Interpublic Group, one of the world's largest advertising groups, saw revenue decrease by 4.1% year on year in the three months to December and warned that the economic downturn is now starting to hit its bottom line.

In the fourth quarter of 2008 Interpublic saw revenues fall to $1.9bn (£1.33bn), a 4.1% year-on-year fall, which equates to a 2.2% decline in organic revenue, excluding acquisitions and disposals.

Interpublic, which owns ad agency networks including McCann Erickson and DraftFCB, saw a 1.9% decline in revenue from its US operations in the fourth quarter and a 6.3% decline in international revenues.

"The latter part of the fourth quarter and the early part of 2009 have begun to show the negative effect that the broader economic situation is having on the marketing services sector," said Michael Roth, chairman and chief executive of Interpublic. "Our long-standing conservative approach to financial and balance sheet management has us well positioned for these volative times."

Overall, Interpublic's results for the full year 2008 show an improved performance. Profit in the fourth quarter rose by 22% to $209.8m, an increase of more than 20% year-on-year, as the company pushed its operating margin on business to 17.4%. The company's operating margin across the whole of 2008 was 8.5%.

Revenues were up 6.2% year-on-year to $6.96bn. On an organic revenue growth basis IPG saw a 3.8% increase. Revenue from its US operations were up 3.7% and from international operations up 9.4%.

Operating profit was up 71.3% year on year to $589.7m.

"Our 2008 results were very strong, we posted organic revenue growth that is at the top end of our industry and continued to demonstrate significant improvement in profitability," said Roth. "We are pleased with the progress we are seeing across all of our businesses."

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