IPG
#Okay.
Pass-through is a direct pass-through.
It has nothing to do with dispositions.
The 30 basis points is apples-to-apples.
That's principally from our CMG businesses, particularly Jack Morton, our event businesses.
Again, as you recall, those are direct pass-throughs for revenue and expenses.
I'll comment on PR.
I'm going to let <UNK> talk about since it falls within his purview.
Remember, the PR business has changed dramatically.
What's happening is all our different disciplines are all covering all sorts of aspects of the market place.
Digital capabilities, social networking, social media, content, all of that is part of what we're seeing across the board in both digital and PR agencies and our traditional agencies.
And as a result, Weber Shandwick in particular was a leader in terms of looking at their portfolio and converting to the digital and social environment, and as a result we've seen them taking market share out there.
It's because of their content and new thinking in terms of PR.
We're encouraged by that.
We think they continue ---+ we have best-in-class offerings there and we continue to see solid growth there.
<UNK>.
To add on to <UNK>'s comments, we made specific investments around new capabilities around PR.
You look at our performance at Weber, at Golin, at [DeBreese] it's clear they're gaining market share.
The critical thing is we're going to need to continue to invest and keep our place in the marketplace.
Looking at the rest of the portfolio, our sports business at Octagon, our experiential business at Jack Morton, it's very, very strong.
The CMG segment does get impacted by the decline in pass-throughs, and that's intentional.
We've been trying to migrate our contracts away from being a principal specifically in our experiential business to an agent.
So when you look at it on a net revenue basis our growth has been high-single digits for the past three years.
So those businesses are very, very healthy.
And it's nice in our branding business that Futurebrands had again, a very strong year.
We're very supportive of that segment and we'll continue to invest.
Let me add when we say we talk about invest, we actually had an acquisition by Golin in China this year.
And we haven't had ---+ we basically grow our business in China organically by hiring some really talented people as we did in 2015.
For Golin, we actually bought a company that's very attractive and added to their portfolio.
The other important part is when we talk about integrated offerings, we mean it.
And so when we put together open architecture, whether it's Golin, whether it's Octagon, whether it's Weber Shandwick, we bring them into the open architecture model.
So when we're sitting at the table and presenting the best of IPG to our clients, it includes a full array of our businesses.
So our marketing services, our traditional agency businesses, our digital capabilities and our media.
They're all sitting at the table, and frankly that's what clients want to see and the collaboration is critical to that, which is why we spend so much time on collaboration within IPG.
And this open architecture model actually works.
And even on ---+ when we're just looking at media pitches we bring in the open architecture on media.
We have different disciplines, digital, experiential, all of that comes to play in these pitches.
And frankly, I'm a firm believer that's one of the reasons we've been successful in the new business arena.
Because I've heard a number of clients say to me when we walked out of the room that what was ---+ it was refreshing is that they didn't know which individual was from which discipline and the team really spoke as one voice and they were focusing on clients.
And that makes a big difference to the clients because they don't have to worry about our silos and our issues.
They're just interested in servicing their clients.
And if we didn't have the marketing service arm that we have at CMG and the media and the digital capabilities and the creative capabilities at our agencies, we wouldn't be able to do that.
So I'm very comfortable with that.
Thank you.
Thanks.
Well, that was a good question.
Thank you.
Could we go on to the next.
First of all, as you know, Philippe is sort of an integral part of the collaboration we have at IPG.
Henry's done a tremendous job in coming into Mediabrands and the success of Mediabrands is pretty evident by the results of their performance, and he's done a great job, him and his team at UM initiative and all the rest of Mediabrands.
Philippe's oversight role at Mediabrands is exactly that, to bring ---+ to make sure that we're looking at all the possibilities of collaboration.
And as well Philippe has a technology background and helping in terms of new media and new technology as well.
It was exceptionally well received at Mediabrands and the people, plus frankly Philippe has an HR responsibility.
So he knows a lot of those people very well and they work very closely together.
I can't tell you how many favorable e-mails I receive for both clients as well as individuals on that move, so we're really excited about it.
