Interpublic Group at JPMorgan Conference: Strategic Merger Insights

On Tuesday, 13 May 2025, Interpublic Group (NYSE:IPG) discussed its strategic initiatives at the 53rd Annual JPMorgan Global Technology, Media and Communications Conference. The company highlighted its anticipated merger with Omnicom, emphasizing potential technological and data synergies, while acknowledging challenges such as client conflicts and talent retention. Despite some business losses, IPG remains optimistic about its growth prospects.

Key Takeaways

• Interpublic Group (IPG) is merging with Omnicom, expecting significant value from technology and data integration.
• CEO Philippe Krakowski is confident in cultural compatibility and regulatory approval by the year’s end.
• IPG’s organic growth guidance is slightly negative, but underlying growth is positive when excluding recent losses.
• The company is focusing on media buying and data-driven strategies to enhance client offerings.
• IPG is executing a business transformation program aimed at centralization and efficiency.

Financial Performance and Organic Growth

• Organic Growth Guidance: IPG maintains its guidance at minus 1% to minus 2%, considering account losses.
• Underlying Growth: Excluding new business losses, growth stands at plus 1% to plus 1.5%.
• Key Growth Drivers: Emphasis on media, data integration, principal media buying, and commerce capabilities.
• Acxiom’s Role: Acxiom is significantly contributing to data activation across IPG’s agencies.

Operational Updates

• Contingency Planning: IPG is engaging with clients for scenario planning amidst economic uncertainty.
• New Business Pace: Although RFP engagement may decrease, average industry pitch activity remains stable.
• Acxiom Integration: Enhanced use of Acxiom’s Gen AI powered consoles for planning and content generation.
• Healthcare Vertical: While impacted by an account loss, this sector holds long-term growth potential.

Future Outlook

• Merger Conviction: CEO Krakowski expresses strong belief in the merger’s benefits, focusing on efficiency and synergy.
• Regulatory Process: The merger is on track for completion in the latter half of the year.
• Creative Business Evolution: Integration of creativity with technology and data is a priority for improved content performance.

Business Transformation Program

• Savings and Reinvestment: The program aims to generate savings while reinvesting in technology.
• Centralization: Focus on centralizing corporate, finance, and HR functions for efficiency.
• Production and Analytics: Establishing production as a center of excellence and reducing regional duplication.

Readers are encouraged to refer to the full transcript for a detailed account of the conference call.

Full transcript - 53rd Annual JPMorgan Global Technology, Media and Communications Conference:

Operator: Okay. Let me know when you’re ready. Okay. So we’ll get started. We are very happy to have back at the conference of Interpublic Group, Philippe Krakowski, CEO.

Thanks so much for being here.

Philippe Krakowski, CEO, Interpublic Group: Hey. Thank you. It’s a pleasure to be here.

Operator: Sure. So I thought we’d start with the merger with Omnicom, which you will be joining as co president and COO and which you’ll represent as a board member. You’ve had around six months to further plan for the upcoming deal. How has your level of conviction conviction shifted around this? And what are you most focused on going into the transaction close?

Philippe Krakowski, CEO, Interpublic Group: Well, look, I mean, as you will have heard, and, you know, I think it’s sort of a matter of common knowledge, John and I spent a lot of time talking about and thinking about this prior to agreeing to the acquisition. And so I think that that level of thought had gone into it so that your question around level of conviction, there was a great deal, there continues to be a great deal. And when you think about all of the things that we can unlock in the way of capabilities about kind of what’s happening in our industry, as in many industries, where the rate of change is accelerating the importance of technology and data. Also, there’s a really significant kind of value unlock there. So there’s a there’s a very high level of conviction and excitement about being able to close this and get to the other side of it.

And then in terms of where the focus is, you know, you’ve heard on the Omnicom side about where and how the efficiency part of the story will play out, and there’s been a lot of specificity around the cost synergies and how it is that putting these two large public entities together is gonna clearly be a value driver. I think that in conversations with clients, there’s a lot of interest in so many of the ways in which what we can jointly bring to them is very powerful. So, I mean, to my mind, that’s the place where, you know, kind of I would lean in and be most excited about kind of what can be done, you know, once once we’re through the regulatory period.

Operator: Okay. Philippe, holding companies are, to state plainly, people have the organizations, they house agencies with fairly unique cultures. I guess what’s your level of confidence that your various advertising and marketing services groups will integrate well into the Omnicom parent structure.

