Great. Good afternoon, everyone. Thanks for joining this session. My name is Lisa Yang, and I cover the European media and internet space at Goldman. It's a great pleasure to have with me today Philippe Krakowsky, CEO of Interpublic. So maybe to start off, Philippe, this is your second year as CEO of IPG. You know, you've been through COVID, the rebound, and this year you know many macro issues, the war. And it's quite surprising that IPG continues to surprise to the upside. So I'm just wondering, like you know, how would you explain such a strength, not only this year but also basically since really since COVID and actually even prior to that, and how you're thinking about your strategic priorities in this challenging macro backdrop? Yeah. Spectacular timing, huh? Yeah. I'm not sure that the current macro necessarily changes our priorities in that performance that you're talking about, you know, leading up to and over the course of these next couple of years does sync up with what we see as longer-term trends that are gonna persist and that, you know, we've demonstrated can result in, you know, the kind of growth that we've posted that clearly is an outlier to the good relative to the category. So I don't know that there are any kind of major strategic shifts that come out of it. I mean, I think that, you know, pandemic, in terms of running the business, when it's a business where clearly kind of there's an IP component and a, you know, a professional services business, so there's been a lot of focus on looking after our people around the world. And then the acceleration of trends around, you know, consumer behavior and digital channels and consumption and sharing of information, again, in ways that are enabled by tech, those sync up with bets that we've made going back a long ways around, you know, not siloing digital and around getting kind of data in a tech layer connected into our service layer. So I don't think you're gonna, you know, we're not gonna, you know, sort of announce we're making toasters or rocket ships anytime soon. I think we're gonna sort of stay the course. Obviously, you know, the investors are all focused about, you know, the near-term outlook, and we keep getting questions on why not seeing anything, why not seeing anything yet, given what's happening in the macro. Yeah, maybe you just tell us, like, what you're actually seeing in Q3 so far, 'cause your guidance actually implies quite a big deceleration in the second half. Have you seen that happening already? But I don't think. I mean, I think again, the guidance we talked a bit about it on the earnings call, right? I mean, I think that when you think about what 2021 was and therefore a, you know, a comp that's at 2015 and 2012 Q3, Q4, or that compounds over a couple-year period, again, you know, at I think 11 for Q3, it isn't a function of the broader macro. I think that's just, you know, those comps would lead you to understand that there was gonna be some deceleration. What are we seeing in Q3? We're not seeing anything in Q3 that changes our commitment to the target that we put out for the year. Again, on the call, whatever it was, I don't know, a month and a half ago, you know, spoke to the fact that some clients were asking us to think about contingencies, that there was clearly an understanding on the part of some clients that they wanted to scenario plan for what they needed to do in the event of sort of, you know, a macro that degenerated. So I think that there's probably more of those kinds of conversations going on. Right. And they're about how do I prioritize my KPIs? If I'm gonna do that, what does that do to my, you know, to my mix in terms of, you know, media investment or, you know, different kinds of marketing activity, so I think that one of our operators said, you know, kind of slightly choppier waters. That's about what we're seeing. Right. But that doesn't lead us to conclude that, you know, anything's changed for our outlook for the year. I'm just curious, you know, you said you're seeing more clients, you know, coming with, you know, contingency plans. Like, are you seeing like, you know, what are the sectors or geographies where you tend to see more of those sort of contingency plans? And what are these contingency plans actually about? Like, you know, is it about cutting spending, you know, in Q4 into next year? Like, you know, where, where, you know, if you could maybe just share a bit more about. We've got so many clients, and we're in so many places that it's very, I mean, it's difficult to say, "Hey, it's this, not that." I think it is about, you know, just thinking through what would trade-offs be if there's a moment in time at which they choose to, you know, shift out of certain media, if they wanna shift to certain kinds of activity that's focused on, like I said, some KPIs maybe that are a little bit less way up in the funnel or a little bit further out on the horizon. I think that Europe is definitely a place where, you know, there's been more of that sort of uncertainty or concern and then a lot of it just gets very, very specific to a client's business