Jerome J. Leshne - Sr. VP, IR Michael I. Roth - Chairman & CEO Frank Mergenthaler - EVP, CFO

Alexa Quadrani - Bear Stearns John Janedis - Wachovia Capital Markets Paul Ginocchio - Deutsche Bank Craig Huber - Lehman Brothers Frederick Searby - J.P. Morgan Karl Choi - Merrill Lynch Troy Mastin - William Blair & Company

Good morning and welcome to the Interpublic Group Third Quarter 2007 Earnings Conference Call. All parties are in a listen-only mode until the question-and-answer session portion. [Operator Instructions]. This conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to introduce Mr. Jerry Leshne, Senior Vice President of Investor Relations. Sir, you may begin. Jerome J. Leshne - Senior Vice President, Investor Relations: Thank you. Good morning, and thank you for joining us. We have posted our earnings release and our slide presentation on our website, www.interpublic.com and we'll refer to both in the course of this call. This morning, we're joined by Michael Roth and Frank Mergenthaler. We will begin with prepared remarks to be followed by Q&A and we will plan to conclude before market open at 9:30 AM Eastern Time. During this call, we will refer to forward-looking statements about our company which are subject to the uncertainties in the cautionary statement included in our earnings release, and the slide presentation, and further detailed in our 10-K and other filings with the SEC. At this point, it is my pleasure to turn things over to Michael Roth. Michael I. Roth - Chairman & Chief Executive Officer: Thank you, Jerry, and thank you all for joining us this morning, as we review the third quarter and first nine months of 2007. I'd like to begin with highlights of our performance and a brief overview of key areas of the business. Frank will then take us through the financial results. After his presentation, I'll return with some closing comments, and we'll move on to the Q&A. Last quarter, we called out very strong organic revenue increase as an indicator of the success we've had in attracting and developing talent, as well as strategically realigning a number of our capabilities so as to better meet the needs of the marketplace. Once again, we saw a strong organic revenue growth in Interpublic. Fueled by a wide cross-section of our agencies, we were up 5% in the quarter on this important metric. Year-to-date, the organic revenue increase was 4.8%, which makes us competitive in terms of our top-line performance relative to our peers. While there are still a few areas in our portfolio that need work, we clearly have the tools and talent to be a major competitive force in the marketplace. We continue to see growth from existing relationships particularly among our top 20 clients, which speaks well of the strength of our offerings. In conversations with our clients, we are getting no indications that they currently intend to pull back from their marketing activities as they head into the New Year. We're also seeing positive revenue impact from new business won in the first half of the year, and we continue to bring in new accounts such as Devereux [ph], US Census, DEX, Chilies and USAA. And just yesterday, we were informed that Lowe had won the pan European work for General Motors for Zafira and Meriva minivans. Through September, we remained new business positive. You will also see that we posted a continued improvement in operating performance. Operating income was up $30 million from last year's third quarter and is $120 million ahead of last year for the first nine months. Frank will take you through all of the specifics on key cost and profitability programs. In reviewing performance of the agencies, I would call attention to the fact the McCann and CMG continued to perform very well, with highly competitive global offerings in growth areas such as activation, CRM, public relations and event marketing. The Draftfcb merger has created a company with a compelling and differentiated go-to-market strategy, and we look forward to seeing the network really hit its stride as we move into 2008. Among our integrated US independents, we have some of the most respected brands in the business, like The Martin Agency, Hill Holliday, Carmichael Lynch, Campbell-Ewald, Deutsch and Mullen. And their performance continues to be strong. Our two media global media operations have made great progress operationally and financially during the past 12 months. Improved talent at Initiative Media and Universal McCann as well as a better collaboration between the two companies in non-client facing areas should allow both agencies to build on a positive momentum. Lowe's strategic and creative product continues to be its strength, as was evident when it presented its plan to our Board of Directors in London last week. Management continues to stay focused on refining the networks operating footprint, securing the right skill sets to meet the needs of the marketplace and improving the overall financial performance. At this point, it makes sense for me to address a topic that’s on everyone's mind, that is digital. We hear about it from all our operating people in their plans meetings and regularly get asked about it by investors. Clearly, developing digital capabilities will have implications for every one of our brands and for Interpublic as a whole. That sequester will be, continue to be more and more digital media channels with which to reach consumers as well as greater fragmentation of traditional media. As a result of technology innovations, our industry will also continue to be confronted by increased complexity, and speed of change. But the evolution of the media marketplace is not as zero sum game in which new media will eradicate all other forms of communication. Both old and emerging platforms are required by our clients. In fact, each channel has a role to play and each excels in addressing key marketing objectives at every stage of the consumer purchase funnel. Online is a unique in that it cuts across all consumer touch points and it adds a dimension to every other marketing discipline which is why research is increasingly finding that emerging and traditional media are strongest together as part of integrated campaigns. We believe that digital talent and capabilities must continue to be at the center of our thinking in the programs we create for our clients. They must therefore be integrated into all of our agencies. Of course there is small number of scarce specialist capabilities in leading edge or highly technical areas which will have to be shared across the group. We have three top digital agencies in R/GA, MRM and the integrated interactive offering within Draftfcb. Our US independents have also developed strong digital in-house capabilities. We have been very successful with the Emerging Media Lab and our digital partners whether with Facebook, Joost, BzzAgent to name a few. And earlier this year, we had addressed our search needs with the acquisition of the Reprise Media. More recently we launched a mobile joint venture with Velti. We must continue to invest in our digital offerings, particularly our international footprint. We must also invest behind stronger digital talent at our media agencies at Lowe and in our marketing service companies such as online analytics will be key as will social media marketing which work hand-in-hand with our terrific public relations, activation and event marketing companies. Moving forward, we believe that continued investment in digital talent, incubating new capabilities at small targeted acquisitions will be vital to building on the strong growth and marketplace momentum that we have seen thus far this year. Now to take us through the story in detail from a financial point of view, I would like to hand things over to Frank for a review of our results. Frank Mergenthaler - Executive Vice President, Chief Financial Officer: Thank you, Michael and good morning everyone. A quick reminder that my comments track the presentation slides that has been posted to our website. On slide two, we call out key points related to the quarter. As you just heard from Michael, we are pleased with our improved revenue growth in Q3 and what this says about the quality of our agencies. On a reported basis, revenue increased 7.3%. Organic revenue growth was 5.7 % compared to the third quarter year ago. We had strong contributions from both existing clients and new clients wins. We drove improved leverage on total operating expenses, leveraging base salaries and benefits as a percentage of revenue. We added to our accrual for annual incentives in the quarter due to improved performance and better expense phasing. O&G declined an all major expense categories as a percent of revenue, led by lower professional services fees. As a result Q3 operating income with $51 million, an increase of $30 million from Q3 06. Operating margin was 3.3% in the quarter, compared to 1.4% a year ago. It's worth noting due to seasonality third quarter revenues are significantly lower than in quarters 2 or 4. Over the quarter diluted EPS was a loss of $0.06 per share compared to $0.02 per share a year ago. Slide 3 is our P&L for the third quarter. I'll cover revenue and operating expense trends in some detail shortly. Here I would like to call out two items. In other income and expenses, we had expensed $5 million this year compared to income of $23 million a year ago. In both cases these are predominantly non-cash items. Second our tax provision was $36 million on pretax income of $16 million. As has been in the case in previous quarters this primarily reflects the impact of losses in certain international jurisdictions on which we receive no tax benefit. As we have said previously, those losses without tax benefit means that their annual effective rate should be in the mid 50% range. We continue to have available loss carry-forwards of approximately $1.5 billion to utilize as profitability improved. Our fully normalized tax rate should be in the 35% to 45 % range. On slide 4, we provide additional detail on revenue. Reported revenue in the quarter was $1.56 billion, an increase of 7.3%. Compared to Q3 2006, exchange rates had a positive impact of 3% and net business dispositions were a negative 1.4%. Results was organic revenue growth of 5.7%, which as I mentioned earlier was attributable to higher revenue from both existing clients and net new business wins. Lower half of the slide shows segment performance. The organic revenue increase was 4.9% in our Integrated Agency Networks and 10% at CMG. Within our IAN segment, the growth of integrated advertising and marketing assignments was at the core of strong performance in the U.S. and internationally. Our media operations also posted solid organic growth. CMG's results reflect another quarter of double digit organic increase at our major PR agencies and strong growth in our events marketing business. Slide 5, provides a regional revenue breakdown. In the U.S., revenue increased 6.8% organically, an outstanding results lead by McCann Worldgroup. We also saw solid contributions from Draftfcb, Initiative and universal McCann. Among our U.S integrated independents, Hill Holiday has strong growth fueled by recent new business wins. PR continued its very strong growth performance and was joined by event marketing. In the U.K, revenue declined 4.8% organically from Q3 ’06 due to project work in our