The row over the Recma Institute's annual media agency rankings
appears to have become something of a summer rite in Asia, but the
fracas does highlight the pressing need to overhaul the way league
tables are compiled.
Media agencies have taken aim at Recma, claiming the Paris-based
organisation only asks for billings and then changes them
arbitrarily.
Recma says it is aware of the problems and made minor improvements when
it compiled the 2000 rankings. The bulk of the improvements, it says,
will be felt next year.
This year, for the first time, Recma asked for income figures from
agency head offices for the 2000 rankings. The request apparently fell
on deaf ears. "Very few were willing" to provide the data, according to
Stephanie Cooper, Recma international sales manager.
However, Recma's chief editor Eudes Delafon said he would try to match
figures submitted by agencies with ACNielsen numbers to significantly
improve accuracy for the next round of rankings.
Recma has been using ACNielsen data for several years in Europe, and
extended the partnership to the US for the first time this year.
"This year, we weren't able to use ACNielsen figures in Asia because we
ran out of time but we will do so next year. I also think that agencies
will eventually give us income figures at least for the major markets,"
says Delafon.
"Five years ago in France, for example, very few agencies were willing
to give us income figures, but today they all do because they will be
perceived as hiding something if they don't. It's a slow process so
improvements will take time."
Corroborating income data with third party figures should go some way to
reducing the margin of error.
Says Cooper: "Billings remain a highly unreliable indicator but until a
more accurate one is found, they must be our basis, for what they are
worth.
"Where a network's declared billings are inconsistent, either with
previous declarations or with their networks or the market
staff/billings ratio, Recma occasionally makes an estimate," she
adds.
French agencies may have come around to the idea of revealing their
income figures, but it's going to require immense persuasion to spark a
change in Asia.
Delafon has a theory to explain this reluctance: "The revenue of media
buying and planning agencies is about two to four per cent of their
total billings. Advertising agencies, by comparison, are generating a
revenue of 10 to 12 per cent of the total marketing communications
budget. Given these figures, perhaps the media agencies are ashamed to
show their rate of return."
Another point to consider is that dependent agencies don't want to
reveal the income split with their creative agencies. "They don't want
their inner workings to become public knowledge," an industry observer
comments.
OMD Asia chief executive officer Mike Cooper believes the quality of
Recma's rankings in Asia could be improved if it used ACNielsen Adex
figures for corroboration.
"Of course, Adex doesn't take into account discounts, but it should give
a good indication of the accuracy of figures being submitted," he
argues.
A contentious point of this year's rankings is Zenith Asia's 169 per
cent billings boost, which was recorded despite the loss of the massive
Procter & Gamble media buying account. Starcom snagged the account,
which was estimated to be worth US$160 million.
Zenith Asia chief executive Antony Young explains that this is because
the agency's 1999 billings were understated, which resulted in a triple
digit year-on-year growth rate.
Recma's Cooper puts this down to a "network error in the declaration for
1999", which she claims was subsequently rectified in co-operation with
Zenith.
However, MindShare China chief executive Chris Walton expressed
incredulity at the process. "Recma asks us for figures - unaudited
figures - but when the numbers are published, they are different to what
has been given to them. I don't understand how they arrived at their
figures."
By way of explaining the discrepancies, Recma's Cooper says: "Recma
defines billings as the annualised value of media purchased on behalf of
clients before agency discounts.
"Our questionnaire requests net billings, however, the figures provided
by the networks are sometimes not consistent with former declarations
and with figures for staff increase."
While Zenith might be satisfied with the latest rankings - and it should
be having taken pole position - its rivals charge that the rankings will
not present the region in a true and fair light.
Universal McCann and MindShare are both puzzled over the exclusion of
two sizeable markets - Japan and India - in the final Asia-Pacific
count.
Both agencies claim that the inclusion of the two countries would have
significantly improved their position.
MindShare insists that it would have retained its top ranking with the
addition of hundreds of millions of dollars to its Asia-Pacific
tally.
Universal McCann executive vice-president and regional director, Allan
Medforth, adds: "The exclusion of Japan and India gives figures for us
and our competitors which bear no resemblance to what we think is
happening in this part of the world."
Recma says it excluded both markets in the interest of accuracy and
fairness because the buying power of the unbundled multinational media
agencies is weak or still in its infancy there.
Another problem Recma will need to resolve is the double counting issue,
according to Carat Asia-Pacific chief executive David Liu.
"One agency does the planning but claims the buying part, while the
buying agency also claims the buying part.
"It can be argued that both have a right to claim the buying part, but
the latter more than the former. However, there aren't any procedures to
resolve this and the figures could reveal a market that is double what
it really is," says Liu.
The arguments and counter arguments have been lobbed and the impetus to
change in the interests of accuracy and accountability is clearly in
Recma's interest.
Says OMD's Cooper: "If there is no accountability or transparency, the
whole Recma exercise will just be a sheet of paper you fill in with
whatever number you want."
HOW AGENCIES MEASURE UP IN ASIA-PACIFIC (billings, usdollars m)
Rank Networks Total Australia New SE
(Owner Groups) Region Zealand Asia
1 Zenith Media (Cordiant) 1,782 660 - 313
2 MindShare (WPP) 1,730 225 - 550
3 Starcom MediaVest SMG (Bcom3) 1,504 500 - 323
4 OMD (Omnicom) 1,470 510 - 415
5 The Media Edge (WPP) 1,156 410 45 418
6 Initiative Media (Interpublic) 1,110 700 - 410
7 Universal McCann (Interpublic) 957 208 20 320
8 Carat (Aegis) 554 138 30 108
9 Optimedia (Publicis) 433 246 24 163
10 MediaCom (Grey) 312 125 15 97
11 CIA (Tempus) 213 - - 100
12 Media Planning Group (Havas) 135 - - 42
Rank Networks Hong China Taiwan South
(Owner Groups) Kong Korea
1 Zenith Media (Cordiant) 273 464 72 -
2 MindShare (WPP) 220 447 258 -
3 Starcom MediaVest SMG (Bcom3) 117 299 158 107
4 OMD (Omnicom) 244 165 72 6
5 The Media Edge (WPP) 43 138 71 31
6 Initiative Media (Interpublic) - - - -
7 Universal McCann (Interpublic) 72 169 72 96
8 Carat (Aegis) 52 123 103 -
9 Optimedia (Publicis) - - - -
10 MediaCom (Grey) 25 50 - -
11 CIA (Tempus) 65 - 48 -
12 Media Planning Group (Havas) 35 58 - -
Source: Recma June 2001.
