All right, great. We'll get started. My name is David Karnovsky. I cover media, entertainment, and advertising at J.P. Morgan. Very happy to have back at the conference, Philippe Krakowsky, CEO, Interpublic Group of Companies. Philippe, thanks for being here. Thank you. Karnovsky and Krakowsky. Yes. I don't know. We have to start a law firm. Skadden from. So, Philippe, just to kick things off, what do you see as the larger growth story for the agency holding company space right now? And how are you positioning IPG to take advantage of that story? I think the growth story for us as an industry has actually been pretty consistent for, you know, going back some time now, probably accelerated by the pandemic. But I think if you look at the way in which technology has impacted pretty much everything about the way that information moves around, people relate to each other, they get information, obviously, how they relate to companies, and for our clients, you know, the options or the, the tools that that gives us to reach them in ways that are increasingly precise and increasingly timely in terms of wherever somebody is on a journey of either interacting with a company, discovering a brand, being introduced to sort of a product or a product category. So, you know, the opportunity that that represents, I think, is, is only increasing. You had that evident in, you know, the ad tech ecosystem initially. Now it's sort of happening across a broader range of marketing technology and not just media, but now content and creative work as well, or what traditionally has been called creative work. So I don't see anything that deviates from that trajectory, which has been largely good for the industry and again, largely good for us as a company. Got it. So in your last earnings call, you expressed confidence in the long-term performance for media, healthcare, PR, and experiential. So I thought maybe you could unpack a bit what informs your positive view for these disciplines. Sure. Over time, you know, for many folks in the room who follow us, you know that the drivers of our growth, both top and bottom line, you know, media has been very accretive to those results, and that's the place where we've probably gone the furthest in terms of baking in that technology layer, data, initially through our own stack, going back a number of years now with Acxiom. So I think that we continue to think that a business where you've got a lot of information, you can use that to make more sophisticated decisions and get to better outcomes for your clients, continues to have, you know, a lot of opportunity and a lot of upside. I think, healthcare is maybe just a bit different in that what you have there is a skill set that goes much deeper and has a level of specialization. When you look at... You know, we probably have the largest healthcare marketing group in the sector, and among that group, you've got hundreds, if not, you know, over a thousand people, all of whom have very specialized healthcare expertise. They're pharmacists, they're nurses, they're nutritionists, they're folks with, you know, doctorates in various component parts of the science. So again, that's a place where, you know, we see more sophistication, continued need, a client sector that has come through the pandemic, you know, much, you know, well regarded, sort of in terms of broader perception, maybe a slightly, you know, less robust pipeline than we would have seen a couple of years ago. But again, that's a space we see as strong. And the last two that you mentioned, I think PR and engagement and experiential, have to do with... It's difficult to engage with consumers, with humans, at a, you know, at a personal level, in real life, and where and when those companies that we've got, whether it's PR around influencer and social, or whether it's the experiential agencies that actually, you know, put brands into the real world and interact with consumers, often, you know, around things that have to do with culture, things that people feel strongly enough about, that they're out in the world doing. Those all continue to, you know, have strong demand signals kind of across the board. Your commentary on the healthcare drug pipeline, is that just a function of it accelerating over the COVID period and now in fact? No, I think it's cyclical. I mean, I think, I think that, you know, if you've been looking at that category over a lot of years, it builds up, you know, it builds up in different ways, as you know, whether it's the R&D itself, whether it's M&A. So I was just saying, you know, it's, it's not something that puts us off at all on the long-term health of it. But to your point, coming through COVID, clearly some things accelerated. Now they're normalizing. Got it. Creative has been a laggard that's industry-wide, really, for some time now. There does, however, appear to be an opportunity to transform that business with the integration of data, AI, renegotiated comp models, and so on. So what's your vision for how creative fits into your long-term plan? Where are we on that path? Look, I think in a world in which over these last 10 years, clients, understandably, marketers, focused on precision, increased, you know, the ability to measure and to see when and how, whether it's messages or whether it's dollars that are put into the ecosystem are having some kind of impact. A very traditional approach to creative, as you said, you know, began to industry-wide suffer to some degree. I think what's exciting about where we sit now is that with some of the foundational pieces of the company that we've put in place, as have some of our competitors, you begin to have the ability to be more precise and to apply some of the same processes or, you talked about, you know, maybe outcome-based