events business a year ago that did not repeat, as well as shift in the timing of a large project that was move from the third quarter into the fourth quarter of this year. For the year-to-date, we approximately flat at the U.K. In Continental Europe, revenue decline 1.3% organically due to client losses and decreased spend by certainly clients primarily in France. In Latin America, revenue increased 12.6% on an organic basis led by strength in our media businesses as well as increased ad spend from existing clients. Mexico was strong for both McCann and Draftfcb. In Asia-Pac, revenue increased 6.5% organically. We had very strong revenue growth on a percentage basis in both China and India offset somewhat by weakness in Japan at McCann. In other markets, organic revenue growth was 26.5% due to strength in the Middle East and South Africa. On slide 6, a closer look at operating expenses. Salaries and related expenses were $1.03 billion in the quarter compared to $961 million a year ago. There are number of moving pieces in the comparison. First, as you will see in the appendix to our presentation, leverage on base salaries and benefits improved 40 basis point to 54.5% from 54.9%. Headcount at quarter end was approximately 43,000. Excluding the 850 employees from the recently acquired Lintas, India, we are approximately flat from where we started the year. As Michael indicated, we continued to make the necessary investments by hiring new talent to drive revenue growth in strategically critical areas. So the ins and outs in terms of staffing deserve a closer look, as we rationalize our cost structure to the number of businesses. Getting more specific, we’ve reduced headcount by more than 1,000 employees at Draftfcb and Lowe, so far this year. And currently, we’ve hired about the same number of people in support growth areas. The talent added is taking place in digital, PR, direct, CRM activation and media led by the following agencies. MRM Momentum, R/GA Webber Shanwick and Universal McCann. We also continue to add talent in our agency in key emerging markets like China. Total incentive compensation expense in the quarter includes an increase of $13 million from a year ago for our annual incentive program resulting from improved performance as well as a better phasing of annual incentive expense recognition for the year. It bears mention, based on performance year-to-date and our expectations for Q4, annual incentive expense should be essentially flat for the year. Expense related to long-term performance based equity compensation increased approximately $4 million, due to our expanded use of equity incentives. As we've indicated previously. We anticipate for the full year total expense of equity based compensation will increase approximately $15 million compared to last year. Leveraged expense was 1.3% of revenues in the quarter. As was mentioned in our previous conference call, we began to take necessary cost actions during the third quarter to respond to account changes that took place late in Q2. This led to incremental severance in the quarter notably at Draftfcb in New York as a result of the Verizon consolidation into Universal McCann. As we've begun planning for next year it has become apparent that the effects of these losses will be greater than we had previously anticipated. The recent client shifts at Lowe led us reevaluate the agency's overall cost structure. Expenses for actions taken in the third quarter are reflected in our restructuring line, which shows $5 million of severance costs related to Lowe. We expect that the total program at the agency won’t bob at an [ph] incremental $13 million in cash and non cash restructuring expenses to address headcount and real estate over the next two quarters. In Q4, we are looking at additional real estate actions across our portfolio of companies which should approximate $25 million pretax. At the bottom of the slide you office and general expenses, which were $469 million in the quarter compared to $466 million a year ago. O&G declined as a percentage of revenue, by 200 basis points to 30.1%. Fees for outside professional services, chiefly accounting and financial controls declined $6 million from a year ago. It’s worth noting that Q3 ‘06 showed a $61 million reduction from the prior year. As you will see in our presentation appendix, on page 25, each of the O&G categories presented professional fees, occupancy expense and all others decreased as a percentage of revenue. This clearly demonstrates that our commitment to major corporate cost control and reduction initiatives are bearing fruit. On slide 7. We show cash flow for the quarter. We had cash flow from operations of a $119 million in Q3, compared with the use of $70 million a year ago. On the highlighted line you see that working capital generated $22 million of cash, an improvement of $100 million in Q3 ’06, principally due to better performance in our media businesses. D&A in Q3 was a total of $74 million. Depreciation was $44 million, amortization of restricted stock and other non cash compensation was $23 million and amortization of interest expense was $8 million. In the investing activities section we used $34 million for acquisitions. We have made several investments in strategic, high growth areas this year. In the third quarter we stepped up our investment in FCB Ulka, a top Indian agency which cements our position as one of the two leading holding companies in India. Over the course of the next year we will continue to be open to strategic deals in emerging and high growth economies. As you can see, the financing section was fairly quiet. On slide 8, we present the current portion on our balance sheet, and as of September 30th ’07 and ’06, as well as at year end ’06. We ended Q3 with $1.53 billion of cash in short-term marketable securities. Our cash level is seasonal, as we have said previously and typically peaks at year end. Those are the areas highlighted in yellow. Under current liabilities, as we have called out previously, short-term debt includes our $400 million 4.5% convertible senior notes. This reflects the option of note holders to put that debt to us in March ’08 Our debt maturity schedule is presented on slide 9. Total debt at quarter end was $2.3 billion. This schedule is essentially unchanged from our second quarter conference call. On slide 10, we present a summery of key developments. Our strong top-line growth in the quarter reflects the improving competitiveness of our businesses, result of strategic decisions we have made taken related to our offerings and targeted investments in talent and tools. We will begin to see the revenue impact of Q2 account losses beginning in Q4 put pressure on growth. We will remain pleased with our progress in 2007 and we believe that the broad based improvements and the competitiveness of our offerings are sustainable. Some of these account losses have made it necessary for us to take related cost actions, which impacted the third quarter. Further action on staff reductions and real estate will be required during the next two quarters as well. We will also have to continue to invest in digital talent and tools in order to keep pace with and capitalize on the rapid changes that are taking place in our business. These factors will impact the rate of improvement in margin performance going forward. As a result of our annual planning process, we also have a better sense of what performance for 2008 looks like. Michael will be speaking to this key issue in more detail shortly. We continue to focus on the corporate initiatives that have been yielding so well for us in terms of O&G costs. We are also pushing hard to drive financial tools and disciplines into all of our agencies so as to improve productivity across agency collaboration, better share back office functions, and further simplify the organization. As we move through the crucial phase of internally testing our control environment, we remain on track to be compliance with SOX 404 with the filing of our 2007 10-K. We are finding that an additional benefit of these efforts is that robust financial controls are providing more timely data about the performance of the businesses, and giving us a better dashboard with which to manage our operations. At this point, I would like to hand it back to Michael for some closing remarks. Michael I. Roth - Chairman & Chief Executive Officer: Thank you, Frank. It's fair to say that for the second consecutive quarter, Interpublic performed at the highest level we have seen in many years. These results demonstrate that we have put the company back on a right track. As was the case on our last call, I will remind you that we've consistently stated that our progress would not be linear from quarter-to-quarter. Performance for the first nine months of this year is very encouraging, but it will not necessarily become the norm until after we have fully completed our turnaround. Looking forward it's clear that we must continue to accelerate the speed in which we embed digital skill and capabilities into every one of our agencies. This will require increased levels of investment, particularly in talent, professional development and technology, and to a much lesser extent, targeted M&A activity. These investments will be important in building on our current top line momentum, and will help us to ensure our long-term growth. But they will also affect our ability to achieve the full measure of the aggressive margin objectives we set forth for next year. The client developments, which we called out in the second quarter are making it necessary for us to take remedial actions that will have financial ramifications for the next two quarters. These developments have also put our margin objectives under additional pressure. We will continue to push for double-digit operating margins in 2008. However, our detailed planning process has led us to conclude that it is appropriate this time to adjust margin expectations for next year. We expect to post operating margins of between 8.5% and 9% in 2008. This would represent performance we can be proud of, a dramatic improvement over where we were when we began to turnaround less then two years ago, with revenue declining organically and operating margins of negative 1.7%. We've come very far in a short time. We’ve shown that we are willing to take direct action to address issues which we will continue to do so. Ours is a talent driven business and we have been successful in bringing on the right people and providing them with the resources required to build strong operating brands. Those kinds of investments would have helped us post the strong performance we are sharing with you today. We remain committed to making these kinds of investments, because that is consistent with the long-term interest of creating shareholder value. We look forward to keeping you up-to-date on where we stand in terms of our progress and our prospects. Our future gets brighter everyday. In order to realize that promise, we must always stay focused on improving our product offerings and delivering for our clients and improving our profitability. That’s what will allow us to enhance value for our shareholders, and to deliver on our ultimate objective of being fully competitive financial performance. I would now like to open up the floor to questions, thank you. Question and Answer

