Okay. 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. Hello, my name is Cameron McVeigh. I cover some of the advertising-related stocks here at Morgan Stanley. I'd like to introduce Philippe Krakowsky, Chief Executive Officer of the Interpublic Group. IPG is one of the world's premier advertising and marketing services companies with agency brands covering the spectrum of marketing disciplines and specialties. Welcome, Philippe. Thank you, Cameron. Good to see you. Great to see you. Great to have you here. Appreciate it. To start, as you look ahead into 2024 and beyond, what are your investment priorities for the business, and what are you most excited about? Investment priorities for the business. I think for those who've followed us for some time, the trajectory around taking marketing services into a world that is more and more informed by technology and data have seen that a lot of the investment has been organic in sort of upskilling our people and then parts of the business, like media, like healthcare, which have been leaders on that process or in that transformation. So I think that a thing you're definitely going to see from us is kind of a continued investment against those priorities. I think that some of the areas where, again, writ large, we see a lot of opportunity for growth, whether that's commerce or retail media, you'll probably see both organic and inorganic activity and investment there. It excites us to do everything from take the data that sits inside of our Acxiom asset married up to what we're doing at Media brands and put a kind of retail media solution into market. But I think we'll also look through M&A for opportunities to go faster against that commerce and retail media opportunity. Then I guess the last place where I'd say we're seeing need and we're excited is sort of investing against the parts of our business that are platform-like, that are more, again, tech-enabled, whether that's mentioned data, sort of audience-led thinking segmentation, which we've been doing for some time. But I think production is an area where we see opportunity, and that sort of gets us into the conversation that you can't hide from, which is sort of the GenAI conversation. But those are all the areas I'd say get us both excited and are where the focus is going to be as we head into 2024 in terms of investment areas. Great. There's definitely a few of those topics I want to hit on. No. Unconceivable. Before that, I guess as you think about your asset base today versus when you took the role of CEO, what's different, and how does that impact the growth outlook? I mean, a step back, I guess, goes to having been with the business for a very long time in roles that either involved sort of strategy for the group or leading parts of the business that, like media, have been sort of at the leading edge of this transformation. I don't know that at a strategic level there's anything dramatic that has changed. I guess what I'd call out is the consolidation of our healthcare capabilities into a vertical discipline, which has changed, and it's a significant part of the portfolio. So relative to three-four years ago, again, that's an area that's been accretive to growth and margins, so clearly gotten bigger relative to that three years ago starting point. Same for media. And then I think the other thing is that we're building certain centers of excellence for the group to use and probably a larger corporate center leadership group because I think the engagement with clients and the integration that we've been strong in for a period of time is one where you need to mandate and to organize those assets from the center to a greater degree, given that the complexity and the velocity at which a lot of this is happening has picked up during that three-year horizon, which also happens to obviously dovetail with all the fun we've had through and now beyond pandemic. Makes sense. Thank you, Philippe. Back on the healthcare point, how would you say healthcare marketing has evolved over the past few years, especially with the pandemic? And what are the trends in the sector that you see driving sustained growth, and how is IPG benefiting from these trends? I guess I'd sort of break it into two. The nature of the work we do with clients in that space is pretty sophisticated, and it requires not just the expertise that we bring on the marketing services side, inclusive of data, tech, et cetera, but it requires deep subject matter expertise in the science that sits behind what we're taking to market. So that makes it somewhat distinct relative to other parts of what we do, ergo the vertical approach and the way in which we've sort of consolidated and centralized that. I think that at a macro level, you clearly come through pandemic, and that's, broadly speaking, a period of time in which public perception of companies in that space benefits. I think that some of the technology that accelerated as a result means that they're bringing to market a range of products that can address lots and lots of conditions that are really, really kind of urgent at a macro level. And then pretty much everywhere you look, other than maybe one continent that comes to mind, but I mean, you have aging populations everywhere. So we see that as a part of the economy that's still going to be strong for the foreseeable future. Makes sense. Let's step a bit back to your guide. You had provided guidance for the year of 1%-2% organic growth with about a 16.6% EBITDA margin. How should investors view that guidance