The Interpublic Group of Companies, Inc. - Advertising - Category Directory

(212) 399-8000

71 Avenue of the Americas

New York, NY 10020
www.interpublic.com

Sales

$6 billion

Business Description
The Company is a group of advertising and specialized marketing and communication services companies that together represent one of the largest resources of advertising and marketing expertise in the world. With offices and other affiliations in more than 100 countries, the Company had revenues of approximately $5.863 billion and a net loss of approximately $451.7 million in 2003.

Advertising and Specialized Marketing and Communications Services Businesses

In the last five years, the Company has grown to become one of the world's largest groups of global marketing services companies, providing its clients with communications and marketing expertise in three broad areas:

* Advertising, which includes advertising and media management;

* Marketing Communications, which includes direct marketing, database and customer relationship

management, public relations, sales promotion, event marketing, on-line marketing, corporate and brand identity, brand consultancy and healthcare marketing; and

* Marketing Services, which includes sports and entertainment marketing, corporate meetings and events, retail marketing and other marketing and business services.

The Company seeks to be the best in quality and a leading competitor in all of these areas.

The Company is currently organized into four global operating groups. Three of these groups, McCann Erickson WorldGroup ("McCann"), The FCB Group and The Partnership, provide a comprehensive array of global communications and marketing services. Each offers a distinctive range of solutions for the Company's clients. The fourth global operating group, The Interpublic Sports & Entertainment Group ("SEG"), focuses on sports marketing and event planning activities. In addition to these groups, the Company also includes a group of leading stand-alone companies that provide their clients with a full range of advertising and/or marketing communications services. See "Notes to the Consolidated Financial Statements - Note 15: Segment Information" for further discussion.

The Company believes this organizational structure allows it to provide comprehensive solutions to clients, enables stronger organic growth among all its operating companies and allows it to bring improved operating efficiencies to its organization.

McCann Erickson WorldGroup was founded on the global strength and quality of McCann, one of the world's leading advertising agencies. It includes companies spanning advertising, media, customer relationship management, events, sales promotion, public relations, on-line marketing communications and healthcare communications. Launched in late 1997, McCann has expanded rapidly to become one of the world's leading networked marketing communications groups, now working with more than 25 key worldwide clients in three or more disciplines and with more than 40 US clients in two or more disciplines. McCann Erickson WorldGroup includes the following companies:

* McCann Erickson Worldwide (advertising),

* Universal McCann Worldwide (media planning and buying),

* MRM Partners Worldwide (direct/customer relationship management; on-line marketing communications through Zentropy),

* Momentum Worldwide (event marketing/sponsorship/sales promotion), and

* Torre Lazur McCann Healthcare WorldWide (healthcare advertising and marketing).

The FCB Group is a single global integrated network centered on Foote, Cone & Belding Worldwide and its advertising, direct marketing and sales promotion capabilities. This group also includes the following specialized services:

* FCBi (direct and digital marketing),

* Marketing Drive Worldwide (integrated promotional marketing),

* R/GA (web design and development),

* FCB HealthCare (healthcare marketing), and

* The Hacker Group (customer acquisition direct marketing).

The Partnership, a global, client-driven creative leader, is anchored on the quality advertising reputation of Lowe & Partners Worldwide. The Partnership provides collaboration across a global group of independently managed networks with creative and executional capabilities across all disciplines. The partners seek to preserve their uniqueness while creating the ability to interconnect seamlessly to better service clients. Partner companies include:

* Lowe & Partners Worldwide (advertising),

* Lowe Healthcare Worldwide (healthcare marketing),

* Draft (direct and promotional marketing),

* Zipatoni (promotional marketing),

* Mullen (advertising), and

* Dailey & Associates (advertising).

The Interpublic Sports & Entertainment Group focuses on sports marketing and event planning activities. SEG was formed during the second quarter of 2002 through a carve-out from the Company's other operating groups of related operations. It includes:

* Octagon (sports marketing),

* Motorsports, and

* Entertainment PR (Bragman Nyman Cafarelli and PMK/HBH).

Through March 1, 2004 Jack Morton Worldwide was included as a component of SEG.

The Company is currently evaluating the manner in which SEG and its component parts are managed and reported. In January 2004, Interpublic sold the four motorsports circuits owned by its Brands Hatch Circuits unit to MotorSport Vision Limited for approximately $26 million. As a result of the sale, Interpublic's remaining interest in Motorsports consists of its obligations related to the Formula One British Grand Prix and the lease of the Silverstone track.