[Operator Instructions]. Your first question comes from Alexa Quadrani, your line is open. Alexa Quadrani - Bear Stearns: Hi, thank you. A couple of questions, first you mentioned some pressure on the revenues from the client losses over the center are likely to impact Q4. Could you give us a sense if any of that at all fell into Q3? I'm just trying to get a sense of the revenue impact in the next quarter. And then I have a couple of follow-ons. Frank Mergenthaler - Executive Vice President, Chief Financial Officer: Alexa, it's Frank. The revenue impact on Q3 was di minimus. Alexa Quadrani - Bear Stearns: Okay. And then, did you see a meaningful change in profitability at any one of your agencies in the quarter? For example Draftfcb, maybe Draftfcb, New York, did they see a big dip given the Verizon loss in the second quarter? Michael I. Roth - Chairman & Chief Executive Officer: I think I said as we indicated in the call, the loss of Verizon in New York did have an impact on the New York office of Draft as it moved over to McCann. And that’s reflective in the numbers we are talking about. We remain confident in the ability of the Draftfcb merger to be very competitive in the marketplace and to really start showing an impact in 2008. Frank Mergenthaler - Executive Vice President, Chief Financial Officer: And the biggest impact Alexia, was in a severance cost we took, as a result to the Verizon loss. Alexa Quadrani - Bear Stearns: Would you say at the other major agencies though the profitability was relatively stable? Michael I. Roth - Chairman & Chief Executive Officer: Yes, other than the issues we continued to talk about Lowe, in terms of repositioning Lowe. And your next question is going to be, when do we see Lowe turning profitable. And the answer to that is, we expect it to see them profitable in 2008. Alexa Quadrani - Bear Stearns: And then just lastly, you mentioned that some improvement in the media business. Was that just in the top line or are you're seeing better profitability there? And then also, could you provide us some color about profitability in Europe? Michael I. Roth - Chairman & Chief Executive Officer: Yes, let me talk about media and then I will turn to Frank… well I will cover Europe as well. The growth in media is both on a revenue point of view and cost containment and profitability. I think both our media units have shown an ability to add to its talent and yet focus on profitability. So we are very pleased with the improvements we are seeing there. As far as as Europe goes, in the U.K., we have added virtually new management in all of our units. And as Frank indicated for the year in the U.K., we see it relatively flat although we had a negative quarter. The pressure in Continental Europe is in France, and obviously we are taking actions in terms of talent to address that. Alexa Quadrani - Bear Stearns: Okay thank you. Michael I. Roth - Chairman & Chief Executive Officer: Thank you.

