How Ad Age ranks agencies

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The 14th annual Advertising Age Marketing Services agency report defines marketing services as sales promotion and direct marketing.

This rubric for marketing services is hardly just "traditional" forms of sales promotion and direct marketing. It includes event marketing, sponsorships, entertainment marketing, sports marketing and interactive when used in support of direct marketing and sales promotion.

Marketing services agencies are ranked by the sum of revenue generated from the two specialties of sales promotion and direct marketing. But if that sum is 75%-plus of total agency revenue, the agency total supplants the marketing services tally. Internal operations is excluded from these numbers.

Ad Age includes a column for total U.S. agency revenue to show the totality of an agency's business. A number larger than the marketing services total indicates the agency has other advertising revenue streams. This column also includes internal operations-businesses that typically include printing, database management, digital imaging, internal telemarketing and manufacturing, from toys to widgets.

Yellow Pages, a highly specialized medium, is not in the revenue mix for direct. AA presents the top 10 YP agencies (see chart below) based on figures submitted to the Association of Directory Marketing. These 10 account for 60% of YP's $2.2 billion in national billings.

Agency parent is shown in brackets in the chart. Only 39% of the marketing services revenues reported in the ranking are attached to "independent" agencies.

Agencies provided marketing services data on Ad Age's Agency Report questionnaire. The Agency Report was published April 23.

Revenue is the sum of fees plus the commissions earned from media billings and the mark-up on materials and services. Revenue is often called gross profit (i.e. net sales less cost of sales) by marketing services agencies.

AA maintains the integrity of its chart entries from year to year by treating acquisitions and divestitures on a pro forma basis as if their full-year totals were on or off the books for two consecutive years.

Staff for this report: R. Craig Endicott, DataCenter editor; Kevin Brown, Group data manager; Scott MacDonald, Mark Schumann, Jodi Less and Philip Montgomery-Fleming, research coordinators; Jennie Sierra, special assistant, and Kenneth Wylie, writer/consultant.

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