Philippe Krakowski, CEO, Interpublic Group: Well, I mean, back to a lot of time went into thinking this through, and obviously in this interim period, the pendency, get feedback and input from not only the client side, but your own organizations. I think that there’s a lot of consonance that the two cultures are, you know, we know each other quite well from having competed against one another for a very long time. We do have some flow of talent. Often, you know, it’s been likelier that it’s back and forth from Omnicom to us or vice versa. And I think that there is a kind of, you know, back to your word earlier conviction, there’s an understanding or a commitment to the fact that what we are, you know, we’re a professional service business that’s increasingly informed by and run off of this data and tech platform piece, but that the the the the talent that sits inside of our, you know, as you put it, our our operating units, our agency brands is a really important part of how you bring clients into the fold, how you activate those capabilities.

And so, you know, we’ve been spending time with those folks. The sense we’ve got is that all the client facing components of our respective companies are eager because they’ll have this more comprehensive, more modern set of tools to to bring to bear. So we have again, we feel we feel really good about kinda how the cultures will fit and the fact that, you know, how we work kinda the values we have and the trajectory strategically has been has been pretty pretty aligned.

Operator: Got it. At the deal announcement, there was certainly a lot of investor focus on client conflict, and maybe you just sort of answered it, the risk of talent leaving. But six months later, this looks kind of overblown. Would you concur with that? Do you think you’re kind of in the clear on this front with the risk of the spurring reviews or something of the like?

Philippe Krakowski, CEO, Interpublic Group: I don’t know. It depends how superstitious you know, like, why are you asking me this question? Look, I think we were pretty overt from the beginning that the benefits are very evident and that, you know, the nature of our business has evolved quite a bit, and what we do has a lot of complexity to it, and, you know, that sophistication and the and the breadth of what we do, you know, meant that, you know, the industry has kind of moved past what the headlines immediately told you kind of were gonna be the case. And so you you work off of the data set that is, you know, now six months old, and, you know, a lot of those headlines around, like you said, talent, clients, etcetera, have have been overblown. I’m gonna, you know, knock wood somewhere and, you know I I think we also you know, I think that the nature of what we’re trying to do has gotten the attention of a couple of our competitors, and there is kind of concern on their part, and so some of that noise is being stoked by people who would have a vested interest in that being the case.

So, we’re gonna stay focused on clients. We’re very client centric companies and our people, and we’re gonna kinda just keep moving through it. But, so far, so good.

Operator: And, to put this issue to bed, it sounds like the idea of conflict, right, wasn’t even necessarily an issue going into this, hasn’t been an issue for maybe a number of years.

Philippe Krakowski, CEO, Interpublic Group: Again, I I think that the the you know, if you think about the industry as it was, you know, fifteen plus years ago as opposed to what it is now in terms of, the sophistication of services, the the focus on, you know, applying data and tech to get to outcomes, the way in which we integrate and take a lot of complexity, you know, out of the equation and help clients do big things across a lot of across geography or across so I I do think that the industry has kind of moved past that perceptual hurdle as of as of some time ago. Got it.

Operator: Maybe just staying one more with the deal. Wanted to see if you could provide your view on the regulatory process from here, including in The US where you are currently in a second review with the FTC.

Philippe Krakowski, CEO, Interpublic Group: There’s you know, you would know better than most. There’s you you you can you can say, relatively speaking, not a whole lot. But we were clear at the outset that we thought that this was a deal that would close in the back half of this year. We haven’t seen anything in the process to date that’s sort of not consistent with what we expected, and we are still on track to close in the back half of this year. You’ve heard as we’ve cleared hurdles, whether that was shareholder approval, which was very, very strong in both cases, and what’s now seven out of the 18 jurisdictions that have given us a thumbs up.

So we’re just moving through the process, and we’re confident it’s gonna get us to where we said it would when we started.

Operator: Got it. Maybe shifting gears away from the deal. So, you recently reiterated your organic growth guide at minus 1% to minus 2% for the year. That’s net of account losses or a handful of account losses. And, you framed the media environment through April as steady.

I think investors have been surprised by the advertising resilience observed generally through this recent earnings period. And, curious as you speak to marketers regularly, know, maybe what do you think is missed about how they approach kind of spending into periods of volatility?

Philippe Krakowski, CEO, Interpublic Group: Sure. And by the way, for those of you in the audience, there’s like on the left hand side, I’m sorry to talk and not look at you, but it’s like a blinding light. So look, mean, I think that what may be underappreciated is that our clients are very sophisticated. They’ve got a lot of tools at their disposal. They they see the engagement with consumers as something that happens across oh, thank you.