and/or, you know, the degree to which they're connected to things that are disrupting the overall macro. Right. You know, if interest rates have a greater impact on your business, by definition, you're gonna wanna be thinking much more proactively about what happens if you get to a point where you're going to trim or you're going to change the focus. Obviously, you've been through several recessions. In prior recessions, like, when you came to those discussions around, like, you know, contingency plans, like, you know, how long, how much of a heads-up do they give you in terms of, you know, putting these actions into plan? Is it, like, a month, two months, or, you know, it doesn't happen overnight in terms of when they actually come to decide? Does 2020 qualify as a recession? I mean, 'cause that, that was really quick, right? Yeah. Everybody was like, "Yikes. I gotta do something. I gotta do it now." But I don't think that's the norm. Yeah. And then the last time was a long time ago. And I think what's different about what we had, you know, kind of 2008, 2009 is that there were far fewer levers clients could pull, and they were far you know, the decisions, the tools you had at your disposal were much more basic and rudimentary. And so it's not a question of people saying, "Hey, let's have those discussions, and then let's do something about it now." I think it's a question of people saying, "Let's have those discussions so that we can be clear on what we will do in the event of." And again, for clients, the point at which they conclude that something needs to happen, you know, is different based on a bunch of things. Right. And I think on the Q2 call, you talked also about some weakness in, like, speculative areas, I think, project work. What are you seeing currently in terms of both areas? I mean, it's odd 'cause I'm not sure that I think there's a little disconnect. I think when we spoke to that, I think it was very specific to two agencies that happened to be very active in sort of digital innovation work and that had a lot of client activity in 2021 in the crypto space. Right. So I think that, you know, that isn't something that I think I can sort of extrapolate to the rest of the portfolio. We haven't seen a drop-off in project work. It would be a place, along with digital media, where, you know, you could see people say, "Oh, that's a relatively, you know, it's a lever that one can trip, more quickly than not." But I think that, you know, we'll see in the fourth quarter whether that's something marketers feel the need to do and back to, you know, maybe by the nature of, you know, the industry and my competitive environment or in a few, you know, markets if the macroeconomic situation's gotten, you know, more challenging. Right. And following up on this again, like, you know, if you look across your portfolio in different segments, where you operate, like, which segments you would call out as being most cyclical, most defensive, and what's the typical contract length across your different segments, like, which will give you, I think, maybe more visibility into next year? You know, and to the question you asked earlier, you know, about where we would have been the last time there was a, you know, recession that was not whatever 2020 was, so clearly, the data business would not have been an exception, you know, wasn't something that was in the portfolio then. And those are meaningfully longer-term. Those are multi-year clients, contracts, excuse me. Mm-hmm. So first-party data management is one. I think that the way in which we've connected that into our media offering, you know, where you've got large ARR relationships, again, is a place where, you know, nothing is immune if the world gets really, really sick. I guess one shouldn't use metaphors of that nature as we're still in pandemic. But so those two, I think, would be more robust. Where are we to go into kind of a really difficult macro period? I think our healthcare business is quite large. And again, the nature of what we do with clients there and the degree to which we bring know-how about their products, which is hard to replicate, and the degree in which the nature of what they're engaging with consumers about makes it much harder to say, "You know what? I'm gonna take six months off 'cause I gotta save a little money, but let's not talk about your diabetes or how we can help you with something that is actually pretty, you know, fundamental." So I think those are areas that we believe will hold up better. And then, I mean, you know, length of contract varies widely, but, those are all areas where you've got longer-term at the advertising agencies, the larger-scale relationships with clients, which are ARR relationships, are also longer-term, although they can be terminated, you know, in a 90 day- 120 day period. And then other parts of the business do a lot more project work. Right. Very helpful. Thank you. You've changed your signal to disclosure sort of, recently. I mean, clearly, I guess, to also help, like, investors better understand also different parts of the business and dynamics. Could