LEADER: Time 4As rankings reflected changes

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.

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