compensation in that space. We see it a lot in media, and then obviously, with the advent of the word we haven't said for all of seven minutes here, which is AI. But with Gen AI and what that begins to allow us to do, in terms of the scale of versioning that can be done, the, again, customization or personalization of the messages, 'cause we could clearly personalize the delivery of those messages. So I think we're beginning to see some opportunity. I think that what you need is, brands are still powerful. Stories and narratives are still how we all make meaning, so clients understand that a big idea in the service of a brand can be very powerful. You just have to connect it into this bigger system. When creative is connected to these other sort of component parts of what a modern marketing campaign program is made up of, you know, I think that begins to give it more prominence again, or the ability to be much more relevant again. Just following up on that point, you've been on earnings calls, kind of singling out or not singling out. You've highlighted at times FCB as an agency that's sort of at the forefront of that. Maybe you can just speak to that. Is there best practices there that then can be applied across the organization? Sure. I mean, I think, I think FCB has been, has sort of, for us, been indicative of what's possible in that space because it is a, quote-unquote, "traditional" ad agency, and that leadership team was very early to... I think just by the nature of, you know, where they've come from, where they are in terms of their career trajectory, they're very, very comfortable with digital channels. They really understand media. They get the data piece of it. So they use data and what we call audience-led thinking. So every conversation is led with some form of data and segmentation work, which then scales or identifies the business opportunity. That then leads to the insights, that then lead to the communications work. So you have got a creative ad agency. What it's doing is actually much more integrated, and that's prior, as I said, the part where you get to, you know, start using the technology as a tool to then, you know, sort of augment the creative piece of it. Got it. All right, so you teed me up for the AI question. Here it comes. All right, so you've been investing in Gen AI. You've made announcements on this front, including a partnership with Adobe. There seems to be more to do, though, before we see the impact of this work. I don't know if that's about brand safety, protecting client data. Maybe you could give us a rundown of your vision for integrating AI broadly across the IPG, and what should we know about your strategy relative to the competition? Well, I mean, I think that it's, AI has been a part of the business for some time in certain parts of the business, right? And so, again, if you think about what Acxiom does with one of the most powerful data assets going, where we've got immense amounts of very high-quality data, in many ways unrivaled outside of walled gardens, you, you clearly use machine learning to do a lot of the analytics work, the modeling, the kind of predictive, activity that you use to help clients, turn that data into value. Inside of media, again, we've, we've been using AI and, and machine learning for some time. I think that I can mostly speak for me or for our company, 'cause when you say, you know, competitors, harder to tell in that, you know, we're focused on solving for clients, and then you get the sort of the big announcements that say, we're, you know, investing in X, we're... I mean, I think my sense is range and bearing. It's unlikely that you're gonna see disproportionate anybody is meaningfully ahead or behind in terms of how they're investing in this. I think that for us, in a world where we've got these now foundational layers to the company, you've got a data layer, you've got a thin layer, but an engineering or a tech layer that allows as much of the company as we can put on stream to plug into the data and activate it, use it in their business. Then you've got what we've got inside of Mediabrands at Kinesso, which is activation of that data into, again, largely the digital media ecosystem. And now content production, so automation, and then thinking about the content supply chain and the ways AI impacts that, that's really the place we're most focused now, and that's where we think there's an unlock. Because then, parts of the business that either have been, you know, lagging, to your point, across the industry, or that have been more challenged in plugging into these foundational layers, you know, that becomes the unlock for us. I just want to think about digital and when that ramped a lot in the early 2010s, there were decisions made at certain agencies that allowed them to then went on organic 5, 6 years later. Is Gen AI similar in that decisions made now will really pay off, you know? Well, I mean, at the time, I mean, it's funny 'cause I remember that well, too. You know, there was a degree to which you had something somewhat analogous. You had a couple other competitors, you know, making very significant, very public investments, doing a lot of M&A. You had, you know, a degree to which, for some folks, it was, it was bright and shiny enough that it stayed in silos, and we always said: We've got to bake it into every component part of the business. Then, to your point, for a number of years after that, it did show up very positively in our organic results. So I think it's fair to say, as you just did, that, you know, we're gonna, we're going to see it play out, as much in when and how clients choose to partner with any one of us, as in anything that, you know, you kind of wave your arms around a lot. Everybody's got, you know... Again, when