John Janedis, your line is open. John Janedis – Wachovia Capital Markets: Hi. Thank you. A couple of questions, guys. First, can you just Frank, maybe talk a bit more about the uptick in incentive expenses. How do the managers in terms of hitting margin targets, factor into the calculation in terms of the uptick? Thanks. Frank Mergenthaler - Executive Vice President, Chief Financial Officer: The first headline, John, on incentives is we believe the phasing of the incentive accrual for the year be more straight lined. If you look at last year, it was very fourth quarter weighted. In fact we believe from an annual perspective that our cash pay-out will be approximately the same as we saw in ’06. So I just think it is more straight lined recognition of it. On the long-term incentives, we called out, I think on the second quarter call, we believe, year-over-year we will be about $15 million higher on long term equity basis incentives and we are still in that ballpark. With respect to targets, the incentives are predicated on revenue and margin targets for each one of our individual operating units and when you look at the relative performance, those who are performing above those targets we are accruing those incentives now; for those who are falling short we back off on accrual. John Janedis – Wachovia Capital Markets: Okay. And then just as a follow-up, just in terms of salaries, and related line, the uptick during the period, given the organic growth here, I guess I would have expected to see a bit more expansion there. And I guess given your comments in investing in people, is there any reason that we should expect to see that tick down? And there's a number, I think in the past you talked about something in the high 50s, is it at some point still achievable? Michael I. Roth - Chairman & Chief Executive Officer: Our goal is to continue to drive towards that. I mean obviously, you are right, in terms of investing in our talent, that has had some pressure on our ability to expand the margin. But that part of our process is in fact for those people that we are adding is to be revenue generated and therefore grow the margins to new business, as well as focusing on cost. Our expectations are to continue to move that number down towards the numbers that we were talking about in terms of low 60%. John Janedis – Wachovia Capital Markets: Okay. And sorry, just one last question. On the revenue side, and your targets that you talked about last year, it seemed like you are at least pacing in line with plans for revenues on both, at least for ’07 and maybe for ’08 as well. So I am wondering, will the cost of doing business be increased permanently and how do you think about longer term industry margins. Are they basically not as high as you thought they may have bee a year or two ago? Frank Mergenthaler - Executive Vice President, Chief Financial Officer: I think right now, I think the whole industry is under pressure to invest in new talent and particularly as I indicated, on the digital side. I think your observation on the revenue one is a valid one. We feel much more comfortable in terms of our revenue being competitive with our peer groups, if you would. And I think it’s the whole industry is under pressure to maintain our margins and that goes to the value added process of what we are delivering. And I do think given the new techniques, the tools and the resources that we bring to the table, we do believe margins are attainable. But it's going to be a lot of hard work in terms of meeting the needs of our clients, and that’s why we gearing up from the resource perspective. John Janedis – Wachovia Capital Markets: Alright, thank you.