Across range of channels, across very, very complex customer journeys that are also not only complex, but but very, very unique person by person. And so, you know, they make the kind of decisions that we’re talking about in a in a way that’s very informed. And so they’re aware and they see, like all of us, that there’s a lot of uncertainty out there and that the situation you know, it’s it’s it’s it’s pretty fluid. Right? At any given point in time, you don’t necessarily know if what’s going on at the macro level or at the policy level is gonna sort of play its way out or when the impact will be felt.

And so, it’s you know, the the the conversations are very consistent with what we outlined about a month ago, which is that there’s thought being given and we’re very engaged with clients in sort of scenario planning, thinking through, you know, and how one might move to these contingency plans, what it will mean in terms of capability mix or media, shifting media channels, thinking about from a consumer messaging or outreach point of view, whether you’re dialing up certain things, whether, you know, kind of the value part of the equation for the consumer matters more. But at this point, it’s still the case that the discussions are about, kind of planning for those eventualities not acting upon those plans. And, you know, if that changes, you know, we’ve got we’ve got a lot of different, you know, skill sets and capabilities to help them through those processes. But so far, it’s kinda status quo to what it was, you know, about a month ago. Got it.

Operator: Stripping out the the recent new business losses from your guide, I think you’ve talked to current underlying growth at plus 1% to plus 1.5%. So just separate from the Omnicom merger and any revenue synergies, how would you think about the path of getting IPG kind of back to some of the organic levels you were executing at a few years ago?

Philippe Krakowski, CEO, Interpublic Group: I mean, I think we were pretty clear throughout that, you know, the the parts of our business that have worked very well over time, you know, media was clearly a driver for us, and there’s a lot of, kinda media plus data in in our case, which allows us to help clients get accountability against the the the marketing dollar spent and and really plan for and get to outcomes. That, you know, that’s an area where we’ve had very strong performance, but that there was a kind of dimension to that offering that the market had become sort of more, you know, it had privileged it or it had sort of reintroduced it into the mix because it had been deemphasized for a number of years. And that’s a sort of principle capability where where you have proprietary trading of some kind. So I think that, you know, that’s something that we built over the course of the year last year, and that would be a portion of it. I think that you know we’ve been building out our commerce capabilities and we’ve got some conspicuous strengths there, but one of the things that we’re very excited about is that Omnicom made that commit, did a significant acquisition getting to be about a year and a half maybe plus ago and bought Flywheel.

So we would be likely building or perhaps doing some kind of m and a around that. We did a modest sized deal towards the end of the year last year that bought a dataset and some technology around commerce data into the group, but we would be more leaned into that, but I think we’ll unlock a lot of that on the other side of the deal. There’s a lot of interest on our folks’ parts and on clients’ part, you know, in terms of what will Flywheel do and then what will the the data capabilities of a Flywheel plus Acxiom, give us in terms of our understanding of consumers kind of from the right at purchase or next to point of purchase in the digital ecosystem all the way through what Acxiom gives us, is an understanding of the consumer, you know, very, very powerful data management capability and and first party data set that is people based and privacy compliant and, you know, that combination will be will be very powerful, we believe. So if we were if we were not moving through this, I think it’s some of the areas that we’ve talked about previously.

Operator: Can I go back to your comment for a second there on principle? Because you said for a number of years maybe it wasn’t there wasn’t a heightened need for that and then there was. What kind of what kind of shift did? Was it there was a concern about what principle meant and that went away or was it more just, hey, we need this certainty and and principle kind of offers that?

Philippe Krakowski, CEO, Interpublic Group: I mean, I think I think certainty and certainty around around value is something that might have more currency, no pun intended, right now just given the uncertainty that we’re seeing maybe going back a few years given what took place obviously with kind of interest rates, a long period of inexpensive money. But I also think that some things happened inside of the kind of, you know, inside of the media ecosystem and you’ve got, you know, different range of inventory and, you know, kind of more more media owners who who are kinda leaned into trading in that way. So, think it’s it’s both. It’s the media ecosystem and then it’s some of the the macro.

Operator: Got it. Okay. And then, you have kind of cited a prior lack of a principal media buying offer as as a factor in some of the new business that’s weighing on organic growth this year. You have started to scale this up. Curious how this has maybe changed conversations in the RFP process.

Philippe Krakowski, CEO, Interpublic Group: Well, you know, it’s it’s not universal. So there are clearly circumstances in clients where you see that it’s gonna be part of their kinda decision matrix and and other circumstances where, you know, for a whole host of reasons, it’s maybe not as prominent. In our case, the fact that we’ve spent, you know, the last twelve months moving pretty quickly to put it in place and do so in a way that, you know, we think has the appropriate sort of underlying systems and, you know, that we’re managing and mitigating kind of all of the moving parts of having the model in place. There are definitely circumstances where when we show up and it’s it’s in place, it’s it’s, you know, kind of added to the competitiveness of what, as I said earlier, you know, has always been kind of one of, if not our, you know, kind of standout offering. And as you said, you know, we’ve we’ve you know, we’ve won without it in the early parts, the middle parts of last year, notwithstanding one or the two of these large losses, But we’re definitely seeing it as a as a net plus in that where, you know, like with any business, you sort of prequalify, you know, the situation and you understand what the what the success metrics are gonna be.