I look across the spectrum, it's, you know, the major, major players in the space, whether that's NVIDIA, whether that's OpenAI and Microsoft, whether that's... All of us are playing with them, and all of us have lots going on, where we're either licensing or partnering in the creation of use cases, or I don't think that's necessarily where the differentiation is gonna happen. It's how you actually incorporate it into your business. Yeah. and use it for clients. Okay. Yeah. That's a good segue to structure. So in the past, IPG has always emphasized an open architecture model, where clients could engage the resources of different agencies. Just accounting was sort of the mantra, I remember. So more recently, though, you've discussed a client need for centralized solutions. You've hired against that. What's driving the shift? What does it mean for the operational profile of IPG now? I don't know that it's a shift. I think it's actually kind of a step change forward, right? Because inputting senior level, functional leaders at the corporate center, you know, what I think you used to have before is in a world where the industry was just far less developed when it came to the need to have these platform components and these technology-enabled components to your business, you could, as we did, very successfully run this idea of open architecture, which was collaboration and integration among the verticals, right? Yep. Whereas now I think you need to connect those verticals to these platforms. God bless. You need to go faster in doing that. And then you—we probably also need to some degree simplify some of the portfolio when it comes to the number of brands and the verticals that we've got. So I'd say it's maybe open architecture 2.0 or 3.0. It's not really a huge... It's not a different strategic direction in terms of we want to deliver integrated solutions to clients. We want them to sort of be best of the various marketing services specializations, expertise, some of which, you know, some of them are crafts. And we will drive that from the center because we think that means we'll get tighter integration, we'll go faster in doing so. Maybe staying on structure, can you expand on the ways you're connecting Acxiom and Kinesso across the organization? You know, we remember when you announced the Acxiom deal, you know, media was held up as sort of the, this will be the first area of integration. You know, disciplines like creative, PR, that's more of a long-term goal. Where are we on that, that journey? I mean, media has been by far the place where we've made, you know, the most progress and where it is absolutely core to how we go to market, and it's been a big driver of the very consistent, you know, multiyear outperformance of the media asset. I think that, you know, when I mentioned, you mentioned, actually, thank you. When you mentioned FCB, there are parts of our world that have leaned in. There are parts of our world, like the experiential agencies, that are leaning in because they see the benefit when you're engaging with consumers, kind of in real time, in real life. It's this somewhat unique opportunity to have an exchange of data where the value exchange is super clear and the data is very, very, you know, the fidelity of the data that you get is very high. Other parts of the business have been slower to get there. On our top 20 clients, on the integrated clients, it's always kind of core to what we do. And then, as we sort of launch the next iteration of our kind of engine or operating system for how this is all pulled together with the team at the center that you just alluded to, you know, it's baked into that as well. But I'd say... I don't know, I haven't sat and thought through, you know, the Acxiom data is used by IPG Health. I mean, it's maybe two-thirds of the company is a good ways along on that journey. Yeah. Range and bearing. Got it. You've discussed client need for scale as a challenge for some of your digital specialist agencies, which have been a headwind to your growth recently. They have. Should we therefore think of a long-term solution as combining these units into your major creative networks, or is it about M&A to kind of bring scale to those, those agencies? ... I don't think the former, and I know that that's maybe not consistent with what at least one of our competitors is doing. But I don't think the former because, you know, if you look at the places where we've got these very strong performers, whether it is IPG Health, whether it is our media assets, what you have is you've got scale, you've got a lot of, centralization of core services and centers of excellence. So I don't know that, I don't know that integrating below the holding company level, when integrating at the holding company level is increasingly, you know, is something we're called on to do. So my sense is that it, it won't be by trying to take those digital assets and rolling them into, traditional creative assets or networks. I think you're also looking there at two parts of the business that are more challenged. So again, generally, you know, we don't know that we believe that if you put two things that are both challenged together, what comes out the other end is actually gonna be- Yeah. A great answer or a great outcome. But as we have alluded, I think that, again, coming, you know, partially speed of change, you know, connected to your first question. Partially, I think, pressure that we've seen in the last 15-18 months around sort of macro uncertainty, whether it's economic, whether it's geopolitical, those assets which have been very strong performers for us in the past, had never been challenged. The quality of the work itself, design work, innovation work, kind of intersection of tech and marketing, had been