Paul Ginocchio, your line is open. Paul Ginocchio - Deutsche Bank: Yes, thanks. Two questions. First, just looking at the new margin target, you talked about how much the charges that you are talking about the I guess the first quarter of ’08 impact that target versus the economy versus Lowe, and I guess investing in digital talent, sort of tell me which is the most important of those categories that’s impacting margin target? And second, talking about, when is the Dell account going to be announced? Thanks. Michael I. Roth - Chairman & Chief Executive Officer: Well, let me handle the Dell. We are in the midst of obviously the finals of that. We had presentations recently that, actually last week and we are in constant dialogue with them in fact this week. So, we expect to see or expect to hear from them, I would say within a month, I think their target is within a month. And we are actively engaged in that and we are looking forward to a resolution of that. As far as the components of the impact… Frank Mergenthaler - Executive Vice President, Chief Financial Officer: Paul, the one-off costs with respect to the actions we are taking next year did not result in us moving the targets down to the 8.5% to 9%. It's more of a factor of, as you called out, the aggressive investment that we are making as it relates to digital and also the two key operating units that are accorded to the overall turnaround objectives in Draftfcb and Lowe and the impact that significant account losses had on them in ’07 and how that moves forward them to ’08 with respect to progress against their individual performance targets. Paul Ginocchio - Deutsche Bank: Any way to size those account losses, so we know what the impact is going to be over an annual basis? Roughly? Frank Mergenthaler - Executive Vice President, Chief Financial Officer: I think what we said at the time was it is roughly $15 million was the number, and again we don’t give specific information. But I think that’s a number that can be used from a range perspective. Paul Ginocchio - Deutsche Bank: Right, thank you. Michael I. Roth - Chairman & Chief Executive Officer: You're welcome.

Michael Nayeb Hasan [ph], your line is open.

Thanks. I have one for Frank and one for Michael. Hey, Frank, as always, your slides are great. On slide 22, you'd shown… Frank Mergenthaler - Executive Vice President, Chief Financial Officer: Let me get to it.

Okay. It shows limited operating leverage for salaries and related, the past couple of data points over the past 12 months on a trailing basis. The question I have, I think everyone is still trying to figure out where does the leverage come from, on salaries and related? It looks like it is pretty much tied to revenues. And other companies as well in the industry are not showing a lot of margin kick from salaries and related. So over the next couple of years… Frank Mergenthaler - Executive Vice President, Chief Financial Officer: I think the leverage has to come from the base salaries which is on the next slide. On the incentive line, severance is normalized and we think probably 100 basis point is a reasonable number. We believe on the incentive side it's 3% to 5% of revenue in the aggregate for a run rate basis. So we need to get out a base.

And how does that occur? Frank Mergenthaler - Executive Vice President, Chief Financial Officer: Right now we are fighting a little bit of headwind, because we are in significant investment mode, but with respect to, once that somewhat stabilizes, it’s in better leverage of our existing headcount. And we do that by investing in better tools and on driving better efficiency through client management. So there is not one single answer. We have got agencies in the portfolio that this is the rollout of IPG. We've got agencies in the portfolio that do dramatically better than this. So it’s not a bar to which we haven’t seen it achieved. Michael I. Roth - Chairman & Chief Executive Officer: From a granular point of view, whenever we have our operating reviews, that’s the number one item we address in our discussions. So everyone is focused on… if there are any increases in people or costs, they have to go through a process in terms of revenue generation and payback, if you will. So the discipline now is very much in place, both with respect to the regional operations as well as the individual CFOs, and the corporate reviews. So we are addressing those issues directly.

Okay, thanks. And then I have one for Michael which is, when you think about building out your digital capabilities, why won’t you also see an increase in M&A activity in the coming years? So how is the buy versus build decision flow through ahead? Michael I. Roth - Chairman & Chief Executive Officer: I mean that’s an obvious question. Frankly the prices of some of the buys are quite enormous. And given the fact that we have a pretty good footprint between MRM, R/GA, our digital capability within our independents as well as the Draftfcb component, our view is to leverage our existing expertise and grow it from within. And we still look at picking up strategic operations on a smaller level like we did with Reprise and a couple of other digital shops that are smaller in size. But to go out and add to our critical mess on a large basis by paying up for it we don’t think it’s necessary at this point in time. We are competing very effectively right now in the digital offerings given the resources that we have. And I think the better route for us right now is to add to our talent base and expand it that way.

Great. Thanks, Michael. Michael I. Roth - Chairman & Chief Executive Officer: Thank you.

