Methodology: How Ad Age compiles these rankings

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The 57th annual Advertising Age Agency Report includes five major agency rankings: the world's top 100 advertising organizations; the leading U.S. and world ad agency "brands;" the top U.S.-based consolidated agency networks, and the agency rankings within 124 countries.

Additionally, there are rankings of the leading PR and media specialist companies on a U.S. and worldwide basis, and rankings covering multicultural and healthcare specialty agencies.

Agencies with substantial marketing services (defined as direct marketing and sales promotion) but with less than 75% of returns attributed to those specialties are ranked in this report. Agencies drawing gross income of 75% or more from marketing services are profiled only among the world's top advertising organizations.

These shops will be covered more thoroughly in Ad Age's Marketing Services Special Report May 21, and an AA Interactive Media & Marketing report May 7.

Each ranking in the Agency Report is based on gross income, the sum of commissions on media billings, markup on materials and services and fees.

Parent agencies or holding companies consolidate returns equal to a unit's percentage ownership

(equity). Unless explained otherwise, acquisitions and divestitures are treated pro forma as if returns were on or off the books for two consecutive years at full-year returns. This shows organic growth.

World's top 100 ad organizations: An ad organization may be either an agency or agency holding company (see chart on Page S-18) and qualifies for top 100 ranking if it owns 50%-plus of itself.

U.S. ad agency brands: The ranking of 496 U.S. ad agencies (beginning on Page S-2) is for ad agencies, including healthcare and business-to-business shops. This "brand" chart previously ranked ad agencies and all specialties. Agency branding identifies the core agency by stripping the contributions from subsidiaries and specialty units. This is carried into the international arena with branding of the world's top 10 agency brands. (See chart opposite.)

Consolidated U.S. agency networks: The ranking of the top U.S.-based agencies on a consolidated basis (see chart on Page S-20) reassembles the multitiered agencies (unbundled for branding) to include all subsidiaries and specialty units, except non-agency marketing functions such as PR and research.

Rankings in 124 countries: This issue carries 1,588 agencies outside the U.S., each ranked by country by 100% of its gross income in U.S. dollars. (See chart beginning Page S-12.)

Average annual exchange rates for both 2000 and 1999 were provided all participants in this year's survey. Those rates are listed in the bars defining the country and currency in the international listings.

Multinationals are allowed to consolidate operations within a country for reporting purposes. Most do this. A unit within a composite is not ranked separately.

In the country charts, ownership status of a parent agency for each shop is displayed next to the shop's name: MJ, majority owned by another agency; JV, joint venture 50/50 owned; MN, minority owned; NE, non-equity affiliate; NA, equity not applicable or agency is independent.

Public relations rankings: The top 25 U.S. public relations companies are ranked by U.S. fee income and worldwide fee income. The parent ad organizations of these companies also are ranked by their U.S. and worldwide PR returns. (See chart on Page S-34.)Data for the PR charts were provided by the Council of Public Relations Firms, whose methodology also treated acquisitions and divestitures as if they were on or off the books for two full years.

Media specialist rankings: The top media specialist companies, independents and inhouse media dependents, are ranked by U.S. and worldwide media purchases. Parent ad organizations of these companies also are ranked by their worldwide media returns from these media specialist companies. (See charts on Page S-27.)

U.S. media rankings: The top 10 media specialists companies are ranked by media bought in eight major U.S. media categories. U.S. agency brands also are ranked by their media billings attributed to these same media categories. (See charts on Page S-27.)

Ten-year review of top 500 U.S. agency brands: Figures for 2000 and 1999 are for the top 500 (see chart opposite), including sales promotion and direct marketing. Unlike last year, this year's composite excludes interactive agencies.

For the most part, these shops don't or won't break out marketing-related activities, AA's criteria for determining the revenue stream to be ranked. As a result, totals reported in last year's issue are quite different from those reported this year for 1999. (Each year Ad Age collects two years of data so the comparable year will reflect the same agency universe.)

Top 25 U.S. cities by billings: The agency universe for the market billings' chart (see chart opposite) did not include sales promotion, marketing services, direct marketing or interactive agencies.

Staff for this report: R. Craig Endicott, DataCenter editor; Kevin Brown, Group data manager; Jodi Less, Scott MacDonald, Philip Montgomery-Fleming and Mark Schumann, Research coordinators; Jennie Sierra, Special assistant; Rick Gordon, Viewpoint editor; Ken Wylie and Ilse Cermak, consultants.

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