strong enough that it was never a question of saying, "Oh, somebody who just has a scale solution that might qualitatively be not as strong in certain areas, is gonna win." But I think, you know, our sense is that something where we probably need either internally aligning those assets and likely something inorganic as well. Sorry. So staying on that, you've been pretty direct about a desire to add in the commerce and business transformation space. Why these areas, and then why through acquisition, as opposed to building out the capability internally? It's not either or, I mean, it's sort of both. So again, if you look at when we were building out the media asset, and we were essentially creating our own, you know, data stack and tech layer, and the decision, when it came to Acxiom, was not a function of our inability to build that ourselves. It was just our sense that the speed at which tech was transforming things and the scale at which we were gonna have to be able to to securely handle first-party data was greater than what we, you know, felt we could either accomplish in time ourselves or, you know, at the caliber that we wanted to see it. So in areas like commerce, in areas like like retail media, we've got component parts inside the group. They're growing well. We've got a retail media solution inside of Mediabrands. It's powered by Acxiom data. It's a business that, again, is growing well. But when we look at either how fast we think it could grow if it had more scale, or whether or not there are gonna be some benefits to the very deep specialization and some of the tech that would come with an acquisition, I think it'll. I think it's likely, it's likely both. Got it. Maybe, moving to the conversation to more recent. So IPG updated its guidance- Yeah. Maintaining a 1%-2% range. You did state, though, that you would have been comfortable at the upper end, excluding a specific client decision. So that indicates kind of a positive underlying momentum. So wanted to discuss where you've seen or observed any firming up. I know at the end of last year, you talked to smaller clients and some challenges on converting, you know, TBG revenues. So any kind of color you could say around that. Sure. -underlying improvement. I mean, the way that growth happens in our business is, you grow with existing clients, and when we sit with our operators and build plans, there is a to-be-gotten number, and the way that you can ultimately achieve that is to, you know, find net new, some of which comes through the large pitches that show up in the press. But a significant amount of the activity is very much of a... I think like other professional services, consulting businesses, you go out, and you build that book yourself or you find it. So I think it's fair to say, to your point, I think we said the tone of the conversations with clients, which we called out last year through pretty much all year, as being cautious, and that broader anxiety being something that was evident in the decision-making, that we were seeing, larger pitches converting more slowly. Clients wanting to keep a measure of optionality, and often sort of modularizing bigger assignments so that they could maybe, you know, find off-ramps. So I think that the tenor of those conversations has definitely improved. It's more normal in terms of where and how our folks are able to find that, that revenue that you, that you earn and that you find in a, you know, way that's much more-... In essence, sort of, I don't know what the right word is, but it's not, as I said, oh, here's the very big pitch that takes a long time, that then turns on a sizable spigot. So I think that's one thing. And then, you know, over the course of the year, last year, we had 6 of 8 client categories pretty solid throughout the year, and that continues to be the case. And then I think the last piece of the puzzle is just that the one category that was challenged throughout the year, last year for us, and called out by a number of our peers, was tech or tech and telco. And quarter to quarter, heading into Q1, pulling out what for us is an unfortunate but a sizable loss in the telco space. That means that, you know, from the outside looking in, you're still gonna see a drag that's with us all the way through, probably mid Q4. But that broad category is feeling like it's stabilizing. Okay. And stabilizing, that's the kind of bellwether, big tech names? That was basically, I mean, again, for us at least, when over the course of the year, last year, we were calling out that tech was costing us a point, a point and a half more of organic revenue growth. It was very concentrated in, you know, a group of 5 or 6 very large tech clients. What gets that group spending, right? I mean, you, they're all competing on AR, VR, streaming, social, right? Shouldn't that type of environment create that growth? It should. I mean, I think, I think that... I think what, what was different from, I think, you know, as we see it, is that, the cutbacks in marketing spend over the course of the last, you know, 12 months, range and bearing, were related to and a function of how much cost cutting was happening inside of those companies. So those companies were, as we all know, resizing their employee population pretty dramatically, being very public about the need to be very thoughtful around costs, and so there was sort of a knock-on effect. A, budgets were being restrained or cut, or B, individuals who would otherwise have been buyers of our services were no longer employed. And so now when we sit here and you sort of say, okay, so it's, it seems to have stabilized. They are all growth companies, they're all innovation companies, they're all bringing these new products and services to market. So there is gonna need to