But if something is heading in that direction, we now have the ability to kinda lean into that or to rotate into that as with part of our solution.

Operator: Maybe just one last one on on new business. Have you seen any change in the pace of RFPs coming through the pipe? You’ve heard different notions, right, about what the economy could mean for that, that it would potentially slow processes down, right? Maybe marketers don’t want to engage in expensive process RFP while while the economy is, you know, potentially going to a bad cycle.

Philippe Krakowski, CEO, Interpublic Group: I mean, I think that’s still a little bit more anecdotal. But, yeah, I I do think that, you know, we’re seeing sort of average level of reviews, pitch activity industry wide, not particularly it it’s not doesn’t stand out as as, you know, extremely busy or or particularly light. But it stands to reason that if you sort of think about the back half of the year, given the uncertainty and as we’re saying, given the conversations with clients are about kind of contingency planning and thinking through you know, kind of what might be. I think it probably modestly decreases the likelihood that somebody wants to add that incremental level of, you know, just it’s a lot of it’s a lot of work, it taxes your teams as a if you’re a marketer to a meaningful degree. If you feel strongly you want a new partner, you’re gonna move forward anyway, right?

If you think that kind of there’s gonna be opportunity in that, You know, but at the margins it would probably, you know, kinda slow people down a little.

Operator: Got it. In your last earnings release you highlighted strong contribution from Acxiom, not just on a standalone basis, but also in its activation of data across your agencies. Can you speak a bit to the advantage of maybe a recurring business like Acxiom in the current environment, but kind of also to how that data is now being leveraged at IPG relative to maybe your competitive set.

Philippe Krakowski, CEO, Interpublic Group: Sure. I mean, we’ve always talked about the fact that it is a you know, as a business model, it has it has long term contracts built into it. So advantageous given that, you know, the rest of the business, you know, the pro say, on the other end of the spectrum, you’ve got, you know, the project based businesses. In terms of kinda how we deploy it and and sort of what we tap into, it’s been very kind of complementary, instrumental, and and really kind of baked into, how we go to market with our media offering and has, you know, consistently over molten, you know, 16 since ’18 when it when it became part of the group, and up until, you know, this last eighteen to twenty four month, period on the media side, it clearly helped fuel a very strong performance there. It’s something we use increasingly across the group, I’d say in the last six to twelve months with the advent of Gen AI.

We’ve added capabilities or what we would call consoles to the operating system that we use, Interact, sort of the the technology layer that’s allowed us to activate, to use that data, whether it’s to do planning, audience identification and planning work, whether it’s to do activation work kinda in in the media business, we’ve added capabilities that allow professionals from across the group to tap into it. So there’s, you know, kind of a a technology and an AI layer. And so what you now have is the ability to use the data no matter where you sit in our world, whether you are a planner at a public relations firm or an ad agency, whether you are wanting to pretest messages against, you know, sort of synthetic AI powered persona based on the on the Acxiom data, whether you’re doing, you know, scale content generation for personalized sort of content kind of across an integrated client or a client that sits inside one of our larger ad agencies. So, you know, the use cases for Acxiom have grown a lot over the years, and the ability to then build business models that sit underneath that so that you can bring the same level of sort of precision and accountability that we’ve seen in the media business, the the data business, the performance marketing business to the rest of the portfolio.

Now that’s still work in progress, but but that’s what gets us excited about Acxiom sort of full stop. Then even more so when you think about the totality of the offering that, you know, will exist on the other side of the the other side of the acquisition.

Operator: Got it. Health care has been a standout area for IPG for several years. The performance recently is dominated by a single account loss. As you start to lap that, how should performance for the vertical look, and how should we think about the drug pipeline as a potential near term driver?

Philippe Krakowski, CEO, Interpublic Group: Well, I mean, look, I think that’s a that’s a that’s an industry, where, you know, there clearly is a measure of, back to the sort of contingency scenario planning. I think that there’s a lot of thought being given to might there be some underlying shifts to how those companies go to market, but they’ll still need to be in market. And broadly speaking to your question, you know, there’s a lot of innovation that’s still going on. There’s still pretty rich pipeline. You know, obviously you think about, you know, one class of drugs that has just come onto the market in the past year.