Craig Huber, your line is open. Craig Huber - Lehman Brothers: Yes. Good morning. Thank you. Two questions. Share buybacks and your stocks at $10 of share. I mean, how confident are you, that you can hit this 8.5% to 9% target next year and what might be timing here perhaps that you would consider doing share buybacks in the next year and half. I mean just give me granular half [inaudible]. Michael I. Roth - Chairman & Chief Executive Officer: We’ve talked about that before. I would love to be in a position of talking about those issues as well, as dividend issues and all this other stuff. We are still in the midst of our turnaround. And I would say we have to have some consistency in our overall performance from a financial point of view. We’ve had good conservations with our rating agencies. As you recall, they took us off negative. And so, I think we are managing our balance sheet and our expectations reasonably well. And I think the point is that we just have to continue to keep our heads down, and deliver consistent results and then we can talk about that. Craig Huber - Lehman Brothers: Also another question. What has changed in your mind in the last year and half, that lowered your target from 10% to 8.5% to 9%? Sounds like it's more on the cost side of investments, is that fair to say? Michael I. Roth - Chairman & Chief Executive Officer: Well I think there are number of issues have occurred. Some of the things that have come up, some of our client losses and impacting that through our regular business operations, taking some staff reductions in some of our units as a result of those client losses has had an impact. I think the fact that we are investing in digital, we added a thousand people in these growth areas, I think that’s having an impact. So if you put it all together… if you remember, we started, when we set the 10% target, we had negative margins. We were looking into a crystal ball. A lot of things has changed in the economy in terms of the rapid pace of which the digital has come up against us. So it is a whole host of factors that affected. Obviously, we are still going to be driving towards double digit margins. I mean, I’m not taking our foot off the accelerator here. But I think what we said was, we went through this turnaround to the extent we had indications and better visibility to where we would come, we would alert everyone to that and that’s what we are doing here. And frankly, I think 8.5%, 9%, given the short period of time we’ve doing this in terms of the turnaround is a pretty good result. I mean, we want to do better and we will do better. But right now I think that’s a reasonable expectation which is why we drew it out there. Craig Huber - Lehman Brothers: And then lastly if I could, earlier on in the call, Mike, you mentioned that you have a few areas you need to work on still at the company. Can you just go through that, just update us on Lowe, the media buying side et cetera, the areas that really will make a difference for next year. Michael I. Roth - Chairman & Chief Executive Officer: Well clearly the emerging markets are an area that we want to focus on. We topped off our investments in India and we are very comfortable with our offerings in India. China continues to be an area that we have to focus on. We have some very good offerings both with Lowe and McCann, of course in China and our specialty agencies as well as Draftfcb, but we have to build on that footprint. Media in China is an area we have to address as well. Lowe, they’ve done a lot of work in Lowe in terms of stabilizing that business. Their creative product continues to be very powerful. The response from their clients, notably Unilever has been very positive in terms of the work they do on a global basis. And we're looking for them to turn profitable in 2008. So that’s an area that we're looking at very carefully. And of course Draftfcb is going through its merger. They have done a tremendous job of integrating the two units and the go-to-market strategy is very powerful in terms of what they are implementing. The team has just come back from their worldwide tour of all the different agencies and rolling out the go to market strategy. So we've done a lot of things during this interim period and all of it we believe is going to be, give rise to growth on a long-term basis. Craig Huber - Lehman Brothers: How much Michael, was your media operation revenues up in the quarter or year-to-date? Michael I. Roth - Chairman & Chief Executive Officer: We don’t disclose media separately, Craig. Craig Huber - Lehman Brothers: All right. Thank you. Michael I. Roth - Chairman & Chief Executive Officer: Thank you.

Fredrick Searby, you may go ahead. Frederick Searby - J.P. Morgan: Thank you. Couple of questions. One in your margin target for next year, 8.5% to 9% can you tell us what you need in terms of organic growth to hit that? And then secondly, question on severance, I don’t know if you said this, the $20 million in severance in the quarter, how much of that was related to GM, did you see? Or was that mostly the Verizon and some of the other account moves that you've seen. And I guess, finally just, are you seeing any… you said that your clients are kind of not pulling back, given some of the problems around the housing market? Have the financial clients at all pulled in or are you seeing any kind of a slowdown there, or any of the verticals that seem to be more troubled? Michael I. Roth - Chairman & Chief Executive Officer: Yes. Let me address that part of it. As I indicated, our clients have not been indicated. Financial services, I think roughly 6% of our business is in financial services and of that, MasterCard is a big piece of it and they're not directly related to the housing market per se, and you just saw the results that they posted. So, I don’t think we're going to see a big impact on that. Although, I think what everyone is feeling that there’s something out there, but we haven’t seen it. And I think that’s what’s happening in terms of all the caution flags that are being raised. But we haven’t seen it directly. And maybe it will hit us as we go through the end of the fourth quarter or into the first. But right now we just haven’t seen it. And the particular sectors that it would be obvious in, do not have a significant impact on us. But it may spill over to other sectors. But right now we don't see it. The revenue targets for 2008 I think what we said is we have to be competitive, we have to continue to be competitive on revenue to achieve our targets. And on the severance and so on, Frank? Frank Mergenthaler - Executive Vice President, Chief Financial Officer: The impact of Verizon on Draftfcb for the quarter [ph] are in the severance line and the impact with respect to the General Motors and SOP [ph] for Lowe are in the restructuring line. Frederick Searby - J.P. Morgan: And Michael, not to beat a dead horse, but what does competitive revenue mean? Michael I. Roth - Chairman & Chief Executive Officer: Well, we had originally started out at roughly 5%, or a little bit better as competitive revenue and that's where we are heading. And I think you know the 4.8% through nine months is pretty close Frederick Searby - J.P. Morgan: Okay, great, thank you. Michael I. Roth - Chairman & Chief Executive Officer: Thank you.