be... One would think, you're talking about some of the most, you know, powerful, valuable, visible brands in the world. There's gonna need to be investment in getting those narratives out into the world, or in getting to the right consumers so that they can become, you know, parts of the franchise. So yeah, we, we think that will begin to turn. Got it. Any incremental insight on other verticals? Anything you're seeing across the space that's worth calling out? No, not that's in any way sort of inconsistent with what we've been calling out. As I said, over the course of the last 12 months, when, you know, we saw solid results in financial services, that continues to be sound. We saw CPG in a pretty good spot. You know, some of us are ancient enough to remember where CPG was like: You don't want that, you only want tech. Now it's a little bit, That's so ancient, like 6 years ago. No, nothing, nothing, I think nothing- Yeah ... jumps out on a client sector basis that's all that different. Got it. On new business, so we recognize trends can be volatile over short periods. You have had, since Q4, a handful of losses with some long-standing clients. You called one out before on the tech side. There was another for a client that was recently onboarded. Same time, there's been some pretty substantial wins in the media space. Yep. Can you give us color in terms of what you're seeing? How is IPG positioned over the balance of the year, given some sizable accounts in review, some others potentially launching RFPs? I think, I mean, what we refer to as the pipeline of larger pitches is actually pretty active. I think it's picked up again relative to last year. Across most of the portfolio, we're seeing a stronger pipeline. And then, you know, to your point, we're seeing some pretty sizable wins in media in CPG and financial services, in health, come online. We had one automotive client of long-standing in media that left us, so that's gonna impact the course of the year. And then there's a big CPG, global CPG pitch that I think everybody in the space is in, where there's upside for us. There's a big automotive pitch that's global, that would be upside for us. There's a lot of... You know, you've got some new marketing leadership at some large companies that have had a lot of stability, where I think you're gonna see some, some shifting in and out. And then we've got a large sort of statutory pitch with an important tech and retail client, so I think that's probably the one that we're most focused on. Got it. About 5 minutes left. Does anyone in the room want to ask a question? Raise your hand if you do. If not, I'll keep going. I want to just cover international. If you look at Q1, that was the first quarter, I think in seven, where international growth didn't notably outpace the US. In fact, it lagged. A lot of regions to cover, but do you want to just kind of broadly frame the dynamic there? ... I mean, I think it's a function of a couple of things, right? If you think about two things we've covered, one being the impact of large tech, which is concentrated in the U.S. So I think, relatively, we're gonna see weaker performance in the U.S. as opposed to international, because that's a part of what was in the U.S. And those two digital agencies are also, you know, overweight to U.S. So I'd say that that's one piece of it. And then, if you look, you know, kind of broadly across rest of world, you know, Asia is about 7% of our revenue. We definitely saw lots of small, nothing big that jumped out, that led to the deceleration there. We saw a much stronger Europe, led by, again, probably media and health. The Middle East is a bit odd for us, just in that we're the largest among our peer set. No, we're not the largest holding company by any means, but we're the largest in absolute terms, both in the Middle East and in Israel, and so we've definitely seen what's going on there geopolitically. And, you know, the impact that's having on the economy there or on those economies is showing up in those results. So, you know, it's a lot of sort of some, you know, puts some takes. Got it. I want to touch on margins. So after several years of expansion, you are guiding to a roughly 10 basis point decline this year. I think you called out some investment. How should investors think about the, the longer term trajectory? Is it still linked very much to organic growth and that you can convert at a higher incremental margin, or is the kind of world we're in now with AI considerations and investments, alter that at all? No, I think, again, for folks who have followed us for some time, you know, that the aspiration, and we think the right long-term goal on the top line is GDP and above GDP. When there's growth, the nature of the model that we run, which has a lot of flex to it, means that we can grow margins with modest to north of modest. I mean, we proved that we could grow margins last year, and it was flat, so that was not—you know, it was a test case, not the one we wanted. But that's a big part of it. I think the evolving compensation landscape, where the ways in which we get precision outcomes, some tech that clients will, you know, either license or, or buy in ways that are more product-like than the historic FTE model, and then some outcome-based, all of, all of those are, are meaningfully more profitable and represent upside. So we see the opportunity to keep moving margins up over a, you know, mid to longer term horizon. Okay, great. Yeah. We got about a minute left. About a minute left, and nobody wants to ask? No one. Anyone in the audience? It's early. It's, you know. Any question I ask requires more than a minute, so why don't we cut it off there? Thanks, Philippe, so much for being here. All right. Thank you all. Appreciate the time.