Advertising Week's budget planned for expenses between $1.3 million and $1.4 million, with expected revenue of about $1.2 million, said Kipp Cheng, VP-director of public affairs at the American Association of Advertising Agencies, in a midweek interview. But actual expenses were coming in "closer to $1.5 million," he said. Subtract the roughly $1.2 million revenue-"committed money" received or expected from sponsors and others-and the Week was looking at a loss of about $300,000, he said.
"There's a discrepancy [between expenses and revenue] that will need to be paid for by the 4A's," pending board approval, Mr. Cheng said.
The 4A's board was to take up the issue of the loss Sept. 28 at a regularly scheduled board meeting, he said. Assuming board approval, the money probably would come from the 4A's reserve fund, he added.
But it's unclear just how final finances will shake out. Mr. Cheng on Sept. 23 retracted all the financial figures he had given Ad Age, saying all the numbers he had provided were incorrect and that he wasn't authorized to discuss finances. Advertising Week couldn't provide new numbers because expenses still were being tallied and revenue still was coming in, he said.
"From the beginning, the 4A's-with support from our board-has been committed to making whatever investment necessary to see that Advertising Week in New York City succeeds," Mr. Cheng said. "We see it as an investment in the future of our industry."
Mr. Cheng noted the Week never was intended as a moneymaker. Given that this was the inaugural event-and a massive undertaking-some loss wouldn't be surprising. Advertising Week organizers played up the Week's economic boost to New York, citing a city Economic Development Corp. report that visitors to Week events would spend $55 million in the city. The city said Advertising Week drew 40,000 out-of-town visitors, with 60,000 people attending the Week's events.
Mr. Cheng said he wasn't aware of any concerns among 4A's members about the Week's financial issues. "People are happy and pleasantly surprised that everything's been moving as smoothly as it has" at Advertising Week, he said.
The 4A's conceived and helped bankroll the week-long event in New York, though the city is home to just 13.8% of the trade group's 437 member agencies. Mr. Cheng said the 4A's New York-based shops account for the lion's share of ad agency employment and revenue as well as 4A's membership dues. Nine of the nation's 10 largest ad agencies on Ad Age's annual ranking are based in the city.