MCCANN TOPS REGIONAL RANKING;SHOPS SUFFER IN EUROPE BUT LATIN INCOME UP,AND ASIA BRIGHT SPOT

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McCann-Erickson Worldwide once again came out on top of Advertising Age International's 1994 geographical rankings by gross income, holding its position for the second consecutive year as the leading multinational agency network in Asia, Latin America and Europe.

While McCann technically held the No. 3 slot in Europe and Asia, in both cases it trailed regional networks. In Asia, Dentsu and Hakuhodo unsurprisingly held the No. 1 and 2 slots, but McCann's 10.5% jump in gross income in the region made it the leading multinational there.

In Europe, McCann's gross income actually fell 3.5%, but that was good enough to place it third behind leader Euro RSCG and No. 2 Publicis. McCann led all local and multinational competitors in Latin America, with a 14.5% rise in gross income.

Every agency in the rankings posted positive-and even astoundingly high-gross income gains in Asia. Saatchi & Saatchi Advertising, for example, was up an enormous 55.5%-attributed to its strong Chinese operations. J. Walter Thompson Co., buoyed by its win of Nike in China, shot up 21.1%.

McCann's Asian growth was stunted by the still rocky economy in Japan. "Unlike other Western agencies, about 60% [of our Asian income] comes from Japan," said Marcio Moreira, McCann's New York-based vice chairman-regional director Asia-Pacific. "If we exclude the Japanese numbers our gross income would be up in the 50 and 60 [percent range]."

For the same reason, agency executives predict Japanese agencies, particularly Dentsu and Dai-Ichi Kikaku, will expand their operations outside Japan this year.

Mr. Moreira said McCann's income was lifted in Asia by new business from Nike in Japan, Bacardi in Australia and additional Nescafe assignments Down Under.

Andy Allen, exec VP-international operations, Bozell, New York, agreed that Asia's strong prospects have counterbalanced the floundering economy in Japan. "Asia is still the growth area of the world," he said, adding that "the real place to watch is India."

Most agencies posted solid gains in Latin America, largely attributed to strong economies in Argentina, Venezuela and especially Brazil. "Brazil's [economy] by our measure was up 56%," said Kerry Rubie, Leo Burnett Co.'s group president, Europe, the Middle East and Asia. "Brazil for the first time had some political stability and a confident electorate."

"Growth was broadly diversified throughout the region, though it was particularly up in Argentina and Brazil," said Frank Clarke, area director for Grey Advertising, which boosted its gross income 15.9% in Latin America last year.

The forecast for the region is less bright for '95, however, particularly considering the blow the devaluation of the peso is doling out to agencies in Mexico (see related story Page I-16).

Jens Olesen, executive VP for McCann-Erickson and regional director in Latin America, said that the agency expects a 30% slide in billings this year. Even with that stunning decline, however, he expects the agency to "take less of a beating than others," in 1995.

In Europe, despite impressive new business gains, seven of the top 10-and 14 of the leading 20-networks saw their gross income fall last year.

Hardest-hit were the Paris-based networks, hit by the double whammy of lingering recession and the impact of the first full year under the Sapin law that has drastically slashed media buying profits since April 1993.

"The slow recovery of the [French] economy no doubt also contributed to the drop in French billings," said Philippe Legendre, research director at the French Association of Advertising Agencies. "But the major culprit is the Sapin law."

Double digit drops ranged from 18.1% for BDDP and 12.3% at Publicis-owned FCA, ranked 15 and 19 respectively, to 10.1% for Europe's top agency network, Euro RSCG. No. 2 Publicis fared best among the French but was still down 5.7%.

"In terms of profit, France will never be what it was," said Fernan Montero, president-CEO, Young & Rubicam Europe.

Todd Pruzan, Jo Bedingfield, Bruce Crumley, Juliana Koranteng and Laurel Wentz contributed to this story.

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