you maybe talk about, like, you know, whether your internal organization or your go-to-market strategy has changed to reflect that change, or what was the rationale behind that? I mean, no. I think, as I said at the outset, I mean, our strategy, and the way in which we've been developing the company to try to sort of move upstream with clients and be able to solve a broader range of, you know, we're. I don't know. We're obviously boring them to tears. But, you know, that isn't changing. It's funny. Like, they're going out that door. That's funny. They're coming in this door, but the disclosure was, I think, just a function of the fact the business has changed a lot. The three segments don't represent how we run the business in the sense that when we deliver for clients, we always do it, you know, with the client's needs first and foremost. So we'll pull from any number of places. But with, you know, having not had a change in our sector disclosure for a very long time and given how much the industry has changed and knowing that there are things like, you know, data and technology, which infuse, you know, more of the portfolio where we can do different kinds of work with clients that is also more performance-based, that has an IP component to it, you know, we wanted to take a step in giving people a better sense of what's in the portfolio more than how it comes together or how it works. And so, in a sense, that meant, okay, you know, you know that there's a sizable data asset. You know that media's been where we've made that happen. Give you kind of range and bearing what that represents with some of the digital agencies. You know, the second segment has the, quote, "traditional agencies," which use a lot of what Acxiom does in how they are solving problems for clients, and then healthcare, which is quite sizable within that segment. You're never gonna be able to capture a business that's this complicated and this decentralized with, you know, I mean, we can't do 12. We can't do six, and then I think there's a competitive disadvantage if we do, you know, five, six, seven, but I think we wanted to be transparent about how the business is evolving and just give you more information to work with. So how do you think about the organic growth rate in the longer term for each of these segments? There are puts and calls inside each segment, so I think I would, you know, if I were using it, I would say it's interesting that there's scale in the first two segments. I think that's interesting, and then it's interesting that the segment that has the most data baked into it is more profitable. Mm-hmm. And that's a thing that one would wanna see extend to more of the portfolio. But on the growth side, there's the small segment is doing well now in part because Experiential and Event got shut down in 2020. Mm-hmm. And therefore, the comps are gonna be modest for a period of time. So that kinda throws you off. And then what's in the other two, you know, is not there, you know, I mean, they're analogous businesses, but the scale isn't analogous. And so I think that, you know, I like that they're all within a healthy range. I think that's another thing to keep an eye on, you know. Right. And I'm also curious why, in this time of inflation, I'm sure you're also seeing, you know, wage inflation, etc. Like, how are you passing on to your customers? And is there any sort of, you know, inflation baked into sort of your organic growth guide, or have you seen any, you know, benefit from that in H1? I mean, I would, it's not a question we've had reason to ask for years, right? So I don't see inflation. As there's not a correlation between inflation and our growth. There hasn't been. What we have is a pretty significant number of client contracts that do contemplate. Mm-hmm. The ability to have a discussion with clients around that cost being passed along, so it's very, very early on in looking into what that will look like. You know, I think it gives us some comfort that if there's a long-term period during which inflation is with us, there's the opportunity for us. Right. But I don't think that I can say to you, "It works this way. It doesn't work this way," because it hasn't actually been something that is really called upon when you think about we've come out of a sort of long-term near-zero inflation period for. Mm-hmm. Years and years, right? But I mean, it's there. But, we're all beginning to see how those conversations evolve. Right. I'm also curious to hear how you're thinking about your new business performance, and do you see any major opportunities or risk into the rest of the year or next year? And also, when you think about the last few years, it feels like every three years you have a big pickup in reviews or media reviews or whatever you wanna call it. And we haven't seen actually much activity in that space. Is that because you're more proactive at trying to pitch to your clients so that they don't go into that review process, or do you think there could be a pickup in review activity over the next 12 to 18 months? Hard to say. I guess I can answer for us, and then I can