By Megan Graham

Advertising holding company Interpublic Group of Cos. reiterated its full-year organic growth expectations, saying it isn't yet clear whether macroeconomic turbulence will create fallout for its clients and their marketing spending.

"The implications vary widely for our clients across industries and geographies. Our posture, as always, has been to stay close to our clients, especially in periods of heightened uncertainty," IPG chief executive Philippe Krakowsky said during the company's first-quarter earnings call Thursday. "As of now, marketers appear to be in a phase of scenario planning, assessing the implications of possible changes to the flows of global commerce and as they sort these developments."

The company, which owns agency groups such as McCann Worldgroup and IPG Mediabrands, said it still expects a decrease in organic revenue of 1% to 2% in 2025.

IPG reported a 3.6% decline in organic revenue in the first quarter -- better than the consensus estimate of a 4.1% decline but worse than the 2.9% decline forecast by Citi, according to a research note from the firm Thursday morning.

Krakowsky said the company has shown that it is capable of navigating difficult circumstances.

"We continue to provide services that marketers require in order to deliver sales and business outcomes, regardless of where we are in the economic cycle," he said.

IPG agreed late last year to be acquired by Omnicom Group, another major agency holding company. The deal is on track to close in the back half of the year, IPG said Thursday.

Omnicom last week reduced the lower end of its expected range for organic growth this year, saying it was unsure how or whether tariffs will impact marketer clients' spending. Publicis Groupe, the French advertising and marketing-services conglomerate, confirmed its expectations for the year after its organic growth beat expectations in the quarter, saying new business wins would be able to make up for potential cuts to client spending because of tariff uncertainty.

But analysts at research firm MoffettNathanson said in a note last week that ad holding companies haven't been historically reliable in being a "canary in the coal mine" for economic downturns.

"Over 20 years of history covering this group has firmly convinced us that no one in agency land sees the storm coming until the rain is pouring in front of us," they wrote in a note last week. "In the first quarter of 2020, as the Covid-19 pandemic started to rage, the view from every agency CEO was as bland and as nondirectional -- and as wrong -- as could be. However, on the bright side, our recent work on the economic impact of recessions on Omnicom and its peers show an industry that does a herculean job managing costs in a downturn to limit earnings damage."

Write to Megan Graham at megan.graham@wsj.com

(END) Dow Jones Newswires

April 24, 2025 12:33 ET (16:33 GMT)

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