Karl Choi, your line is open. Karl Choi - Merrill Lynch: Hi good morning, I have a couple of questions here. One, looks like a lot the leverage in the O&G line came from the other category. I know there’s a lot of ins and outs, but I just wondered if there’s anything that’s driving that. And second, Frank, I think if I heard your comments about incentive compensation correctly, looks like you are looking for a sequential drop in the fourth quarter, I just want to verify, if that's the case. Michael I. Roth - Chairman & Chief Executive Officer: Hey Karl, on the O&G other, primarily currency, transactional currency impact and with respect to the incentives, your comment is accurate. Karl Choi - Merrill Lynch: Okay. And as far as the behind your margin target for next year, can you just gave us a sense how the U.S. will differ from internationally in terms of your margin that you are looking for, for next year. Michael I. Roth - Chairman & Chief Executive Officer: With respect to the U.S. our margins are very robust now for the most part. So we expect that they will continue to be robust. Frank Mergenthaler - Executive Vice President, Chief Financial Officer: A good component of our U.S. operations are our independents and the margins at a number of our independents are very robust. So that helps. And our organic growth in the U.S. obviously is very sound. Karl Choi - Merrill Lynch: But do you expect the margin gaps to narrow between U.S. and internationally next year? Michael I. Roth - Chairman & Chief Executive Officer: We are expecting that international margins will improve. Karl Choi - Merrill Lynch: Our last question for Lowe, after you talked about some real estate actions that you will be taking for the company, does that really just, is it all tied to the GM loss or will Lowe look a little bit different after the restructuring? Michael I. Roth - Chairman & Chief Executive Officer: Lowe, as we indicated throughout the last couple of periods, Lowe is in the process of focusing their operations on the eight hubs and so on. So all of this repositioning of Lowe is to position itself for the future growth. And certainly all of the actions we are taking are consistent with that. I think they shut 13 of their operations down and repositioned another 13. So this is all consisting with the long-term plan of Lowe to become profitable as well as be competitive in the marketplace. And they are doing a great job in stabilizing and repositioning their offerings. Frank Mergenthaler - Executive Vice President, Chief Financial Officer: And Karl, for some of the other real estate moves, we'll be downsizing certain operations to take lesser space, so that that will have some cost impact positive in '08. There is a number of other moves that are in markets that are escalating and we’ve got lease maturities coming up that we're being proactive in and trying to replace the existing leased with things that are cost effective than the current market's yielding. Karl Choi - Merrill Lynch: Great. Thank you.

Troy Mastin, your line is open. Troy Mastin - William Blair & Company: Good morning. Thank you. Wanted to dig in a little bit on your statement about making remedial investment in the area of digital. I wonder if you can help us understand how much of these investments will hit the income statement next year versus the balance sheet. How long you do you think this extra spending will be required to play catch up maybe with best of breed competitors out there? And maybe if you can quantify this in some form, that would help. Frank Mergenthaler - Executive Vice President, Chief Financial Officer: Well I think, we’ve indicated a CapEx run rate of about a $150 million. And I think we continue to say that that is a good run rate for us, and whatever we would do should fit within those numbers. The impact on our margin is due the salary and talent. And I think that’s what we are talking about in terms of investment. And, yes, and the comment you made on remedial, I mean we are building on a very strong base. This isn't exactly remedial, I mean we have been very competitive in our offerings, and we continue to do so. Troy Mastin - William Blair & Company: Sorry, I think you referred to this as remedial, so just using your words. Frank Mergenthaler - Executive Vice President, Chief Financial Officer: No, I didn’t. Thank you. Troy Mastin - William Blair & Company: I think, I'll check the transcript. Frank Mergenthaler - Executive Vice President, Chief Financial Officer: We both will. Troy Mastin - William Blair & Company: How long you need to make this incremental standing or is this a permanent cost? And maybe I shouldn't even consider it as incremental since it's not remedial. Michael I. Roth - Chairman & Chief Executive Officer: Yes, I wouldn’t call it a permanent cost, but obviously we want to invest in where the money is and if digital, which it will be an increasing component of our business, we will continue to invest in it. The issue is converting those expenses to revenue, and that’s the challenge in the value added that we have. That’s why these tools and the analytics that we are investing in are so critical for the future, because as I meet with clients… and remember I used to be on the other side, we want to make sure that the work that we are doing is having an impact and it’s this investment in the tools and resources that will enable us to further refine our offerings, and show an impact. So that’s part of our business right now. And right now it's costing us some money to do it, but it's money well spent for the long term viability of our businesses. Troy Mastin - William Blair & Company: And that investment in technology and tools would show up in that CapEx, I would assume. Michael I. Roth - Chairman & Chief Executive Officer: No. Only on the acquisition side, the rest will be running through our P&L, which is one of the reasons, there will be some pressure on our margins. Troy Mastin - William Blair & Company: Okay. And you mentioned something about a small number of scarce capabilities, that must be shared across agencies, and I think you were referring to digital here as well. I wonder if you could maybe give a little bit more color to that. If this is something you are doing now, how do you attack this challenge in trying to share our across all your children. Michael I. Roth - Chairman & Chief Executive Officer: The best example, well put. The best example of that is our recent acquisition of Reprise Media. When we had our operating reviews, all of our people, at the end of the review, when we ask them, what are you missing and what can we do and then originally we felt we can build our own search capabilities, they all said it would be great if we can have a world class search capability. So we went out and acquired Reprise Media. And now, where do you put Reprised Media as an asset of IPG. Obviously, if you put it into one of our global networks they certainly would be very busy. But this is an offering that we want to make sure is available to all our clients, and of course all our networks. So when we do a Reprise Media, we put it in as an IPG asset and they work across all our different networks. That’s where we talk about in terms of a scarce resource. And when we see that, we want to make it available to all our clients and all of our networks. Some of our investments, whether it be our investment in Facebook or whether it be in some of the Emerging Media Lab type stuff, the Emerging Media Lab is available across networks. So we have to do both. And obviously each of our networks are looking at the issue of do they have their own capabilities, such as the World Group which historically is always had a very robust internal capabilities or do we have a shared responsibility in an IPG level. And that’s always our dialogue with all of our networks. Troy Mastin - William Blair & Company: Okay, good. And then one final question. You mentioned some project I guess or maybe some projects that were pushed in the UK from Q3 to Q4, I believe this year. I wonder if you could give a little more detail on what type of work this was and help us with the magnitude. Michael I. Roth - Chairman & Chief Executive Officer: It was related to an automotive car show, and magnitude in dollars, we haven’t disclosed. But for that segment and that geography, it's relatively meaningful. Troy Mastin - William Blair & Company: Would growth there have been positive, had that not happened? Michael I. Roth - Chairman & Chief Executive Officer: I think it would be closer to flat. Troy Mastin - William Blair & Company: Right. Okay. Thank you. Michael I. Roth - Chairman & Chief Executive Officer: Thank you.

