Good morning, everybody. I'm Ben Swinburne, Morgan Stanley's Media Analyst, and welcome to day one of our 2021 TMT Conference. We're really excited that you're joining us, even if it is remote, and we're looking forward to a great week. First, just some administrative items. Please note that important disclosures, including my personal holdings disclosures and Morgan Stanley disclosures, all appear as a handout available in the registration area and on the Morgan Stanley public website. Well, I'd like to welcome to the conference Philippe Krakowsky. He is the CEO of Interpublic Group. Most of you, I'm sure, are aware, but Interpublic is one of the world's premier advertising and marketing services companies, with agency brands covering the spectrum of marketing disciplines and specialties. And Philippe is a recently appointed CEO at IPG, although he's been at IPG for quite a while. Philippe, it's great to see you, and thank you for being with us. Hey, Ben, thanks for having me. Absolutely. Well, why don't we start there? You and I were just chatting about your first year in the CEO. What are your strategic priorities for IPG, especially as we hopefully emerge from this pandemic that's been happening for the last year and change? You know, it's interesting, as you said. I mean, I think our announcement was late last year, and so I've been in the chair for grand total of, you know, since January 1st, interesting times, right? But, you know, my tenure with a company goes back a long time, right? So, as you know, I led strategy for the group and talent and collaboration at corporate for probably a good decade or so. And then sort of separately, and on top of that, for three or four years, ran the media operations, which is where, you know, there's probably the greatest focus on incorporating technology and data, and where a lot of the really dynamic things that are happening in the business, you know, kind of have been getting the most traction. And then last year, in a sort of transitional period, I was Chief Operating Officer. So I think that what you got is, you know, a senior team from Michael, our CFO Ellen, and I that have worked together for a long time. And I think that that's, you know, there's a lot of continuity. So I'd sort of break the strategic priorities down into two buckets. There's the things that largely stay the same or where we're going to kind of stay the course. You know, and on those, I'd sort of say, see everything through the lens and the eyes of the client. And so that kind of client-centric solving marketing problems for clients, but then we believe over time, you know, getting line of sight into a broader range of problems or a broader range of opportunities with clients. You know, talent's going to be a key part of the strategy, regardless of the range of talent, going from that, as you said, the marketing services expertise, and we've been adding technology, data, you know, so talent's clearly going to be a big part of it. And then I think the third, you know, carryover holdover is, you know, that sort of getting the various pieces of the portfolio collaborating so that, in essence, we can kind of be the marketing services integrator for clients, right? So that's what we call open architecture, the solutions where we're delivering a range of the talent. And then I think operationally, the things that stay the same are kind of a discipline on costs, you know, on a solid balance sheet and a balanced approach to capital allocation. And in terms of what changes of kind of the quote-unquote new stuff, I think we've been sort of telegraphing the answer for, you know, the last three, four, five years, and it's what's helped us outperform the sector. And if you think about all the, you know, what you've been, you know, writing recently, I was listening to some of your prep for this, kind of the degree to which the pandemic has been accelerating changes that we were already anticipating. So I don't think we're going to change direction. I think we're going to maybe quicken the pace and lean in. So it's about prioritizing the data and technology layer that we've been building in the company as a foundation for everything that we do so that we can be more precise and more accountable. And that kind of becomes like the GPS for the company. It positions us to help clients make these decisions to drive a growth agenda, then, you know, another thing that you call out a lot in your writing, which is spot on, is just sort of disruption, right? and so, you know, everything in media is going to become more addressable, and the way you can activate across channels is clearly going to become more addressable, so, you know, what we then need to do that, so sort of strategic priority is, you know, really understanding audiences at a very granular level, whether that's existing or potential audiences, so that we can personalize messages and we can make the experiences richer, and we can also kind of, you know, when we advise clients on their investment, kind of max out the efficiency as well as the effectiveness. And then before I kind of shut up and let you get to the next question, I think the only other two things I'd add are, you know, data ethics and data privacy. I think they are going to become, you know, more important, particularly in our space, but for every company. So our tech and data solutions, you know, if we can help marketers navigate that complexity and connect in a way that drives their business but does so in the right way, that could be, I think, a differentiator or a further differentiator. You know, and look, content clearly continues to matter, right? So getting the balance right between the things that we've traditionally done very well and the areas where around creativity and all the marketing disciplines were strong, and then integrating that side with the tech and the data side of things. I think that sort of on a macro level, that's the strategic view of kind of how we're going forward. Yeah, well, that's helpful. You know, Philippe, you mentioned in the last three or four years, a lot of the themes