Marketing services, as I said, it fits very nicely into the open architecture model.
I don't believe we have to own various data sources and so on when we can rent them.
But that said, we did a data analytics acquisition in Israel this year.
Mediabrands has their own data sources.
And when they need to use that, they have over 80 or 100 different data sources.
As long as there's partnering out there we can rent it.
We think we have to do it.
We have a sufficient amount of analytics and data to make our offerings competitive, if not better.
And we don't have to own it.
But when there are unique opportunities out there, we make some tactical investments in it.
We did it in a little ---+ in TV.
We did it in keep.
So we look at it both ways.
The key to this in the open architecture is having a vehicle without having to restructure our corporation to collaborate.
And since we've been doing it for 10 years, we didn't need to restructure our entire Company.
We have high priority objectives for all of our CEOs that require them to collaborate both within their networks as well as outside.
So it's kind of interesting to see everybody jumping on this, but we started doing this 10 years ago and it's part of our DNA.
And every time there's a new thing out there in terms of whether it be data, whether it be content, we want to participate and we'll do it through our partnerships, through investments, or just contractual arrangements.
Thank you, <UNK>.
Operator, next caller, next question, please.
I guess it's been that clear.
<UNK>, I'm sorry, we didn't hear the first part of your question.
Well, we've been averaging close to $300 million buybacks per year.
We have an extra $149 million on top of the authorization.
We're not committed to doing all of it in one year.
We'll have a normalized annual buyback throughout the year.
That said, every once in a while we're opportunistic.
You saw we were a little over-weighted in the fourth quarter when we saw some price pressure on our stock.
So we have the flexibility.
For analytics point, if you use $300 million I think that's a reasonable number for us to spend, and we'll be opportunistic and see how the marketplace goes.
This is part of a long-term strategy.
We believe that given our leverage, obviously bringing our ratings up one more notch will be very helpful us.
In that it will give us a freer commercial paper program which could help us in terms of the cyclicality of our cash flows, and that could free up some additional cash as well.
So from an overall program point of view, we're very comfortable with our balance sheet and where we are.
We hope to have a commercial paper program if we get one more notch up.
We have a robust return of capital on buybacks and 25% increase in dividend is a very nice mix between dividends and buybacks.
So our overall structure in terms of return has been very well received by the investors before year end.
Between <UNK> and myself and <UNK>, we've met with most of our shareholders.
And this is based on the input we're getting from all of our shareholders.
And as far as our leverage, we're very comfortable and we want to be where we are heading into a market that is as volatile or potentially volatile as it is right now.
That's a great question and the answer to that is yes.
Particularly on the digital.
If you look for example what R/GA is doing in terms of design and business planning and product development, the accelerated program are examples of that.
We have capabilities, and there aren't many companies that have the capabilities we have both in terms of typical advertising role, media planning, content distribution, digital expertise, insights, all of that put together and frankly what we do actually works.
And we had data and we have all sorts of information that shows that if we can bring all of these offerings together, we can in fact help our clients move the needle.
And it's refreshing to be able to walk into a room and put together some new ideas from a business context.
And you're right, it's not just traditional advertising.
It's looking into the future.
We can anticipate where consumers are going to be spending their money, and based on those insights we can help our clients real-time look at where they can allocate their dollars and if it's not working we can shift with them.
We can create dashboards with our clients.
We can help them do design work.
We can do branding for them.
It really turns out to be a full service offering that we can tap into and it gives them a degree of comfort that they're getting cutting edge insights without having to add 12 different disciplines coming in a room, working together.
So I do believe ---+ and of course we do consulting.
Several of our agencies have a consulting basis arm to it.
So yes, our business is changing and frankly, that's why I'm bullish on our industry.
For years they talked about our industry being disintermediated, going away.
We always find a way to sustain ourselves and I think if you look at our results you've got a pretty good indication we're capable of doing that.
So yes.
I thank you for that question.
With that said I think those are our last questions.
I really thank you for your support throughout the year.
We're excited about 2016.
Notwithstanding some caution that we've made and I look forward to bringing it to light.
Thank you very much.
