MEDIA: PERSPECTIVE - Income figures set the record straight for agency activity

It's quite an incongruous little group that catches the media eye

this week. BJK&E, Booth Lockett Makin, CIA, Initiative, Manning Gottlieb

Media and New PHD don't appear to have a lot in common beyond the

obvious. But this week all six agencies are united by one thing:

income.



All six have been confident enough to declare their 2000 income figures

alongside their official billings data in this week's Top 300 Agencies

report. OK, some observers might substitute 'confident' with

'foolhardy', or even 'defensive' (as in 'we are a good business,

honest'). I disagree.



It's not only a brave decision to unveil income, it's also a clear

signal to the rest of the market that these are companies - big or small

- that do not simply scrape a living on rock bottom commissions on one

dimensional planning and buying accounts.



And let's face it, there are some agencies around who still do, and

they're not all two-bits based out in the regions.



Income data is incredibly valuable for a number of reasons, mostly to do

with the failings of billings figures. For a start, I can guarantee that

Campaign will receive a raft of complaints about the billings data

itself. Agencies will moan that there are billings from sponsorship, new

media or even radio, outdoor and press that haven't been included in

their overall figure (which I hope is why some so blithely claim their

billings to be so much more than AC Nielsen MMS attributes to them).



Fair enough. To monitor every single media transaction is impossible.

But if billings data is only part of the picture, then surely income is

a more accurate measure of an agency's media activity and underlying

health. Second, every agency now claims its media activities go well

beyond planning and buying, and that as they mature into services such

as new media, econometrics and strategic advice, billings simply

underestimate the work they do for their clients.



Yet the IPA's Media Policy Group this month took but a few minutes to

dismiss a proposal to encourage media agencies to release their income

data. A year or two ago, I would have supported such secrecy as a way of

deflecting a debilitating emphasis on commission levels. Now agencies

insist fees are more important than commission as they develop deeper

partnerships with their clients and move beyond mere commodity

brokers.



It would be nice to think this is true and income data is at least a

better measure of this truth. It also serves to underline a real shift

in the media industry toward the advertiser's boardroom.



Of course, income data is still not the whole picture and is susceptible

to some manipulation. But if the media industry really wants to move

forward agencies must put their money where their flash brochures are,

and that money has to be income rather than billings.



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