Mediabrands, a division of The Interpublic Group of Companies Inc. (IPG), has partnered with AOL Inc. (AOL) to launch a new sophisticated online and technology solution for retail marketers and direct consumers.
Before creating the new solution, Interpublic Group will conduct market research and test retailers throughout 2010 by creating an online pre-shopping program. The program will include five retail partners, and the success will be calculated on the basis of the creation of user training, in-store sales lift and the effectiveness of new advertising formats.
Interpublic Group is the third-largest advertising company in the world and continues to look for strategic investments to capitalize on emerging markets. In 2007, the company made investments in India and Brazil, further strengthening its presence in these high-growth, developing markets.
In 2008, Interpublic Group further built on this strategy and completed an important transaction that increased its stake in the Middle East Communication Networks (MCN). Headquartered in Dubai, MCN is the region’s premier marketing services management company with 60 offices across 14 countries. The company’s partner in Russia is the acknowledged advertising leader in that country. In China, the company operates with all of its global networks and across the full spectrum of marketing services.
The demand for services, as well as the financial condition of some of its clients, has been adversely impacted during 2008 and 2009 due to the difficult economic situation.
While it is unclear how long these conditions will persist, we believe that the company’s broad range of service offerings, diversified client base, geographic diversification, strong talent, liquidity position and enhanced expense management capabilities will provide a measure of protection even in the harsh economic climate. Moreover, we see the market gradually recovering. The business outlook will be boosted as corporate and consumer confidence returns.
We maintain our Neutral recommendation on the stock until a substantial market recovery is visible.
Read the full analyst report on "IPG"
Read the full analyst report on "AOL"
Zacks Investment Research
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