And I think that as with anything that’s really transformational, you’re going to find all sorts of sort of incremental or what today would look like off label uses. Know? So we still we still see it as a as a long term. You know, there may be some kind of volatility in the immediate term, but we still see that as a very strong long term driver. And if you think about, you know, maybe even just domestically obviously, but across the world, it’s really important part of the economy.

Right? It’s a really big part of the economy. You know, it’s going to sort out ways to continue to innovate and bring product to market. And we, you know, we still see lots of reasons for growth, whether it’s the the the innovation side or the, you know, population that is kind of moving through different demographically kind of moving, you know, into parts of the cycle where there’s gonna wanna be the opportunity to find ways to have that sort of improve either health outcomes or quality of health.

Operator: It’s really early, but any any conversation around the executive actions this week as it relates to the industry and any feedback you’ve

Philippe Krakowski, CEO, Interpublic Group: Not not that I’m aware of yet, but I’m actually gonna go spend time with some of those clients as of this evening. So got me, but I’m sure it’ll be a topic of discussion.

Operator: Too bad we didn’t have you tomorrow. Okay. Creative is a a disciplined core to holding companies. It’s definitely undergoing a lot of changes. Maybe just talk about the current state there.

Maybe the vision also a couple years from now as as sort of the tech changes to a point where you can really kinda track the performance of the content and and do attribution on it.

Philippe Krakowski, CEO, Interpublic Group: Well, look, I mean, back to your first question about things that we and Omnicom have in common. Right? I mean, you know, we’re both you know, they’re both are holding companies where, you know, the creativity and the creative side of the house has been kind of an area of strength for us for a long time. And so, know, the way that, you know, I tend to think about what’s possible is that ideas are still gonna be really powerful and that, you know, people still take information on board and make decisions and actually kind of, you know, kind of synthesize and and kind of make meaning based on kind of stories that they hear, sort of storytelling and narrative, that part of the business is not gonna cease to be an important part of the business. I think that what you know, needs to happen is some of what, you know, you were asking about a few minutes ago, which is how does that sit and live inside of this, you know, rich ecosystem where what we have is technology on the content creation and content delivery side that’s powerful, data assets that are powerful so that we can, you know, tag those assets as they go out into the world, understand how people are interacting with or reacting to those assets.

And so, you know, I think that there’s the opportunity to, on you mentioned on the AI question, to take those parts of the business and have them benefit from technology and data. And, you know, if you think about what the combined company will be able to do, the power of the balance sheet that we’ll have, and the fact that our investments in tech will not only not be constrained, but they’ll then be ones that we can push out against this bigger platform. So, we’ll get those platform benefits, I think, to those investments. So, I think that there’s gonna be the opportunity to take those businesses and evolve their business models so that they’ll be both top and bottom line benefits to kind of those quote unquote more creative or more traditional businesses. But, it’s a part of the business where both Omnicom and we have a lot of strength.

Operator: With Q4 earnings, IPG announced accelerated business transformation program. I think in our view this has flown a bit under the radar just because of the OMC deal, especially when considering the savings generated. Maybe just can you speak to the program? Why was this necessary even absent the Omnicom merger? Kind of what’s been executed to date?

Philippe Krakowski, CEO, Interpublic Group: Well, I mean, we’ve we’ve been pretty clear for a long time as a management team that we see it as our responsibility to keep looking for ways to operate this business in ways that, you know, it does two things. Right? Because if you think about the the transformation program and you look at kind of the fine print as it were, those benefits, those savings are net of of reinvestment. Right? And so you’ve got technology coming into the space, which as I said is one of the reasons why we’re kind of excited about what the two companies can do together.

But independent of that, you know, the thinking has been what does that enable in the way of ways of working? How do we kind of put that to work in our business so that we can free up resource for either kind of higher order and higher value services solutions kind of delivery to clients? And then also, you know, is it the case that if you were building a company that’s, you know, scaled like ours is, pretty federated because I think the sector was in many cases put together through M and A without the technology to kind of create these platforms. So this was something that made sense. You would have seen it kind of in our filings around the merger.

What we saw is the potential kind of long term margin upside for the business. And so, kind of we’re moving through the centralization of certain corporate functions, finance functions, HR functions, and that’s a big driver of this. And then from a ways of working, it’s thinking about production is one center of excellence, analytics given that we do so much more for clients, supporting clients there, And then some kind of at the level of a sub region or regional, we probably had some duplication. But all of that is work that we’re doing anyway because it’s not work that overlaps with that meaningful cost synergy opportunity that we see for the merged entity.

Operator: Got it. Alright. We are exactly out of time.

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