in terms of some of the macro risk that you attempted to bake in? I guess the observation, which for folks who follow us know and my CFO partners in the room here, is that the way that we build budgets is very, very bottoms up. And it starts with conversations with all of our operators that reflect the reality of their business, whether that's a function of what's going on with their offering, what's going on with their clients, and then sort of geographically. So the macro gets built into the plan, but it gets built in sort of bottoms up. So it's not like you bake in a set of macro assumptions and then push them down into how and where you end up. And so I don't know that there's anything in there that speaks to "macro." It's reflective of a combination of things. I think for us, it's reflective of some, to some degree, the asset mix inside the portfolio. So as I said, certain elements of the group that, be it media, be it some specialty, marketing services, or healthcare, outperform and are probably more oriented to ways of marketing that are more modern, tech-enabled, sophisticated. Other parts of the group that are not as far along in that evolution. And then I think you see client mix in there. So for us, last year, we called out the fact that one sector, which was tech and telco, and very specifically really certain quite sizable clients in tech, were much more cautious and/or actually looking to cost cut across their ecosystem, inclusive of marketing. And so I think you're not seeing anything that is not reflective of that. And then if you sort of take geography into effect or you sort of think about how that leads to your question about how do you get to the guide, cautious Europe, given what's going on there geopolitically, impact of the Middle East to us, which maybe is a little disproportionate or unique just because we've got a very sizable operation in Israel specifically. We've definitely seen that impacted just because the economy there understandably impacted by the reality that's pretty horrific there. I think those are really all the moving parts and the ins and outs of how you get to that 1%-2%. Got it. Makes sense. I guess just to follow up on the tech and telecom exposure, on the recent earnings call, you noted a recent stabilization in that vertical. Has there been any improvement or change in what you've seen since then, now that we're into March? Well, the earnings call was pretty recent, right? And obviously, I can't speak outside of that regular cadence. But I mean, I think what we said was this, and we're not seeing anything that leads us to believe otherwise. But what we said was that we'd seen it flatten. We'd seen it not getting worse. So you get that. We'd seen modest, call it what you will, but let's say green shoots. Notwithstanding that, I think that there are sort of one-offs, right? I mean, we're not seeing enough to conclude that there's really been a return to growth in that sector. For us, where we saw those clients impact our results were either in project-based businesses or in our traditional kind of advertising vertical. And then unfortunately for us this year, there'll be a drag on that sector due to a client loss, not due to something that is indicative of whether the sector's recovering because we have a sizable telco client loss inside of one of our traditional ad agencies. But I'd say we're kind of consistent with where we were a month ago in that it's stabilized, and we're seeing a few things kind of roll in or some activity, but nothing significant. Got it. This is my last question on this point. Oh, my gosh! But just in terms of when you think of clients in their tone for the next 12 months and how they're approaching their marketing budgets and spend, have there been any notable shifts, or how is the current environment? I mean, outside of that vertical across during the course of the year last year, we were seeing some growth. And I think that we'd still say that there's some caution. And I think it's sort of as a result of how uncertain the macro is, whether that's around the geopolitics. Obviously, there seems to be less uncertainty around the Fed, which is a positive of sorts, although nobody really knows when a it's a version of the answer on we've got stabilization, but we don't really know when we're going to start seeing improvement. So I'd say that we called out probably mid-year last year that we felt that there'd been a step down in client sentiment, and I think it's been kind of consistent since. So as we go into this year, other than the one vertical, there's engagement, and there are people looking to invest. But they're being very thoughtful about it. Right. Thank you for that. Please. You recently named a new CEO of Huge, the digital specialty and creative consultancy. Can you talk about the future of the digital specialty agencies and the opportunity you see here? And do you think this is still an area of investment? So we did. We named a new CEO who'd actually joined us a few years ago from the consultancy side of things, so out of Accenture. And that's an agency that has been, over the course of the last two years, range and bearing, doing, I guess, a couple of things. One is moving away from or looking for a path to move away from an FTE fee-for-service model or from that exclusively, and then looking for ways to incorporate AI into. We've been doing a lot with AI in our media and data business for some time. But it was sort of an early adopter, or at least a place where we were piloting and