Top 300 Agencies: Diversify or die

The past year was characterised by agencies expanding into other disciplines, reflected in the all-inclusive School Reports.

Unless this is the first Top 300 you've ever read, you'll notice one big change this year. We've torn down the walls of segregation and pooled agencies of all disciplines and descriptions into one bumper School Reports section.

The reason is simple, the reality complicated. The agencies we've profiled (which are, we believe, the most influential in the business) increasingly overlap in what they do and an awkward few are just impossible to pigeonhole.

Michaelides & Bednash, a communications planning agency that also does creative work, has always looked uncomfortable lumped together with the media shops, but it is no more an oddball than The Ingram Partnership, a strategic brand and communications consultancy, which sits in a class of its own.

In 2004, the blurring of boundaries continued. "Advertising" agencies such as Clemmow Hornby Inge launched direct marketing arms and, through joint ventures with the likes of Naked, added communications planning to their armouries. The digital agency Tribal DDB even tried its hand at making TV ads.

Agencies have been investing heavily to broaden their offerings and keep up with where they think clients will spend their money. This process gathered momentum in 2004 and helped us pick the leaders from the laggards and calculate our endlessly debatable agency scores.

Of course, new-business success, creativity (and, yes, we mean non-"creative" shops too), stability, growth and whether we believe the agency is where its management wants it to be, matter equally when it comes to giving a mark out of nine. Even so, last year there seemed to be more pressure than ever on agencies to change or risk appearing hopelessly out of date.

According to last month's IPA Bellwether Report, an even bigger slice of clients' budgets will be spent below the line at the expense of traditional advertising - all the more reason for ad agencies to beef up their direct marketing resources. Meanwhile, every direct agency worth its salt is trying to master a medium that can no longer be politely ignored: the internet.

There's no question that, in 2005, despite a pervading sense of optimism that the year will be the most prosperous since the heady days of 2000, those who remain blindly faithful to the old agency model will look dangerously exposed.

HOW THE TOP 300 IS COMPILED

The compilation of the Top 300 tables is an ongoing process, with a special Campaign survey sent to agencies three months before publication.

Agencies on Nielsen Media Research's database were contacted - this year, for the first time, via e-mail - and asked to complete a questionnaire giving income, billings, number of accounts held, accounts won and lost and the media split of their billings. The media measured in all tables in the report include TV, display press, radio, cinema and outdoor (outdoor does not include airports, ambient, international sites and point-of-sale).

Direct marketing and internet spend is also not included, hence the low billings figures for most of the direct marketing agencies featured.

Returning a form does not in itself guarantee inclusion.

Agency client assignments are compiled from data supplied by agencies and media owners on a regular basis, alongside information published in the marketing press. Figures are estimated costs based on a number of factors including rate card, discount factors and viewing figures. Press expenditures include an Advertising Association discount factor, varying by sector and quarter.

Not surprisingly, agencies lobby hard to influence the way the data is presented; the Top 300 tables, School Reports and scores can affect everything from share price and client perception to staff motivation. But objective representation of the dynamic agency market is crucial, so the tables are rigorously checked and analysed to ensure that the data presented is a fair reflection of the information provided to us.

Nielsen Media Research has used the same measurements as the previous year for consistency and agencies are listed according to the trading names they used in 2004.

The Top 300 has, once again, been affected by the Sarbanes-Oxley Act in the US, which prohibits public release of unaudited financial information.

Sarbanes-Oxley has led many agencies owned by holding companies publicly listed in the US, such as Omnicom, Interpublic and WPP, to withhold financial data; hence the absence of declared billings and income data this year.

Campaign would like to thank Nielsen Media Research for its help in compiling these tables.

To ensure receipt of a copy of the next survey, please e-mail: nmr.communication@nielsenmedia.co.uk.

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