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:
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
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.