Independent Agencies

Interpublic also includes a group of leading stand-alone companies that provide their clients with a full range of advertising and/or marketing communications services and partner with the Company's global operating groups as needed. These include:

* Campbell Ewald,

* Deutsch,

* Hill Holliday,

* The Martin Agency,

* Carmichael-Lynch,

* Gotham,

* MAGNA Global (advertising media negotiations and television program development),

* Weber Shandwick Worldwide, Golin/Harris International and DeVries Public Relations (public relations),

* FutureBrand,

* Initiative Media (media planning and buying), and

* Jack Morton Worldwide (prior to March 1, 2004, a component of SEG).

In addition to its domestic operations, the Company provides services for clients whose businesses are international in scope, as well as for clients whose businesses are restricted to a single country or a small number of countries. The Company has offices in Canada, as well as in one or more cities in each of the following countries and territories:


EUROPE, AFRICA AND THE MIDDLE EAST


Austria
Hungary
Namibia
Slovenia

Azerbaijan
Israel
Netherlands
South Africa

Bahrain
Ireland
Nigeria
Spain

Belgium
Italy
Norway
Sweden

Bulgaria
Ivory Coast
Oman
Switzerland

Croatia
Jordan
Pakistan
Tunisia

Czech Republic
Kazakhstan
Poland
Turkey

Denmark
Kenya
Portugal
Ukraine

Egypt
Kuwait
Qatar
United Arab Emirates

Estonia
Latvia
Romania
United Kingdom

Finland
Lebanon
Russia
Uzbekistan

France
Malawi
Saudi Arabia
Zambia

Germany
Mauritius
Senegal
Zimbabwe

Greece
Morocco
Slovakia



LATIN AMERICA AND THE CARIBBEAN


Argentina
Colombia
Guatemala
Peru

Barbados
Costa Rica
Honduras
Puerto Rico

Bermuda
Dominican Republic
Jamaica
Trinidad

Brazil
Ecuador
Mexico
Uruguay

Chile
El Salvador
Panama
Venezuela


ASIA AND THE PACIFIC


Australia
Japan
Paraguay
South Korea

Cambodia
Malaysia
Philippines
Taiwan

Hong Kong
Nepal
Singapore
Thailand

India
New Zealand
Sri Lanka
Vietnam

Indonesia
People's Republic

of China

Operations in the foregoing countries are carried out by one or more operating companies, at least one of which is either wholly owned by Interpublic or a direct or indirect subsidiary or is a company in which Interpublic or a direct or indirect subsidiary owns a 50% interest or more, except in Bahrain, Cambodia, Egypt, Kuwait, Jordan, Lebanon, Oman, Nepal, Qatar, Saudi Arabia, Trinidad and United Arab Emirates where Interpublic or a direct or indirect subsidiary holds a minority interest.

The Company also offers services in Albania, Aruba, the Bahamas, Belize, Bolivia, Gabon, Ghana, Grand Cayman, Guadeloupe, Guam, Guyana, Haiti, Ivory Coast, Malawi, Martinique, Namibia, Nicaragua, Nigeria, Pakistan, Paraguay, Sri Lanka, Surinam, Uganda, Zaire and Zambia through association arrangements with local agencies operating in those countries or territories.

Clients

The five clients that made the largest revenue contribution in 2003 accounted individually for approximately 1.8% to 8.3% of the Company's revenue and in the aggregate accounted for approximately 17.4% of the Company's revenue. The Company's twenty largest clients accounted for approximately 29.8% of its revenue in 2003. Based on revenue, as of December 31, 2003, the Company's largest clients included General Motors Corporation, Johnson & Johnson, Microsoft, Nestle and Unilever. While the loss of the entire business of any one of the Company's largest clients might have a material adverse effect upon its business, the Company believes that it is unlikely that the entire business of any of these clients would be lost at the same time, because the Company represents several different brands or divisions of each of these clients in a number of geographical markets, in each case through more than one of the Company's agency systems.

Representation of a client rarely means that the Company handles advertising for all brands or product lines of the client in all geographical locations. Any client may transfer its business from an agency within the Company to a competing agency, and a client may reduce its marketing budget at any time.

The Company's agencies have written contracts with many of their clients. As is customary in the industry, these contracts provide for termination by either party on relatively short notice, usually 90 days but sometimes shorter or longer. In 2003, however, 25% of revenue was derived from clients that had been associated with one or more of the Company's agencies or their predecessors for 20 or more years.

Personnel

As of January 1, 2004, the Company employed approximately 43,400 persons, of whom 17,900 were employed in the United States. Because of the personal service character of the marketing communications business, the quality of personnel is of crucial importance to the Company's continuing success. There is keen competition for qualified employees. Interpublic considers its employee relations to be satisfactory overall.

The Company has several active programs for training personnel. These programs include meetings and seminars throughout the world.