you guys have been talking about and your acquisition strategy has been around driving the business. You know, from outside the company, in terms of investors and analysts, it's not easy for us to look at your business and understand the sort of, you know, micro drivers from the outside, but I often get asked why or how IPG continues to sort of consistently outperform the industry from a growth rate point of view, and you touched on that before. Maybe you could talk a little bit about what you think from where you have been and now in the CEO role has driven IPG's, you know, fairly consistent multi-year, even in 2020, you know, outperformance of the industry. Give you a chance to brag a little bit. No, everything's relative in 2020. Yeah. I don't think, you know, I mean, I can't speak to decisions that, say, our competitors have made, and I'm not sure I could kind of give you, you know, a really precise rank order list of where the difference lies. But I mean, I can definitely unpack for you kind of what we've done and what's central to our performance. And then the fact it's differentiated is obviously, you know, something to your point that we feel good about, but that we got to just go out and keep delivering on. So I'd say that, like, top, you know, talent as a sort of our talent strategy or our approach to talent, where we want the agency brands to be strong. And I think that's because top talent wants to be part of an agency that's known to be kind of outstanding or a leader in whatever their area of expertise is, right? And so I don't think they're drawn to working at a holding company level. I don't think they're particularly interested in kind of being in a siloed sort of single client team. You know, they want challenge and they want the breadth of client problems. So I think one of the things we've done is we've invested in the agencies, and I think we're pushing them, and I think we're going to push them more to get really focused on the three or four core capabilities where they can excel, right? Because the nature of problems is getting more complex. I think you have to be clear about what are the few things you're really, really good at. And then during the first kind of waves of digitization that we're hitting, you know, media and marketing and all industries, we didn't silo those skill sets, right? And so we embedded them into every one of our units. And I think that, you know, that also kind of gave them a bit of a leg up in their specific area, and it gave us a way to wire stuff together because people had some kind of a common language and a common level of, like, base expertise. And then, you know, we incubated some of the more sophisticated digital capabilities, you know, whether that's an R/GA or a Huge, you know, acquisitions, small, you know, which have grown from kind of single agency offices to sort of mini networks. You know, MRM, which is inside of McCann, was an old school kind of direct agency. And then, you know, they built up large-scale kind of digital asset management capabilities, CRM work. They did website builds. Then the CRM work's embedded, kind of informed by all the consumers' digital habits. And then healthcare is a sector that's strong for us. It's a vertical that's really strong. And that's another one where, you know, maybe that more technical set of skills and expertise is required. So we kind of build that out. And then inside of Mediabrands, which is kind of our sub-holding that has media, we focused on search, then we built the tech. We really kind of built a software layer inside of there to support programmatic, you know, and then we started to build our data stack. And then Acxiom's been a key partner as we were building our data capabilities and some data solutions for clients. So, when that process came along, even though we hadn't been big, you know, we'd sort of done a lot of build your own sort of DIY and then very targeted acquisitions. We knew them well, and we kind of asked ourselves, you know, scale, very deep know-how, kind of credibility. Those were benefits that would come with. And so was this a case where, you know, a buy would really get us that much further along? And if you think about the speed at which this is all happening, so, you know, that's two and a half years in, and they've been a big part of our success. So I'd say that, you know, it's kind of sticking to what we kind of came to the party with and being really focused on talent and on getting the right skill sets, and then adding this layer of, you know, more tech-enabled kinds of services to the mix. That's kind of where, you know, what I think has worked for us. Yeah. Makes sense. You mentioned, speaking of technology, Philippe, on the last call. I like this line, the velocity of change has picked up even further in the digital space. You know, everyone in the market is trying to figure out how COVID and the acceleration of technology adoption is going to impact marketing. And I'm sure you guys are as well. What does this acceleration mean to IPG? And if you can take it back to growth and profitability, you know, that would be helpful as well. But just to think about what these trends, which many people, I think, debate whether this is good or bad, you know, to use some crude words, for the agency business. Clearly you think they're positives. Maybe you can help us think about why. Yeah, look, I think there are opportunities, right? I mean, it's funny because, again, as an industry observer, you've kind of chronicled a lot of what is kind of impacting what I meant on, you know, by that is, you know, so the shift to streaming and on demand in terms of how media is being consumed, you know, was coming anyway, was kind of starting to accelerate last year, put it kind of on steroids. So, you know, you're going to see more ad dollars going to digital channels. So the question is, you know, are you provisioned to basically help clients feel that you're the person they want to, you know, they both trust and rely on to help them make smarter decisions around that? Another big shift, you know, is kind of the