thinking about where and how that technology could impact those businesses. So I mean, I think what I'd say about those businesses is twofold. One, given some of the broader uncertainty and challenges that the industry faced, we're looking hard at whether or not you need that skill set, but you also need scale against that skill set. And I would say those have not been constraints to growth for Huge or R/GA in the past. But it feels to us as if they might be. So we've co-located them. We've looked at ways to share practices and centers of excellence. But it might be the case there, back to your investment in 2024 question, that M&A there around commerce and retail media capabilities might be something that those need to be plugged into in some way. And then again, when I sort of think about, you've got scale, but I think connectivity to the broader whole. So those tended to be very premium capabilities that were bought sort of à la carte by clients. And it was help us with highly innovative marketing channels. And we're now seeing, like with our traditional consumer advertising capabilities, that they tend to do much better if they're connected into our data and tech stack. Got it. So still work in progress, which I should say otherwise. On the artificial intelligence point, when you think about AI within the advertising industry broadly, how do you view it maybe from even a short in a long-term perspective? So I'm going to do rearward-looking and actually a little bit long-term because I think it's a way to frame up how we're thinking about it and what makes sense to us. You get a moment in time where, as an industry sector, we get asked the question about disintermediation a decade plus ago. It's around the platforms and the scale at which they were achieving and the fact that digital media investment was going to these two very sizable platforms. In a sense, what you had was sort of the beginning of the need to bake tech capabilities into our model, excuse me, in order to both keep up with that but also be valued as advisors and consultative partners to our clients in this space. So you're kind of going, OK, when the platforms come along, massive data and algorithms come along, and we adjust to address those. And it becomes, I think, a tailwind for the sector and even more so for us. Now, when you say AI, I think you're saying generative AI. And does it bring some of that same dynamic to the creative and the content part of our business? I'd say yes. And so in the short term, what I think you're going to see is some of what you saw when we were sort of pivoting into that world, which is you swap out some of your human capital that can't keep up with that shift, and/or you upskill some of the folks you've got. And you begin to see where there's opportunity and to build tools to address this. And then in time, you have to step it up to where what you've got is sort of a platform offering and a solution that has a lot of component parts because it will accelerate such that, in a couple of years' time, we'll be solving for kind of creativity, content production in a way that has to be analogous to what we did in media. It has to be sort of programmatic. It has to be highly personalized with a lot of scale. And not only is it very unique to you as an individual and therefore targetable to you as an individual, it then also needs to be something where we understand the outcome of that, right? So I mean, to my mind, I think what you're going to see is a measure of experimentation, which is what you're seeing now, picking relatively few partners who you can take along on that ride. We just made a big announcement last week about something we're doing with Adobe along those lines. And I don't think that we'll ever be, as an industry building kind of foundational AI models, I think we'll be partnering up and then solving for use cases that create value for our clients. So we're going to be sort of somewhere in a middle bucket there. Sure. That makes sense. And on that point, as you frame this opportunity and think of some of the potential investment implications, from both a top line and a margin perspective, how do you view that in that context? I mean, I think for us this year, after four or five years of really solid progress in terms of margins, we've called out that this is an investment year in which I think you're going to see a measure of thought given to sort of whether the portfolio needs to be simplified a bit. So back to, as I was saying, where we've had success is where we've got an approach to something like media or health care where we have scale and deep specialization. I think some will be on where and what we need to be doing around AI. So we sort of hit pause on that margin expansion, which we still think is there in the long run. So you look at the AI piece or the GenAI piece around the parts of the business we've been discussing. I think what you net out with is probably a way to help clients with these very, very sizable content generation that's very precise. I think what you end up with is a component of that that is probably a value-based price piece, a piece that is FTE, but we saw this in our media business as it evolved, where you get a higher order of—I believe one of my competitors refers to them as knowledge workers. So let's go with you get a higher order or higher value work for the FTE piece. Then we do a fair bit, and we're always looking to do more outcome-based work in performance media, in programmatic media, the consultative part of our media