It's surprising to say the least that the Hong Kong 4As has again
chosen not to reflect the huge changes that have taken place in the
advertising business in this year's agency rankings.
These changes have fundamentally altered the very fabric of the
industry, from the continued fragmentation of media to the hiving off of
media functions, the rise of the internet and the increasing importance
of marketing communications.
And now, despite client reluctance, the latest seismic shift to occur is
the move away from commissions to fee-based remuneration. Yet the manner
in which the 4As has chosen to take these changes into account can only
be described as jurassic - it has simply grouped the diverse revenue
streams as production income, a category which is growing faster than
media, traditionally the key revenue earner. However, an increasing
number of agencies are earning their livelihood from fees.
Coupled with this, agencies are pulling in revenue from a variety of
sources - marketing, PR, direct, interactive, below-the-line and so on -
in addition to advertising and media. This change will only become more
entrenched in the years ahead. For the first time, WPP and Omnicom's
non-advertising income has overshot their advertising revenues.
Yet in Hong Kong, there is no other category except production to
reflect changing revenue streams. Since the situation has been on the
boiler for some years now, it's in the interest of agencies that the 4As
rectify the oversight immediately if it truly wants to represent the
industry as it evolves and grows.
One possible solution involves the setting up new categories to account
for the different disciplines. Another would be to report figures on the
basis of business units. Whatever way it chooses to format the rankings,
it's essential that the 4As act this year to reflect the changes in time
for next year's compilation. Failure to do so will only provide fertile
ground to sow more challenges, as Saatchi & Saatchi has done over Ogilvy
& Mather's rise to the top of the China rankings.
