The WPP Group, citing the scores of different ad/PR industry
rankings and the different rules for each, said it will not
supply data on its PR, advertising and other subsidiaries
this year.
Howard Paster, executive VP of the WPP Group, owner of Hill
and Knowlton, Burson-Marsteller, Ogilvy PR Worldwide, Cohn
& Wolfe and other PR firms, said the strict disclosure
rules of Sarbanes-Oxley, passed last year and to be implemented
starting March 31, make it dangerous to provide different
numbers to all the different rankings.
Kathy Cripps, president of the Council of PR Firms, an association
of 120 PR firms largely funded by the top 20, said that WPP,
Interpublic, Omnicom, Grey (GCI Group), and Publicis told
her March 3 they will only supply overall totals for categories
such as advertising and PR.
March 3 was the deadline for entries in the Council's annual
ranking of PR operations and returns had not been received
from holding company PR units.
Cripps said she extended the deadline to March 7 in hopes
the holding companies might change their minds but they did
not.
Havas, owner of Magnet Communications, has not yet informed
the CPRF of any decision in this matter.
Cripps said the CPRF will provide the PR totals which the
holding companies disclose as part of their regular financial
reports.
She said the inability of the many PR brands owned by the
holding companies to report their numbers creates a problem
for them.
She spoke to lawyers on the issue who told her that Sarbanes-Oxley
lacked "clarity" in the matter of holding companies
disclosing the results of their subsidiaries.
IPG Cites
"Reporting Environment"
Philippe Krakowsky, senior VP-PR at Interpublic, said the
new policy is the result of the "current reporting environment."
Different publications have their own reporting rules and
they don't conform to GAAP (generally accepted accounting
principles), he said.
Also, he noted, GAAP rules differ from country to country.
Key Interpublic units are Weber Shandwick Worldwide and Golin/Harris
International. Omnicom units affected include Fleishman-Hillard,
Ketchum, Porter Novelli and Brodeur.
WPP lawyers and executives discussed the matter "vigorously"
and at length and have come to the firm conclusion that WPP
could be in violation of the new law, said Paster.
This policy would make it hard for many trade publications
such as Advertising Age and AdWeek to assemble
their annual rankings. They are now in the process of gathering
this information.
Paster, formerly chairman and CEO of H&K, said that WPP
normally would compile statistics in numerous areas such as
advertising, PR, sales promotion, direct mail, and media buying
for each of its many agencies for trade publications in a
dozen or more countries.
The gathering of such information, under different rules,
including filling out forms that run to ten and more pages,
had become a major task of WPP agency executives, he noted.
WPP ad agencies include J. Walter Thompson and Ogilvy Worldwide.
The ad agency conglomerates as well as their many subsidiaries
had a difficult year in 2002. The year is being described
as the worst downturn in advertising/PR in 50 years.
|