growing adoption of e-commerce, right? And so what's interesting is that even clients for whom that was not as much of a priority and categories where that's kind of a heavier lift, say, like CPG, they've been really, really looking at and thinking hard about kind of what's going on there. And then I guess the last bucket I'd say is kind of, you know, digital business transformation where you want to understand what's going on with platforms and tech, and it's going to kind of inform how you go to market overall. So, you know, what does that mean to us? It means that, you know, kind of we can show up, engage with clients. There's a kind of a bigger addressable universe of briefs that we can raise our hands, you know, kind of qualify for. And so whether that's, you know, our media offering that we've built, which has got kind of, I'd say, kind of more of a consultative, you know, we've never been kind of a just the volume or, you know, by virtue of the volume, we suggest to clients that that's what is going to help us, you know, get them kind of the best deals in the market. We've always been a, it's the intelligence that you bring to those investment decisions. And then on e-com, you know, and MRM, as I mentioned, inside of Mediabrands, we've got a search and SEO agency Reprise where we've been building out a lot of e-com capabilities, and Huge in R/GA. And then the B2B projects, so it's sort of that infrastructure approach to how does the client get organized at an enterprise level to deal with a new environment. I think that on growth, you know, there should definitely be, you know, opportunity. In terms of profitability, you know, these new offerings, this kind of pivot to having a data component to our offering and then a software layer so we can activate that data, we can turn it into kind of intelligence that the agencies can apply. You know, the agencies are where clients, it's not just where our people come to work, it's also where we activate with a client, right? It's where the relationship exists and where we can bring these new capabilities. These new ways of working, I think, you know, we believe should open up different revenue streams, right? You know, licensing and IP, which would clearly be a creative, you know, with kind of more data-driven sort of precision solutions. You can do more performance models. I think that's also, you know, an opportunity as we do more of that to kind of enhance margins. So I think, you know, net net, we see, you know, it's funny, you know, Michael always used to say, you know, complexity is good, but, you know, I do think that when you've got the breadth we've got and when you've sort of been supplementing the core strengths with these capabilities that orient us to the changes that, you know, you were asking about, Ben, I think, you know, there's definitely opportunity. Yeah. Yeah, Michael also likes to use the phrase open architecture. Back when we used to do conferences in person, that was a frequent one. Yeah, we're all looking forward to getting back to that, right? Yeah, for sure. But just to back to your point though, on technology and complexity, does open architecture, which at least I read as, you know, a client has access to the whole suite of services at IPG, wherever they come in, does that become harder in an environment where the tech is changing at this pace and the need for real, you know, real expertise in analytics and technology, you're probably having to hire a lot more engineers, et cetera. Does that get more challenging or does it remain a competitive advantage for IPG in your mind? Look, I mean, I think what's interesting is, you know, to your point, I think kind of when you've been doing something and it's been working well and other people sort of start talking about similar things, you know that you've got a little bit of a head start, but you got to kind of keep adding. So it feels to me like this idea of open architecture and integrating is sort of working. It's like forever work in progress, right? And then, as you say, you know, we've got a lot of experience because when we built, you know, the search capability or when we built programmatic and essentially a, you know, tech layer inside of Mediabrands, those things were being connected to our big client engagements. But it's definitely. There's more moving parts. So, you know, I think one of the reasons, I think you're, you know, you're right. It's one of the reasons why I said earlier that with our agencies, we're, you know, kind of increasingly saying to them, focus on the three or four things you're really, really kind of outstanding at. Because I think that in the early days, when everything became digital, you know, you know, we liked that our operators were entrepreneurial. And so there was a degree to which people kind of were like, oh, I can do that too, right? And I think now what you need is you need kind of enough of a reality check or like humility so that you can go, no, no, no, you guys are good at these three or four things. When we're bringing you onto the team, those are the two sort of swim lanes you've got. Then these are where, so look, I think that the idea of kind of, as you sort of said, you know, like open architecture, the people who run the engagements, yeah, the profile will evolve in the same way that if you're a CMO these days, you have to understand this stuff in a way that five years ago you didn't. You know, five years hence, if you don't, you know, you probably aren't sitting in that chair. I think that's definitely a, you know, a filter for us. But, you know, it's surprising. You find people who have either the capacity or the curiosity, kind of they come at it from different, you know, it's like relationship management in, you know, the financial services business. You know, you definitely need to understand, but there's a point at which the really deep subject matter tech expertise, you just need to know that your teammates are on to do that. I don't think you're going to be contacting those folks, but yeah. Let's come back to this year. We're not out of the mess yet, as I'm