Agencies want their cake and to eat it too when it comes to reporting financials

It’s that time of year again. All public relations agencies are supposed to show complete transparency by submitting their 2007 overall billings to PR Week for the publication’s annual Agency Business Report. This week, PR Week featured a compelling editorial that implores the public advertising holding companies to release this information and stop hiding behind the Sarbanes-Oxley excuse, because this point of rationale holds little weight.

Good for PR Week. I completely agree.

Ever since I can remember, the top few hundred agencies in our industry have reported their increases or decreases in billings each year. This exercise is good for our industry because it is the only time that real transparency occurs among the often exaggerated world of agency success and failure. It also offers some semblance of how specific agencies are faring compared to their compatriots. And, this can be one important metric used for recruitment, as well as by those corporations prospecting for new firms. And lastly, every couple of years we see a few innovative agencies experience meteoric growth patterns. These numbers tell the true story (better than any words can provide) of how they separated themselves from the herd.

The biggest public agencies stopped participating in this exercise a number of years back when Sarbanes-Oxley was implemented. They’ve claimed that it’s just too dangerous to publicly state whether they’ve grown or lost business in any particular year and it’s simply too confusing to separate the PR fees from the company’s greater financials. Yet, I don’t see any of them showing similar fearful restraints as they submit one award submission after another for Agency of the Year categories that each trade publication sponsors. How is the industry supposed to know that Fleishman or Ketchum or Burson or Weber is indeed the best agency in 2007, if we aren’t ever allowed to see their numbers? Although the awards are based on a number of criteria, billings growth has to be one of them, right?

This seems like a mighty big hypocrisy to me. I’m one who votes for complete transparency by all agencies. If we can’t get there, then I say – no dessert for those who won’t abide by all the rules.