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Morningstar | IPG Will Remain One of the Top Companies in the Advertising Space

Interpublic Group is the fourth-largest player of the Big Five advertising companies (IPG, WPP, Publicis, Omnicom, and Dentsu). We expect IPG to maintain its market position as it generates competitive organic growth, continues to make acquisitions, and increases focus on faster-growing emerging markets and the overall digital ad market. The firm has demonstrated consistent operating margin expansion through cost controls during the past four years, which we expect to continue through the next few years, highlighting the success of IPG’s turnaround, which began more than 10 years ago.IPG has transitioned from traditional advertising into a complete solutions provider with digital and other services, such as public relations and consulting. The firm further diversified its revenue in 2018 as it acquired data solutions provider Acxiom. We look for IPG to continue its acquisition growth strategy to gain further traction in other faster-growing international markets. Globalization of businesses in various verticals has increased demand not only for vertical-specific advertising expertise, but also for experience, knowledge, and a clearer understanding of different cultures and regulations.We expect IPG to continue acquiring and to invest in the growing digital advertising space. Clients of IPG and its peers are allocating more ad dollars toward below-the-line, or more targeted, digital campaigns, creating growth opportunities for agencies like IPG’s MRM/McCann and Cadreon. IPG has made headway in providing different components of digital advertising such as programmatic media buying and ad placement, along with data analytics and performance-measurement services.