’07 Media Agency Report Cards

Media agency competition for new business, always fierce, dramatically intensified in 2007. Clients put $12 billion in media-only accounts up for grabs, compared with some $7 billion the year before, and the major media shops achieved double-digit revenue growth for the sixth consecutive year.

The key for some was new business wins, while others introduced diversified services, organic growth or some combination of all three factors. Overall grades were clustered in the B range, with 9 of the 14 shops receiving some variant of that grade. Statistically that’s not surprising given the fairly small number of shops evaluated (compared to 35 creative agencies).

Most of the planning and buying grades are in the A range, a reflection of the fact that the shops have parity with respect to those price-of-entry functions. Revenue growth across the 14 agencies was slightly higher on average in 2007 than 2006 — 14 percent vs. 13 percent, respectively. Thus, an agency that achieved a 14 percent revenue gain, all other things being equal, would earn a C in the numbers section of its card. Other factors may impact the numbers grade, such as revenue-per-employee figures (an indicator of efficiency) and actual dollar-figure revenue gains or losses (which add some perspective, where agency size is concerned, that the revenue-growth percentage figure does not).

Publicis Groupe’s Zenith Media had the highest revenue gain, 24 percent to $383 million, largely driven by its January Fox win ($750 million) and organic growth. Three shops posted 20 percent revenue growth, including two WPP shops, Mediaedge:cia and MediaCom, and Interpublic Group’s Initiative.