Shares in advertising holding company Interpublic Group of Cos. climbed more than 10% Wednesday — hitting a 52-week-high — after reporting earnings that show the rebound of the ad market, CNBC reports.
IPG is a holding company that owns creative, media, PR, experiential and other agencies operating in the advertising industry. The company, like many in the ad industry, suffered at the outset of the pandemic: Its shares dropped 45% from pre-pandemic levels on February 28 to a low of $11.63 on March 23.
The pandemic caused an immediate pullback in ad budgets in 2020, with certain areas like travel remaining slow throughout the year. But while areas like digital rebounded quickly, more impacted areas like events appear to be showing positive traction. IPG said its events and sports marketing disciplines, which had been “significantly impacted” during the pandemic, have seen some recovery.
“We clearly have experiential and events showing a real recovery, though they’re not all the way back,” CEO Philippe Krakowsky said on the company’s earnings call. “Month to month in the quarter, we saw consistency. So that’s something where in terms of projecting forward we see that as encouraging.”
The company reported second quarter 2021 net revenue of $2.27 billion, up 22.5% from the second quarter of 2020. Executives said if public health issues continue to progress, they believe the company can deliver organic growth of 9% to 10% for the full year.
J.P. Morgan analysts said the results are indicative of both a “robust advertising recovery” and IPG’s “premium positioning” in the market. IPG competes with other major holding companies including WPP, Publicis Groupe and Omnicom Group, which also reported earnings this week.
Omnicom on Tuesday reported global revenue of $3.6 billion in the second quarter, a 27.5% increase year-over-year. Those results reflect a “strong global macro recovery” and the collapse in ad spend a year ago, Morgan Stanley analysts said in a note Wednesday.
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