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The annual Advertising Age Agency Report includes four major agency rankings: the world's top 50 advertising organizations, leading U.S. agency "brands," top U.S.-based consolidated agencies and agency rankings within 120 countries.

Each ranking is based on gross income, or revenue, which is 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 for such operations were on or off the books for two consecutive years.

In periods of heavy acquisition, pro forma treatment can boost full-year results based on generally accepted accounting principles.

World's top 50 ad organizations: An ad organization may be either an agency or agency holding company (see chart on Page S-18) and qualifies for top 50 ranking if it owns 50%-plus of itself. The one exception is Dentsu, Young & Rubicam Partnerships, an agency network whose ownership is split 50/50 between No. 4 Dentsu and No. 5 Young & Rubicam.

U.S. agency brands: The ranking of 660 U.S. agencies (beginning on Page S-4) is by agency "brands." 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 25 agency brands (see chart Page S-16).

Consolidated U.S. agencies: The ranking of the top U.S.-based agencies on a consolidated basis (this page) reassembles the multitiered agencies (unbundled for branding) to include all subsidiaries and specialty units, except non-advertising functions such as PR and research.

Rankings in 120 countries: This issue carries 1,566 agencies outside the U.S., each ranked in its respective country by 100% of its gross income in U.S. dollars. (Pages S-22 to S-40). Exchange rates are shown in the country headers. Multinationals may report consolidated operations within a country. Any unit within a composite cannot be ranked separately, though.

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-45).

Media services companies rankings: The top media services 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 independent and inhouse media dependents. (see chart on Page S-12).

U.S. media rankings: The top 10 media services companies are ranked by media bought in seven major U.S. media categories. U.S. agency brands also are ranked by their media volume attributed to these same media categories. (charts on Page S-14).

Ten-year review of top 500 U.S. agency brands: Figures for '98 and '97 are for the this year's top 500 (chart on Page S-16). Other years reflect actual top 500 compositions for those years. Movement in and out of the 500 generally does not cause distortions because it typically affects the bottom of the list.

Staff for this report: R. Craig Endicott, Dataplace editor; Kevin Brown, information services editor; Susen Taras, research editor; Megan Friedly, research coordinator; Larry Edwards, managing editor; Geoffrey Shives, design director; Mike Ryan, editor, Special Reports; Kenneth Wylie, writer; Scott MacDonald, information services coordinator; Sarah Brewster, Josh Hoff and Alisa Polin, editorial assistants.

Data for sale: AA sells selective data from this report. Contact: Kevin Brown,

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