly 8%. During its third-quarter earnings call in October, IPG had already acknowledged the potential impact of ongoing economic and political uncertainty in both the U.S. and key international markets, describing it as a "significant consideration" moving forward.
In contrast, rival Omnicom Group posted stronger-than-anticipated fourth-quarter revenue. IPG's media research division, Magna Global, noted that global advertising spending is expected to grow at a slower pace in 2025, attributed in part to the absence of major cyclical events that typically drive growth.
The slowdown in advertising spending, often seen as an indicator of broader economic health, is leading to consolidation within the industry. Omnicom and Interpublic are on track to create the world's largest advertising agency, following a $13 billion all-stock deal that could attract significant regulatory scrutiny.
Interpublic, based in New York, serves a broad range of sectors from healthcare to retail and owns high-profile brands such as McCann, Weber Shandwick, Mediabrands, and MullenLowe.
