Tuesday, August 21, 2007

Playing Favorites With Award-Winners

Martin Sorrell,

Welcome to a World of Rankings:
Ad Agencies, PR Firms
Ranked by Awards Won

by Jack O’Dwyer

The WPP Group, saying that number of awards won and profits are “strongly” related, cites numerous awards its units have won including 595 by Ogilvy advertising. This is a poor trade-off: number of awards won in place of revenue and employee counts for these units.


The annual report of the WPP Group (JWT, Ogilvy advertising, Hill & Knowlton, Burson-Marsteller, Cohn & Wolfe) provides no information on the revenues or staff counts of these units but instead makes dozens of references to industry awards they have won.

Ogilvy One ad unit, for instance, is said to have “won 595 local and international awards, topping 2005’s stellar total by 20.”

The JWT ad group won 35 “Lions” at the Cannes ad festival, “up from 17 in 2005.”

“This performance helped JWT rocket up the Gunn Report in 2006, from ninth place to fourth place,” says the WPP report (Gunn combines the winners of 53 local and international contests).

Awards from The Holmes Report, online PR newsletter, are cited by H&K, Ogilvy PR and Cohn & Wolfe. Holmes is referred to as “prestigious” and “the industry’s leading publication.”

Awards given by PR Week/U.S., owned by Haymarket, the U.K.’s largest private publisher, are also cited as are awards from the Wall Street Journal, AdWeek, Business Week and Advertising Age plus numerous private award contests including the Effies, Clios, Caples, One Show, Won Report (U.K. firm that tracks awards for direct marketing and digital ads) , Cyberwon Report and the Forrester Wave (compares vendor offerings).

Awards a Poor Substitute for Numbers

WPP and the four other holding companies (Omnicom, Interpublic, Publicis, Havas) engineered a massive withdrawal of information when they stopped reporting billings and staff counts of their hundreds of ad and PR units. Possible run-ins with Sarbanes-Oxley were cited.

But Tim Dyson, CEO of publicly-held NextFifteen, owner of Text 100 ($53M in fees), said he examined sections 302, 404 and 409 of SOX and could find “no good reason” why the revenues of individual units [of the ad conglomerates] could not be reported.” He said the Big Five were using SOX as a “fig leaf” to hide the true figures.

Publicly-held Cossette Communications of Toronto, which owns PainePR, Irvine, Calif., reports Paine’s revenues ($11.4M) and staff count. Canada has its own “SOX.”

WPP Pushes Awards

Says the WPP report: “If you drew a graph plotting creative awards as a proxy for creativity against [profit] margins for any group of agencies, there would be a very strong correlation. The more awards, the stronger the margins.” In other words, WPP is saying awards = profits.
But awards contests are judged by people who may have all sorts of financial, political, advertising and industry pressures on them.

Awards are a poor substitute for billings figures attested to by CPAs; W-3s showing payroll costs; lists of accounts revealing wins and losses; staff counts attested to by CPAs and other financial measurements. There’s an old saying—“Never bet on anything with less than four legs.”
We take all these awards programs with a grain of salt and especially compilations of thousands of awards. The Gunn Report was started eight years ago by Donald Gunn, a former creative director at Leo Burnett. The Report is based in the

OMC Cites Gunn Statistics

The OMC annual report, a mere 75 pages vs. the 188-page WPP report, says that “In the 2006 Gunn Report, BBDO Worldwide, DDB Worldwide and TBWA Worldwide placed first, second and third respectively, as the most-awarded agency networks in the world.”
OMC says this is the third straight year its units have taken the top three spots and that Gunn noted that “in the eight years it has been compiling the results of global creative awards, only one network not part of OMC placed first in the network rankings.” No further details of awards won are provided by OMC.

Creativity magazine also gave the OMC networks the top three spots in its annual rankings of most-awarded agency networks, OMC notes.
The Interpublic annual report, combined with its 10-K report to the SEC, does not mention the topic of awards.

Ogilvy, H&K, C&W but not B-M Cite Awards

Ogilvy PR said it was “deeply gratified” by the results of the 2006 “Agency Excellence Survey” by PRWeek that placed it first in five categories, as rated by 600 clients. This included “Who Would You Likely Hire in a Crisis” and “Who would You Hired as Your Next Agency.”

Ogilvy PR was named “Agency of the Year in
Eastern Europe" in the European Consultancy Report Card 2006 of The Holmes Report.
C&W CEO Donna Imperato calls Holmes “the industry’s leading publication” in noting that the Report said “C&W specializes uniquely among the larger agencies in big brand building ideas and is increasingly capable of delivering the kind of creative concepts that can be leveraged across the entire marketing mix.”
Holmes ranked C&W as one of the top five in its “Best Agency to Work For” survey and the PRWeek “Excellence Survey” ranked C&W in the top five.

The Burson-Marsteller report made no mention of awards contests.
All WPP units reported excellent years and many new initiatives and the holding company reported that 2006, its 21st year, was “our best yet, with key measures exceeding any previous year.” Revenues rose 10% to 5.9 billion pounds and profits before taxes 15% to 682 million pounds (the pound is current worth $1.98). Profits after taxes were 482.6M pounds.

Advertising Age columnist Al Ries has noted that awards are so effective in pitches that the big ad agencies have given up running corporate ads in the ad media (PR media have such ads).
The ad industry, says Ries, “is the only industry that apparently doesn’t believe in advertising…what it believes in is PR.” Most agencies “spend a lot of money promoting their awards to potential clients,” he says.
One problem with ad industry awards, he adds, is that creatives are judges and the awards “are almost never based on results.” Entry forms ignore this aspect.
“Nor are there any consumers on the judging panels—that’s the real tragedy about the awards,” he adds.

How Credible are Awards?

Our question is how credible are these awards if some agencies deluge the contests with entries, paying considerable fees; if they buy full-page ads in some of the publications, and/or spend tens of thousands on award banquet tables and travel to such banquets? Subjective judgments determine winners rather than verifiable dollar and employment figures. Contests are subject to political and financial pressures especially with contestants like WPP putting so much emphasis on winning awards.

While WPP and the other conglomerates have turned their backs on objective measurements, others have not. The 140 independent firms in the O’Dwyer rankings have supplied top pages of income tax returns, W-3s, lists of staffers and other proofs and are reaping as much visibility and more credibility at a fraction of the cost of those proliferating awards programs. We don’t think clients are being fooled by the “awards game.” Ad Age this year named Omnicom’s John Wren as “Agency Executive of the year,” noting OMC had reached $100 (although OMC was $107 in 1999). The New York Times has yet to explore OMC’s beleaguered stock. OMC is now trading around $50 after a two-for-one split.

MAYO Communications manages the West Coast Bureau of O'Dwyer PR Daily, the only daily
publication not afraid to publish the truth about our industry, and sometimes the truth hurts.

MAYO PR - "We don't guarantee media, we just get it!"