offering data. So I think you'll see more of that coming to the rest of the offering. You can see where the gains are going to be just in terms of if you automate certain things. There's clearly going to be a margin benefit. The revenue opportunity comes with, there's the need for immense amounts of smart, intelligent content that is delivered in very, very personalized ways. That's net opportunity. Also, like I said, I think what you'll have is just a different model of how we are remunerated for those kinds of solutions. Right. It's helpful context. Thank you. Please. And with a tie, I feel like totally underdressed up here. But anyway, I haven't seen it. Let's shift to retail media. It's a growing topic and industry. It continues to alter ad budgets and where people are investing in the industry. Can you speak to where retail media fits into IPG's offerings? Then how do you see these trends progressing? Sure. I mean, I think it's, so our media offering over a number of years has been about being in a position to help large, sophisticated marketers who have sizable media budgets that they're investing, and put those to work in ways that yield either specific results or better results. But essentially, it's been a function of increasing the effectiveness of that investment. So you've got the ecosystem evolving where retail media, for many of our clients, is very attractive because it has either it provides them the ability to reach very specific audiences, or it has a really interesting kind of data back into it. And so we see it as an evolution of a place where our media offering has been very strong for some time. And as I said, we launched a retail media offering inside of IPG Mediabrands that uses our Acxiom data to either enhance the data that clients are getting from the retail media owner so that we are able to target more effectively or to model out audiences that we think are going to yield certain kinds of results or open up new avenues or opportunities for growth. And then where and how we add sort of the implementation, the agency muscle around that, as I said, is likely going to be inorganic. But it's definitely you're seeing the money flow there. I think we're going to continue to see that be the case. And I'm definitely an opportunity from where we sit. But I don't know. That can be. I mean, is there a specific when you say kind of Retail Media? I'm just thinking it's sort of a sizable universe. I mean, Amazon is still sort of the center of gravity of that for a period of time yet. And so I think a lot of the expertise will concentrate around solving there. And then you'll go to kind of all of the other networks that are in the process of being built. Sure. And I think of retail media networks and the Walmart VIZIO transaction. Which would have been a question you asked somebody else on this stage earlier today, right? Sure. Did they answer it? No, they couldn't. Curious if you have any thoughts around that potentially and then CTV going into retail media networks broadly. No. I mean, we've always liked. I mean, again, given our approach to media and our strategy, we've always been kind of rooting for a series of things to happen, right? So CTV faster is good for where we sit. And we think that you're starting to see a series of things that are helpful along those lines, Amazon Ads being one. I think we were the first. I'm not sure if we're still the only of the holding companies to have done a scale, multi-year commitment with Amazon Ads just because, again, there you've got a lot of the benefits that something like kind of addressability and really good data provide you with any media platform. And others will follow suit, right? I mean, I think what we'll probably see is people trying to figure out how they get more data or how they gain the ability to solve for clients across channels. I mean, we saw it with the advent of a bunch of the streamers and the fact that some of the more linear or traditional media owners are clearly going towards a singular user ID and making sure that they're going to clients with a robust solution that has a data component to it. So it makes a ton of sense. Got it. I agree. Philippe, I wanted to ask about principal-based buying, which seems to be back as an investor debate. You recently acknowledged that this is an area IPG is considering adding as a service. Could you talk about why IPG has opted to remain a pure agent in media historically and what is leading you to consider shifting the model? Sure. I mean, I think that, as mentioned, for us, if you kind of look at the broad trajectory of where the industry is going, coming to clients with value add as a consultative partner that can help them navigate this complexity is very compelling. And then I think that the performance of our media offering over a number of years has borne that out. It's sort of, I think, guess TBD is the swing. So definition of value can be, in our case, again, let's get to specific outcomes, or let's improve the effectiveness of your investment. Obviously, a definition of value can also just be kind of pure efficiency. And I think that the industry moved away from that, going back to when the ANA took a very strong position about that seven or eight years ago. I think that what may be shifting that, what seems to be shifting it so that we see it as there's an opportunity cost to not having that. I think we feel like there's some growth that we're leaving on the table at the moment by not having that, given that we know that the strength of