speculate for the industry. But, when you think about the last couple of years for us, I think we've been clear that a lot of our growth is coming with existing clients. Mm-hmm. By taking this broader range of capabilities or solutions to those clients, and we're very comfortable with the fact that that's a way we grow. Pretty sizable shifts in the healthcare and pharma space tend to happen pretty quietly again, also just, I think, a function of, you know, the cultures of those clients. From where we sit, we're net new business positive, I think, the last two, three-plus years, this year included. It's an important component of our growth. I think it's important to us because, you know, like, you know, you know, with Nike or, you know, Prudential, a couple of recent pretty sizable wins. Mm-hmm. You need to know that your agencies, that your companies, you know, are competitive because the competitive landscape is always evolving. I haven't had us do a ton of analysis. I mean, my gut says that it's a modestly smaller part of our overall growth than it would have been five years ago. I mean, the palooza thing, everybody thought there would be a pretty dramatic uptick kinda coming out of the pandemic. Mm-hmm. The pandemic was just gonna dissuade clients from going through that level of, you know, disruption while everybody was. I don't think we've seen a ton of pickup, so sort of TBD in terms of what's out there. You know, we know of one or two things that are kind of about to come on stream. You know, you'd, I think, you tend to see somewhere clients have been, you know, with a partner for a meaningful enough period of time that it almost becomes sort of a hygiene thing. But it does seem like, at a macro level across the industry, it's not, like, super busy. Right. Very interesting. Thank you. Maybe we can talk about margins. So you've raised your organic growth guidance a couple of times this year, but you decided not to change your, your margin guidance. So could you maybe go through, like, the rationale behind it? Is that you're seeing greater cost pressure? Is that conservatism, reinvestment? It's funny. In one of our earlier sessions, somebody referred to this for us as a more, you know, on a margin basis, as a digestion year. Like, I hadn't eaten at the time, so it was like, so, you know, our trajectory coming from where we were some time ago, but even, you know, three, four years ago, you know, you've seen very significant increase in margin, which we, you know, see as sustainable and we think we can actually build on, independent of, you know, whatever hell breaks loose, you know, if there is a recession, but I do think that it's a year in which we were basically kinda consolidating three or four years of growth. I think that there are just tons of ins and outs if you think about how volatile things have been during the pandemic, where, you know, everything locks down in 2020, everything opens up, and then some in 2021. You've got, you know, some wage inflation, which, you know, we feel is very manageable. But, you know, these puts and takes on the costs that are very anomalous. So I think for us, it was consolidate gains, acknowledge that there's some ins and outs, and then do some, as you said, investment, so that we can kinda keep building in the areas where we've made a lot of progress and where we're well-positioned, you know, around more precise, more accountable, you know, more tech-dependent or digital competencies. So that's, I think for us, that's what explains that. Right. But in the out years, you know, we've been really clear. Ellen is here somewhere. So our CFO and I are there. She's not. There she is. You know, that we, we see with, you know, over time, with revenue growth, we can grow margins. And then on top of that, with new services that are more data-enabled and precise and, and are kinda higher value services, we believe we can grow margins. So this is just to kinda catch your breath here. Do you see a ceiling for your margins over time or, like, for the type of value-added services, you know, more data-embedded? Like, what do you think is the sustainable rate of margin you're, you're targeting over time? Funny 'cause, two things come to mind. On, on another one of our meetings today, somebody said that, like, "So do margins grow forever?" I was like, "Wow, does anything go on forever?" And then I'm thinking back to when Sorrell used to say, "A point a year in perpetuity," which was, like, probably got him killed when he went back to his agencies. But, yeah, from where we sit, in a world in which we can do better than GDP growth and GDP goes back to something kinda normal, and then knowing that, you know, as I said, we have one segment that's meaningfully more profitable than the others. And what we're trying to do is take more of that kind of ways of working tools to the rest of the portfolio. And the rest of the portfolio is still a pretty sizable chunk of our overall revenue. I mean, we definitely see margin expansion as a multi-year opportunity. I'm not gonna go, "And then it caps out at, you know, at such and such in year six, seven, or