April 30, 2007 DATACENTER 2007 AGENCY PROFILES YEARBOOK DATACENTER 2007 AGENCY PROFILES YEARBOOK AGENCY ProfilesREPORT of the top 50 marketing organizations in this 63rd annual ranking WORLD’S TOP 50 EXPANDED ANALYSIS MORE ONLINE SPONSORED BY Marketing organiza- The activities of Go to DataCenter at tions ranked by 2006 Omnicom Group, WPP our website for more worldwide revenue. Group, Interpublic charts, analysis and Omnicom leads the Group of Cos. and searchable data pack again PAGE 19 Publicis Groupe PAGE 6 adage.com This document, and information contained therein, is the copyrighted property of Crain Communications Inc. and The Ad Age Group (© Copyright 2007) and is for your personal, non-commercial use only. You may not be reproduce, display on a website, distribute, sell or republish this document, or the information contained therein, without the prior written consent of The Ad Age Group. Rev. 2 April 30, 2007 | Advertising Age |2 DATACENTER 2007 AGENCY PROFILES YEARBOOK ABOUT THE YEARBOOK AGENCY PROFILES YEARBOOK is a compan- organizations (beginning on Page 6) and the sum of three components: Fee income, ion to the 63rd annual Advertising Age profiles of all 50 (beginning on Page 21). markup on materials and services, and the Agency Report, published April 30, 2007. The structure of the profiles for market- commissions received for buying media. The printed version provided rankings of ing organizations includes revenue splits Marketing services companies often iden- the world's top 25 marketing organiza- by U.S., non-U.S. and worldwide when tify this number as gross profit, net sales tions, 469 U.S. agency brands, the top 100 applicable, contact information, and signif- less cost of sales. The term “revenue” is marketing services shops, top 50 U.S. icant news of the parent covering 2006-to- synonymous with gross income, the agencies by revenue splits from direct date. Similar content is provided for the barometer of agency activity used in pre- marketing, sales promotion and interac- parent’s major U.S. (and sometimes non- vious Ad Age rankings. tive, rankings by multicultural and U.S.) holdings, whether subsidiaries or Revenue was obtained either via Ad Age healthcare shops, the world's leading affiliated companies. All must be involved questionnaire (found at adage.com/arq), media specialist companies, the top 10 ad in marketing communications. Financial pulled from public documents or estimated agencies by their traditional revenue on a data is omitted on subsidiaries involved in by Ad Age. Ad Age estimates revenue for worldwide basis, and a reprise of the top health care and PR. An asterisk by the most agencies owned by publicly held mar- 10 consolidated agency networks’ chart. name of parent or subsidiary indicates an keting organizations, virtually all of whom All rankings listed above can be found Ad Age estimate. do not detail their financial statements to under “Agencies” in DataCenter in A marketing organization is ranked by the agency level. These agency parents adage.com. Likewise, the methodology its total worldwide revenue if its marketing have not provided revenue on their agency followed by Ad Age for all its rankings is communications activity represents more brands since Congress passed the also available online in DataCenter where than half its total. If the sum of its market- Sarbanes-Oxley Act in 2002. The act is even more extensive rankings are provid- ing communications is less than half, the designed to tighten rules on disclosure and ed for marketing services agencies and parent is represented only by the revenue make the books more transparent. If an their direct, sales promotion and interac- from marketing communications. agency did not provide guidance for esti- tive splits. mates, Ad Age calculated estimates and ran This yearbook provides more details ● Revenue tallies and profiles of 10 of the estimates by the agency. on the printed rankings. It includes: the world's leading independent agency networks. TO REACH US ● A ranking (Pages 19 and 20) of the These independent agency networks Online: world's top 50 marketing organizations are most commonly operated by dues- CLICK for daily marketing news from adage.com by revenue, from Omnicom Group’s supported secretariats that develop serv- $11.38 billion worldwide to Jung von ices to aid member agencies individually CLICK for adage.com’s Customer Service page Matt’s $87.1 million. The cutoff is up and collectively. This leadership unit may from $81.4 million in 2005. also organize “network” pitches for Email: For questions about this report, e-mail These top 50 marketing organizations accounts, most often against multination- [email protected] dominate the advertising universe: Just al agency networks. The 590 agencies rep- Subscription & single copy sales 1-888-288- the top four account for 57.5% of $13.01 resented by these networks had collective 5900; Advertising (212) 210-0159; Classified 1-800-248-1299; Library services (312) 649- billion in revenue from U.S. advertising revenue of $3.05 billion worldwide, up 5476, (312) 649-5329 and media, and adding direct, sales pro- 16.2%, with the U.S. representing $1.51 News offices: New York (212) 210-0100; email: motion, interactive, health care and PR to billion of that, up 7.8%. In the profiles, [email protected], Chicago (312) 649-5200; Detroit that, the top four claim 52.6% of U.S.’s Ad Age lists their network accounts, those (313) 446-0320, Los Angeles (323) 370-2400; San Francisco (415) 459-1401; Washington (202) 662- $28.21 billion universe. held in at least three countries. 