what we've got has been proven out over a long period of time. I think comes down to, given the macro and the uncertainty of the last 18 months, defining value as just can it be had for less makes sense. I think that the inventory flows that are now available for a proprietary trading approach are greater than they were two years ago and involve more pretty interesting inventory. And so we're just looking at that and saying to ourselves that it's a dimension we want to bake back into what's been a successful offering for us, which didn't require it because it feels like kind of there's a demand for that, not across the board, across all marketers. But it clearly feels like there's been a shift there. Sure. And if there is a shift, how might we think about the financial implications of moving into a principal-based media business model? I mean, it's a subset of any, whether we've got a competitor or two who does do that and has either leaned into it or never entirely leaned away from it and now is benefiting. It's a subset of you can't solve for the entirety of a client's investment with this approach. So as we look at it, you want to be really thoughtful about building in the discipline around what it really comes down to is being incredibly, incredibly disciplined around centralizing all the decision-making when it comes to when and how you go into the market, being really sort of thoughtful and thorough about forecasting when and how you're going to be going into the market and the value that's going to generate. But I think for us, it's just I think you'll see it in the opportunity to either grow with existing, or it will be kind of reflected in our organic growth. That's really it. Got it. OK. That's helpful. We have a few minutes left. I wanted to see if there were any audience Q&A. At the end of a long day. End of a long day. There we go. Philippe, do you think between political and Olympic, that's enough to sort of have a positive kind of crowding out effect on the media side of the business this year, those sort of quadrennial factors that we tend to focus on? I mean, the interesting thing, right, is that the quadrennial thing, if you are a principal buyer, actually does provide some tailwind to your results, which we, given our current model and we're going to put it in place over the course of this year. So you're not going to see the impact in our numbers this year. But I think that has a benefit. There's going to be a ton of money in the media marketplace. So I think what's interesting is that it'll probably accelerate the trend lines that we're seeing, whether it's in retail media or in CTV, which I think, again, is a net positive because there's going to be money that needs to work. And it's going to be crowded out by folks who are, at least in terms of politics, not really in our addressable universe. It will have, I think, a modest positive impact on some of our specialty marketing services businesses. Yeah. And then just one more on the AI theme, but a little bit of a different angle. Are there consumer tech companies in your client base that are starting to think about marketing AI products that might actually turn into sort of a we've watched this tech headwind for a while, but it could flip the other way. Maybe that's on a 2024 event, but as you look out over the next couple of years. Wait. Rephrase the question. You're saying among our current. Well, I'm just wondering. Consumers or among our current. All these tech companies aren't. Partners, right. Clients investing a lot in AI today. But presumably, at some point, that becomes a potential consumer proposition that will require marketing. To some degree. But I mean, I don't know that it's going to dramatically. I mean, it'll displace other things that those clients currently do that involve innovation and that they need our help with because they need to communicate that into. So I don't see that as a dramatic. Again, I think it's not a likely and I wasn't sure, again, whether you're thinking clients or partners in tech kind of because, obviously, the ecosystem around kind of ad tech has now become MarTech has now become kind of whatever you call what a partner like kind of an Adobe or an NVIDIA or an Amazon can do. I was just curious on client wins and losses. You had mentioned a telco loss. I'm curious, how would you describe the environment for winning new business or trying to retain business? And I think the press has talked about Amazon account being up for review. I'm not sure if you have any comments on that. I definitely don't have comments on the latter because that's not a thing we don't talk about client business outside of with that client. Last year, we had a very strong first half with some of the offerings that we've been talking about up here. Cameron, whether that's kind of your smarter approach to media, your sort of data decisioning around and then one very large pharma integrated sort of pan holding company. Unfortunately for us, we unwound a lot of that progress with the telco loss I mentioned and one media loss in the automotive space, which actually speaks to the principal buying question, really, or it brought into focus the fact that that's an incremental piece of what we should be in market with. Then it feels like the year has started with a fair bit of activity in terms of scale, new business, as well as just matter of course, new business. But it's still really early to call that a trend. OK. Good questions. Philippe, thank you so much. Thank you. Appreciate the time.