eight." But yeah, we think that it we can compound that. Right. And speaking more about the near term, like, are you really starting to take any sort of precautionary measures in terms of costs just to anticipate a potential slowdown, or you still think there's a lot of growth opportunity? You wouldn't wanna do that 'cause that would potentially impede your, your future growth? And what are the levers you have in the business? We never hire a head of revenue. I mean, I think, you know, by definition, there's something to be said for that. I think you saw, you know, that we were clear that, you know, we were sort of getting too caught up, in terms of finding the talent that we needed given last year's very explosive growth, so and then I think the last piece is I think that the skill sets that you're bringing in and the talent that you're bringing in now aren't directly duplicative to talent that you have because you've got a portfolio that's got, you know, assets that are disparate in terms of are they, you know, much more developed digitally, much kind of more able to work in ways that are kind of sort of at the leading edge. So we haven't felt the need to kinda go out and, you know, kind of proactively. There's lots of levers that help us. So if to the point of last real recession, you know, kinda 2008 or 2009, our you know, kind of our key cost drivers, temp labor incentives went down more in that pretty precipitous recession. They went down further and in line with the revenue dip, right? And so there's something built into the model that will help us. And then, you know, we look hard at how we can kinda do sort of to ourselves what we're helping clients with. So whether that's sort of business transformation, our own processes, and kinda what can we automate sort of nearshore, some, you know, kind of offshore. So we see lots of ways in which if the environment were to start showing up, we could clearly position ourselves to. Again, I mean, look, if it's, it's dramatic enough macro, I don't know that, you know, anybody is entirely able to get out of harm's way, but. Right. We might have time for a bit of questions, but, you know, before we turn on to the audience, I'm just curious to hear your thoughts on what's happening in the broader media landscape. Obviously, there's increased complexity, fragmentation. A lot of people are talking about the increased inventory you're likely to get in the A-book space, especially with, you know, Netflix and, and Disney+. So, so, so do you think the market will be able to absorb all that additional inventory? What do you think is gonna happen to, like, prices? What are the major share shifts, like, you'd still expect to happen over the next sort of 12, 12 months- 18 months? I mean, it's always I think, like any marketplace, it's always kinda supply and demand driven, right? And so, I mean, what's slightly odd about it is that marketers are called upon to commit long-term to linear TV, which, you know, may or may not have some of the qualities. I mean, it clearly has reach, which is important. You know, as there's more digital TV inventory, it'll be interesting to see what that does to maybe finally shake that model out. One of the questions that came up on our last session, you know, had to do with does radio, does outdoor, as it gets more truly digital-like with kind of more data to it, better addressability, does that get, you know, more share commensurate with where and how people are spending time with it? So yeah, I think that the media ecosystem is gonna keep being transformed. I think that the changes that we're seeing in digital proper are, you know, partly Apple hiving off some of, you know, what's going on, partly TikTok making such, you know, dramatic inroads at the expense of, you know, some of the kind of established players. But it's gonna get, I think, you know, and then, as you said, the streamers are getting some. But measurement's gonna be super important because, like, retail media are gonna be a big part of this story too. Mm-hmm. And then if you're a client and you're sorting out where and how do I prioritize or invest when I've now got any number of ways that allow me to be precise and to address, but maybe not to assess the impact of them, I think we'll all benefit as there's kinda more clarity around a couple or three universal kinda currencies that. Right. Sort of give us some understanding of value. I mean, our investment people right now would tell you that even with the changes that we're seeing at this point, when they then do kinda relative, like, the ROI across these various sort of formats, channels, distributed, it isn't changing enough yet. Mm-hmm. That they're advocating for some, you know, new strategy that's way out of left field. You know, you've got clients who are still spending 40% in digital who are CPG clients who should be spending 60%. That's still the case. Right. You've got other clients who are way, you know, who've indexed well into digital channels going back a couple years by the nature of their business models. They're gonna stay where they are. But yeah, I mean, I