sure you would agree. Maybe you could talk a little bit about the outlook for 2021. You talked about, you know, significant uncertainty in terms of visibility into the business, which makes sense. But what parts of the business are performing relatively better than others as you sit here early in 2021? Look, I mean, I think it's kind of, not a lot has changed since our call. And I wonder, you know, obviously, if you sort of think about it and go, okay, so the recovery is all kind of, you know, we're all spending all of our time sort of talking about, you know, virus variants and about vaccine rollout and about stuff that, you know, none of us ever thought we would have to be this, you know, focused on. So the big hinge is still to my mind, you know, resolution of the health crisis. And obviously, we're getting more clarity around, you know, or we will get more clarity around, you know, stimulus, et cetera. But so it's very sector-driven. And so you're seeing really disparate impacts. It's really consistent, you know, early days yet this year. So healthcare and retail as client sectors grew for us in 2020. And they're looking like they're continuing to be strong as we kind of head into the new year. On the other end of the spectrum, you know, again, fairly self-evident sort of leisure. So travel, airlines, cruise lines, hotels. You know, QSR took a hit. And I think for the QSR that needs you in the restaurant, because it's sort of a step up. Now a lot of the QSR are clearly reinventing their entire models to make it, you know, much more order in, much more touchless, et cetera. But those were hard hit. And you know, until people can be in the world again, you called it, I think, what, social gathering on one of your podcasts. So it's like, until we can social gather, you know, that's going to remain the case. And then I think other watchouts are, you know, supply chain, if what's been going on, you know, spikes in certain places and supply chain hits a particular industry or client sector, you know, that's a layer of uncertainty. And then for us, although it's a small part of the portfolio, experiential and event businesses, you know, got hit really hard, right? So you're locked down. And if you're helping clients with their, you know, trade shows or with their sampling or with, you know, sports marketing, et cetera. So we don't figure that comes back at least until the back half of the year, you know? So it's sort of odd. I think for us, it's not like we feel good and confident in the bits we can control. We're just being sort of realistic about the bits we can't. Our CFO has a funny saying. I should, you know, Ellen sort of says, it's not if, but when. You should probably have that put on a t-shirt, right? I think what we're seeing kind of in terms of what's working and what's not is pretty consistent with, you know, the more digital part of the businesses. Media kind of bounced back nicely. Our healthcare-focused practices with the specialties as well as, you know, inside the agencies, you know, that performed well. No new news. Okay. That's helpful. Anything else you would add? You know, one of the things that came out of your earnings call, I think was from investors anyway, was around your sort of framing of 2021 as being a year where IPG delivers industry growth. And as we've discussed earlier, we've been spoiled seeing kind of pretty consistent outperformance. Anything you would add beyond just the comp is obviously harder for you guys. Anything else you would add to that comment to flesh it out? No, I mean, look, the comp is like a lot harder, harder. And I guess what I mean by that is the variance in performance inside of the sector in 2020 was kind of wider than it had been in a long time, right? Yeah, sure. Between us at the top and kind of, you know, the competitor who was on the other end, there was like a seven percentage point gap, so that's bigger than usual and then you stack that on top of, as you said, a number of years of outperformance and a lot of, you know, I think challenge visibility. I think, you know, we're just trying to be kind of just trying to be real. I think, look, the other thing that's hard to tell is, you know, for how long is growth going to be available this year, right, so like, you know, if the world opens up and you get six months to go out and perform, then if you feel like you've got strong assets and you can outperform, then you are more confident that you can really show that out. If new business, you know, there should be some pent-up demand for reviews. If that kicks off, you know, in September, then it really probably doesn't even impact this year. So it's kind of like, when does it take hold? How much of an impact can we make? But it's not indicative of any, you know, any broad, you know, change in perspective about, you know, how we feel about our relative position. Got it. And fair to say you think media probably outperforms kind of the marketing services side, just given everything we've seen in 2020 and heading into this year? Look, yeah, I think so, and I think it has for a number of years because it's kind of where, you know, it's where you get the most signal in, right? So big client budgets, you know, a lot of focus on, can you get me more rigor around and specificity around, you know, digital media kind of fragments. There's a lot of ways to have precision. So, you know, and then all of that starts coming back to you and you start going, oh, this is a really rich place to. So that's why I think it's where the evolution of the business has been kind of most pronounced, and I think all of those, you know, it's kind of a virtuous circle at that point. And so I think that, you know, that's a space that should continue to be, you know, and so how do we time more of what we do in the rest of the portfolio to those kinds of, you know, tools or processes or that data stream? So yeah, I think you're absolutely, yeah, that's kind of going to keep being, I think, the outperform. Okay. We've got about five minutes left, so I want to crank through a few more, at least that I think are