It's Wall St.'s Madison Ave.

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Now that wall street has taken over Madison Avenue, agencies controlled by public companies are firing staff-in part to deliver the results holding companies promise investors. It's easy to fear this profits focus will damage morale, creativity and the product that agencies produce. The bottom line, though, is public ownership is good for agencies and clients.

Public ownership, to be sure, comes with financial costs. Agencies must live with the cycle of quarterly earnings and manage revenue and profits accordingly. Private agencies, meanwhile, could try to ride out a short-term down market, retaining full staff despite lower business volume in the hope such a move would translate to improved morale, better work and better results for clients.

There also are non-financial costs, such as the bureaucracy of large corporations and the issue of managing client conflicts that come when an agency is part of an advertising conglomerate. But benefits far outweigh costs.

Clients want global resources and media buying clout, and they often want to integrate their advertising, direct marketing and PR. A growing number of multinational marketers, such as Ford Motor Co. with WPP Group, in effect have hired holding companies, giving advertisers flexibility to shift assignments inside the family. Public ownership gives holding companies access to the capital to do all of that. Public ownership also gives agencies the currency of publicly traded stock with which to reward employees. A stock that keeps growing over the long haul is a fine employee motivator. And a stock won't keep growing unless a company manages its finances.

In this downturn, the imperatives of stock exchanges in New York, London or Paris will mean a harsh schooling for some of the formerly private shops now absorbed by publicly held owners. Expense slashing may jeopordize long-term opportunity for a few, but in the end, public ownership is a good thing for Madison Avenue.

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