Are billings really “bollocks”?

As Campaign release the annual top 100 agency rankings, Dominic Mills, a past editor of the magazine, remembers once having a livid agency boss scream into his ear that judging performance based on billings was nonsense. These days, Mills is inclined to agree and argues that in the current ecosystem, a good creative or media agency is about much more than ads or media spend…

This is always a tough time of year to be in the editor’s chair at Campaign, and I speak from many years’ personal experience.

That’s because March always sees the publication of the annual agency rankings list for the previous year, based on Nielsen’s figures, together with the school reports – Campaign’s assessment of the performance of individual agencies complete with a mark out of ten. This Thursday, all will be revealed.

The former is objective and a matter of public record. People may disagree with the Nielsen methodology, but at least it’s the same for everyone.

The latter is subjective, some might say highly so, and invariably generates a response and often violent disagreement. It goes without saying though that the two are linked. Campaign’s assessment of agency performance includes the stuff you’d expect: wins, losses, hirings, firings, awards, work and developments such as the launch of new services and so on.

But it always comes back to billings. An agency with falling billings, no matter what the circumstances, gets a low score; an agency with rising billings, even if it has been handed network business without lifting a finger, gets a good score.

So I was greeted first thing one Thursday morning by an agency boss screaming in my ear: “Billings is bollocks.”

His point was that billings were not a true measure of an agency’s activity since, increasingly, they were doing things that did not result in media spend measured by Nielsen. What might this be? Well, it could range from consultancy or strategy to design to brand architecture to web design or even media spend outside the UK.

Moreover, agencies were keenly pursuing this sort of work for two reasons; one, because it was higher margin than more commoditised creative or media work; and two, because it usually got them closer to the CEO and therefore a seat at, if not the top table, a higher one.

But as billings were the accepted currency, I wasn’t going to kowtow to him. “You would say that, wouldn’t you,” I responded, before listing all his agency’s business losses and its feeble new-business record.

In my head, though, I knew he was right.

Judging by Campaign’s attempt to trail this week’s School Reports issue, things haven’t changed much.

However, if anything, the amount of non-billing work agencies do for clients has increased: app building, data analysis, social media, virals, even PR. And that’s before you even get to measuring digital spend, which is either a fraction of its analogue equivalent or fails to register at all.

In the current ecosystem, a good creative or media agency is about much more than ads or media spend.

Over the years Campaign has attempted to circumvent the ‘billings/bollocks’ issue, including asking agencies to submit audited income figures, but given Sarbanes Oxley and the sleight of hand that allows multinationals to move money around so as to mask their true levels, that never really caught on either as a method of ranking performance.

So everyone is stuck with billings, even though they all know it’s bollocks.

How Group M wants to climb the value chain

If there is any type of agency that is surgically attached to billings as a measure of virility, it’s the media agency. For them, size is everything.

Paradoxically, since media buying is the most commoditised business there is, billings is the thing they need to wean themselves off.

A new initiative by Group M to launch a consulting division, named – with all the originality that a media buyer can muster – Group M Consulting Services, looks like an interesting attempt to move the game on.

However, Kelly Clark, Group M’s chief executive, claims that the new division isn’t an attempt to muscle in on the territory currently occupied by Accenture, McKinsey and the like.

I don’t understand why he says that. Take a look at the list of services Group M Consulting says it will provide – marketing and media analytics, budget allocation and optimisation, target prioritisation (ugly phrase, but we know what it means) and ROI analysis of media and marketing spend – and it sounds exactly like the sort of stuff that Accenture and its peers do.

Here’s what Accenture says it does: “Accenture Marketing Sciences, a specialised practice within Accenture, provides marketing measurement and optimisation services for media, marketing, retail and digital channels to increase the return on their marketing and media investments. Accenture Marketing Sciences has more than 400 clients across Europe, the United States, Latin America and the Asia Pacific region, including more than half of the top 100 global advertisers.”

So, if it’s not going to compete with Accenture, what is it going to do? Well, it might be a loss-leader to bring buying business into the WPP media buying arms, but what’s the point of that?

In any case, taking on this type of business takes media specialists into exactly the territory they should be in: higher value, and in a position to exert greater influence over the client at the C-suite level.

So plaudits to Group M. But they’ll have to build strong Chinese walls to avoid accusations of conflict of interest. And I can imagine the likes of MediaCom and MEC won’t like having their homework prejudged or marked by a bunch of consultants, even if they are (notionally) on the same side.

When all else fails, a furry animal will do

Like millions of others I was utterly charmed by this ad for the 3 network by Wieden and Kennedy. As of last weekend, it’s had 5 million-plus views on Youtube, and 4,300 comments.

Finally, here’s something memorable for 3, the runt of the mobile phone network litter, which has suffered too long from anodyne advertising. If anything will put it on the map and make it relevant this is it.

The clever thing about it of course, is that it’s inherently shareable – go to this site to see all the mash-ups; or follow it on Twitter (#danceponydance) – which both plays to the message 3 wants us to take out, and gives it a massive extra push to the target audience.

It’s also proof of the enduring power of furry animals in advertising – just think Gorilla, Aleksandr and Sergei, the Honey Monster or even the Andrex puppy.

Let’s hope it doesn’t demonstrate another enduring truth in advertising: that nothing kills a bad product faster than great advertising.