worth hitting on. First, it's been about two and a half years since you bought Acxiom. I imagine that business helped last year, just knowing the business model a little bit. But I'm just curious if you had an update on how the assets have been integrated into IPG and whether the opportunities you guys called out at the time, particularly on the revenue side, you know, have been something you've been able to capture. I realize with the pandemic may have impacted your plans there. But any update on that, given the size of the acquisition was obviously pretty material? Yeah. I mean, so the integration is done and we feel really good about that. And that's really important, by the way, obviously, because in a space where one of the things, you know, they brought a number of things. So they brought a big, really powerful kind of foundational data set. And it's really where we start, right? We then build on top of that, whether it's, you know, client first-party data, whether it's that gives us a real clear line of sight into where there are gaps in client data. But, you know, to handle data at scale really securely and really thoughtfully is really important. So I think that, you know, their performance has been, as we said, solid and we're comfortable with it. We like that it's also a chunk of our revenue that is on a kind of long-term retained client contract, which is obviously, again, different. We were talking earlier about aspirationally wanting to diversify the revenue stream. Then what I tried to do, which was, you know, which is different, you know, on that, you know, our call just a little while ago, was to try to sort of kind of dig a little deeper and show how, you know, Acxiom and then Kinesso, which we've built that sits on top of that, is playing a part in so much of the client engagement. You know, it's kind of at the table with all the top 20 clients. It's kind of showing up in all of our, you know, new business of any scale. We're also trying to sort out, you know, how do we take, how do we kind of cross-sell and help the agencies take that data or that data management expertise and sort of bake it into things that they do already and turn that into product that they can sell to clients. You know, I think overall, the only thing that we, you know, mentioned that we were going to get to that is still a to-be-gotten in a meaningful way. I think it's both because integration, you want to make sure you get right, because then getting, you know, the asset to work with more and more of the company, you know, requires a lot of work, you know, was kind of international. We talked about sort of, you know, their footprint is very domestic. That opportunity is still very much untapped. Okay. And then maybe just a couple to wrap up on the numbers. You know, you guys obviously, it's going to be a very interesting year from a comp point of view. You have a sense of what the sort of shape of the year looks like in terms of organic growth, just given the comps? Do we expect Q2 to be the peak quarter for growth and then it sort of fades from there? Anything you would want to call out at this point? I mean, look, you know, we're not prone to, we don't manage it on a quarter-to-quarter basis, and so we don't tend to focus on it that way or comment. I think the comp clearly eases pretty dramatically in Q2, so that's kind of a logical point at which to assess, you know, are we starting to turn the corner, right, and then, you know, I think other than that, you know, restructuring, you know, we're going to stay really focused on, you know, the commitment that we made that there would be, you know, a sizable long-term kind of basically, you know, the cost savings that are permanent, so I think that that's a focus, but look, I would say Q2 is a really important point at which to sort of see kind of where we stand. And then, you know, once we sort of head into Q3, we sort of see where the world is. And if the world is starting to kind of come out of its shell, we're all back in the world, then some of the project and marketing services-based part of the business, I think, starts to be able to contribute to growth. And so, you know, that's sort of. Yeah. But I can't, yeah, kind of. Hard to say. I realize. Phasing, you know, as we said, we're just, you know, the visibility is such that we just figure it's a bit of a fool's errand. And then lastly, just, you know, you mentioned the cost savings. You and Ellen and the team have identified $160 million of annualized cost savings from restructuring last year. I think margins will be up nicely in 2021. It does seem like, at least where consensus is, that there's a lot of that $160 million or some of that $160 million may be more in 2022. I'm wondering if you think this is a multi-year or a two-year process to sort of fully capture that. Is that kind of how we should think about it? Look, I think there's incremental profitability just because we've shown that we can, you know, that we can grow profitability independent of, you know, the restructuring. Then there's a lot of the restructuring savings this year and the degree to which it then, to your point, becomes a multi-year process, you know, has to do with the lease accounting and with actions that we've already taken, but then when sub-leases take place, and therefore, to your point, you know, with growth, we can increase profitability. The restructuring was a rethink of core operations and a sort of streamlining of how we deliver core services, so that is going to be evident kind of, you know, we in perpetuity, permanent savings, and then on the real estate, there's benefit in 2021 and benefit in 2022, so I think that's kind of stripping it out. Got it. I couldn't let you go without touching on lease accounting. I know that was important to cover. Other people know a lot more about it than you and I ever will. Right. Exactly. Well, listen, thanks so much for your time this morning. It was great to see you and all the best for the rest of the year. So thank you, Philippe. Thanks for having me. All right. Okay, everybody. Thanks so much for joining us.