think everybody's looking forward to a time when we can be more sort of where the whole thing can be saner. Any question in the audience? Actually, there's a mic. We'll come over to you. Is there a mic now? Yeah. Yeah. Awesome. You can just project. Yeah. I can be loud. Oh, no. We're, we're streaming, so. Oh, I see. Yeah. Yeah. No worries. Great. Thank you. My question's around sort of the continued shift to the cookieless world. We've seen Apple, you know, update their privacy settings. Mm-hmm. Google has decided to push this out to 2024 now. Yep. Just thoughts on how this impacts your clients, impacts the industry, just an overview of what you're seeing or how you guys are preparing for this, if Google eventually, you know, flips the switch and goes that way. I mean, I think that we thought about this some time ago, which is obviously why we ended up, you know, kinda breaking the mold in terms of we'd built kind of most of the capabilities in-house for a long time. Acxiom was a departure for us, precisely because we thought that without the scale that that provides when it comes to sort of first-party data management and the handling of PII, we were gonna be at a disadvantage. It's interesting because people often say it's about, quote, kinda owning data. I actually think it's about knowing how to do things with first-party data, right? What is gonna dramatically change? I mean, lots and lots of conversations with our clients go to, how do I take control over my own data? How do I build a proprietary ID graph? And how do I show up in such a way as to kind of retain or take some measure of control over my destiny kinda in this world as it's changing? So I think, you know, lots of people are kinda focused on the right questions. And you're gonna have kind of to live in a bunch of different realities. Right? You're gonna have to be able to work with and get the benefit of what massive platform walled gardens get you as a marketer. You're gonna have to be present in and able to play in the open web and maybe find some like-minded, you know, clients with whom you can sort of do data exchange so that you can actually sort of plus up the value of your own data so that you can be, you know, successful there. You're gonna have to sort of figure out how you incorporate retail media into the mix, so I think, broadly speaking, you know, the pivot to whatever that world looks like is already pretty well underway. I mean, we've been working with clients on those questions for a couple years now. Sounds like it's an opportunity to access that and grow with how you solve this problem. It has been, and we think it will continue to be. Yeah. And actually, another question over there. If you think about your data capabilities over the next five years, which parts of it do you feel most like the competitors are gonna catch up, and which bits do you think you just can't see a way in which they're gonna be able to catch you up? Interesting. I'm just trying to, you know, there's a lot to I mean, A, define competitors, in the sense that, you know, if it's just the, the sort of five holding companies, you already have sort of seen a degree to which, you know, three have, two don't, you know, an asset, a data asset of a certain kind. As the shift that we're talking about takes place and it goes from just being about advertising technology to being about other platforms and marketing technology, I think some people will all of a sudden come into the frame as potential competitors. That'll change my answer. And then it gets really, really specific around services and solutions and, kinda use cases, whether that's in the media space, whether that's, you know, how it gets incorporated into how we do kinda audience not audience segmentation, but understanding audiences and have that inform, the creative work that we do, or bake it into, you know, when we've got, you know, experiential and event businesses where you're interacting with people, you're activating in the real world, it's a huge opportunity to take data on board in interesting ways. So it's hard for me to kinda tell you that, you know, these three ways, but not these other ways. I mean, you know, I think what it begins to do is you need to constantly, you know, go to what's 2.0, what's 3.0 of this combination of service and tech. Right? So, you know, putting together our healthcare assets, given that we've built really strong ones over many years, is a 2.0 of something where we're ahead, but we wanna stay ahead. You know, what will that look like around what we do with data and media? You know, our competitors have different geographic strengths. They have different, in the case even of the ones that have, you know, a data asset, you know, they have different mix across all the capabilities that we bring to clients. So, I mean, that's like a two-day answer with a lot of thought and probably not one that doesn't give away competitive advantage if I put it out into the world. Unfortunately, we're running out of time. So thank you very much again, Philippe, for. Absolutely. Being with us. Absolutely. Fantastic. Thank you. Thank you.