7200;London 44-207-457-1400 ● Analysis of the Big Four marketing Revenue for agencies in this report is 63rd ANNUAL REPORT © Copyright 2007 Crain Communications Inc. SPONSORED BY Marketing Intelligence…Wherever, Whenever You Need It Wherever marketing executives go to get their industry news - print, online, streaming video, podcasts, webinars, e-mail newsletters, blogs, mobile - Advertising Age is there. Distinguished by the highest level of journalistic standards, Ad Age offers its audience multi-layered access to the marketing intelligence they need to succeed in today’s ever-shifting marketing and media landscape. Give us a call to discuss the many ways we can develop an integrated, cross-platform program to deliver your brand message to Ad Age’s audience of leading marketing, agency and media professionals. To advertise, contact Jackie Ghedine, National Sales Manager, at 212.210.0725 or [email protected]. © 2007 Crain Communications Inc. f_aa_AgencyReport_AD.indd 1 4/19/07 5:23:18 PM April 30, 2007 | Advertising Age |4 DATACENTER 2007 AGENCY PROFILES YEARBOOK U.S. AGENCY REVENUE JUMPS 8.8% TO $28.2 BIL. SEA CHANGE: Internet drives marketing services gains; JWT top U.S. agency brand; Dentsu leads world chart By BRADLEY JOHNSON ■ AQuantive’s Avenue A/Razorfish was the No. 1 interactive [email protected] agency. AQuantive ranked as the ninth-largest marketing organiza- REVENUE FOR U.S. marketing-communications agencies jumped 8.8% tion, becoming the first interactive operation to crack the top 10. to $28.2 billion in 2006, the strongest growth since ad spending began ■ Omnicom, WPP, Interpublic and Publicis accounted for 52.6% to rebound from recession in 2002. The hot growth came from mar- of revenue for U.S. marketing-communications services. The Big keting services, fueled by digital. Traditional ad agencies, grappling Four’s combined U.S. revenue was split evenly between advertis- with a shift from old media, saw tepid growth. ing/media (50.8%) and marketing services (49.2%). Agency revenue from marketing services rocketed 13.1% to ■ Reliance on traditional advertising varies widely by company. $15.1 billion, the strongest growth since the recession, according to Omnicom last year generated just 42.8% of worldwide revenue from the 63rd annual Advertising Age Agency Report. Agency revenue traditional advertising/media, lowest among the top four; Publicis from traditional advertising and media rose just 4.2% to $13.1 bil- drew 70% of revenue from traditional advertising/media, highest lion, the weakest growth since 2003, the first full year of the adver- among the four. tising recovery. ■ The $1.3 billion purchase of Digitas by Publicis was the largest In 2006, U.S. agencies collectively generated less than half of their acquisition over the past year by a marketing organization, but it was revenue—46.4%—from traditional advertising and media plan- far from the only digital deal. Since January 2006, the Big Four have ning/buying, with the rest coming from a range of marketing serv- bought, or made investments in, more than 20 interactive ventures. ices including digital/interactive, direct marketing, sales promotion, The Big Four last year kept the same worldwide-revenue rankings health care and PR. Marketing services grabbed 53.6% of U.S. mar- in place since 2003: Omnicom, WPP, Interpublic and Publicis. keting-communications agency revenue.That was up from 51.5% in Interpublic was No. 1 as recently as 2000. It fell to second, behind 2005, the first year that marketing services topped Omnicom, in 2001, and third, behind WPP, in 2003. Interpublic could advertising/media. slump to No. 4 in 2007; Publicis, with its faster organic growth and What’s behind the change? No surprise: the internet. U.S. interac- the Digitas acquisition, is coming up fast. Interpublic’s position will tive-agency revenue rocketed 23.1%, driving the increase in market- depend in part on how much progress it makes this year in its stated ing services. But digital is more than interactive shops; it’s an integral goal to achieve organic revenue growth “comparable to industry part of marketing services from direct to promotion. “Interactive is peers … by 2008.” huge,” says Chris Weil, chairman-CEO of Momentum Worldwide, a CONTRIBUTING: KENNETH WYLIE promotions agency owned by Interpublic Group of Cos.