Methodology: How Ad Age compiles this report

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The annual Advertising Age Agency Report includes five major agency rankings: the world's top 100 advertising organizations, leading U.S. ad agency brands, top U.S.-based consolidated agencies, agency rankings within 121 countries and a first-time chart ranking the top 100 U.S. agencies across all advertising/marketing disciplines, including PR.

Additionally, there are rankings of the leading U.S. PR and media specialist companies, and several ad agency specialty rankings including multicultural (Hispanic, African-American, Asian-American), healthcare and business-to-business. The only marketing services (sales promotion and direct marketing) agencies and interactive shops ranked in this report are those of such size to appear in the comprehensive top 100 U.S. agencies across all marketing disciplines. Marketing services agencies will be presented in Ad Age's Marketing Services report May 22, and interactive shops will be ranked in an AA Interactive Media & Marketing report June 19.

Each ranking in this report 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 carried pro forma (returns are on or off the books for two years). In periods of heavy acquisition, pro forma treatment can add substantial bulk beyond the stated year-end results for both years.

World's top 100 ad organizations: An ad organization may be either an agency or agency holding company (see chart on Page S-12) and qualifies for top 100 ranking if it owns 50%-plus of itself.

U.S. ad agency brands: The ranking of 497 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 25 agency brands (see chart opposite).

Consolidated U.S. ad agencies: The ranking of the top U.S.-based agencies on a consolidated basis (see chart on Page S-52) reassembles the multitiered agencies (unbundled for branding) to include all subsidiaries and specialty units, except marketing functions such as PR and research.

Rankings in 121 countries: This issue carries 1,575 agencies outside the U.S., each ranked in its respective country by 100% of its gross income in U.S. dollars. (see chart opposite). Exchange rates are shown in the country headers. Multinationals are allowed to consolidate operations within a country for reporting purposes. Most do this. Any unit within a composite cannot be ranked separately, however.

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.

Top 100 U.S. agencies across all marketing disciplines: The ranking includes all ad agencies, healthcare and b-to-b shops, multicultural, interactive, sales promotion and direct marketing agencies and public relations companies. This chart recognizes the growing interdisciplinary services found across the advertising/marketing industry contained singularly or in multiple variations within agencies. Most agencies now are either multidimensional in specialties and services or will be. Acquisitions have become a favored means of layering dimensionality.

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-50).

Media specialist companies 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-45).

U.S. media rankings: The top 10 media specialists companies are ranked by media bought in seven major U.S. media categories. U.S. agency brands also are ranked by their media billings attributed to these same media categories. (charts on Page S-44).

Ten-year review of top 500 U.S. agency brands: Figures for '99 and '98 are for each year's top 500 (see chart opposite). The composite of the top 500 includes all ad agencies and specialty shops (including those to be ranked in future issues). Movement in and out of the 500 does not cause distortions because it is at the bottom of the list.

Staff for this report: R. Craig Endicott, Dataplace editor; Kevin Brown, data manager; Susen Taras, research editor; Megan Friedly and Scott MacDonald, research coordinators; Jennifer Sierra and Cavanaugh Grey, special assistants; Geoffrey Shives, design director; Mike Ryan, editor, Special Reports; Kenneth Wylie, writer; Ilse Cermak, consultant.

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