Katrina Bowen [ph], your line is open.

Good morning, gentlemen. You gave a break down in the metrics supplement between revenue from marketing services and advertising and media. I am wondering, if you can also tell us a little bit about the margin differences between those two segments and what kind of growth we are seeing in each of those two segment margins? Michael I. Roth - Chairman & Chief Executive Officer: On the advertising components, the margins that we currently have are higher. And when you look at some of the marketing services components, you have got to go deeper into that. Our PR margins are very robust and some of our project related businesses there are a little bit thinner. And I think what we have seen in the past year is, on the marketing services side we are seeing improvements of those margins and those margins need to continue to improve for us to meet the targets we put there for ’08.

Okay. And then also it looks like your revenue per employee has been kind of slowly increasing. What is the main driver behind that and where do you expect that to go by the end of 2008? Michael I. Roth - Chairman & Chief Executive Officer: Well, obviously all of that is embedded into targets that we have out there and that we are giving you. I mean that’s a good thing to see that improving. And the way you get there is by obviously organic revenue and even though we are adding people we are adding revenue and client facing people as opposed to non-client facing people. So we manage that very carefully, and that’s a good metric. I think that’s a great metric to look at in terms of our overall trajectory.

Is there anything different in the way that you are negotiating contracts with clients around the pricing so that you can be sure to get the type of margins you need to get per deal or per client, or is it very difficult? Michael I. Roth - Chairman & Chief Executive Officer: That’s a great question, because one of the things… we talk about all our professional fees and how high they have been the last few as we went through Sarbanes-Oxley and how we get that behind us, we have had tremendous additional visibility into all of our business as a result of the strength of our financial organization, both at the networks as well as the overall financial organization. That has enabled us to take a real deep dive into a lot of our contracts, existing contracts and new contracts, so that we get paid for the work that we are doing. Historically, that was an area that, because we didn’t have the controls in place that were necessary, we felt we were leaving money on the table. So what we are seeing right now is greater visibility into the contract negotiations and profitability of our contracts, and that has enabled us to basically get paid for the work that we are doing. The scope creeps that’s prevalent in our business is an area where there are real dollars out there and if you have the resources and the financial wherewithal to dive into that, we see that as a big opportunity. So we are seeing much better visibility in that both in new contracts as well as existing contracts. Frank Mergenthaler - Executive Vice President, Chief Financial Officer: Another area of opportunities is just the whole digital pricing model's evolving. We are all rapidly adding digital talents and that’s driving growth and the pricing model needs to be further refined from, respect to what is commodity in that space, what is value add and premium billing for that value add. And I think we are all kind of learning as we go along, but that’s going to evolve over the next 12 months to 18 months.

Great. And is there also a difference in perhaps the margin that you are able to achieve on the digital contracts, maybe there is still a disconnect between what you can charge a client and what you need to pay or to pay employees. Are we still kind of on the employee benefits, more kind of side of that? Michael I. Roth - Chairman & Chief Executive Officer: Well, a lot of this work is consultive as opposed to the traditional advertising where you get a rate per FTE. So in that respect, there's an opportunity for greater margins. Ultimately as this becomes more embedded into what we do, then procurement people get involved and we get into an FTE model. But there is no question that the value add as a result of this is clients' need and are willing and able to pay for it.

Great, thank you very much. Michael I. Roth - Chairman & Chief Executive Officer: You are welcome.

I show no questions. Michael I. Roth - Chairman & Chief Executive Officer: Well. At this point, I want to thank you all for your support. And we look forward to addressing our results for our fourth quarter in the next call. Thank you very much.

Thank you. That concludes today’s conference. Everyone may disconnect at this time.