Those PR firms owned by giant advertising holding companies and eager to buy themselves back - by my count, that's almost one-third of them - received some extra motivation a couple weeks ago when their parents announced that due to the Sarbanes-Oxley Act, they would no longer be able to provide revenue information to the various public relations industry rankings.Sarbanes-Oxley, you will recall, is the legislation passed in the wake of the Enron and other scandals in the hope of encouraging greater transparency on the part of public companies. That it is now being used by the communications holding companies as an excuse for becoming more opaque was described to me by one top-10 public relations agency chief as an example of the "law of unintended consequences." In reality, it looks more like someone in these organizations said, "Try to regulate us, will you? Well, we'll be as ornery as possible while sticking to the absolute letter of the law." (In a delicious bit of irony, an anonymous WPP lawyer - is there any other kind? - claimed that releasing these numbers would be "in violation of the spirit of the law," thus demonstrating an understanding of the spirit of this law 180 degrees removed from reality.) The issue for holding companies is that Sarbanes-Oxley discourages releasing any data that does not apply GAAP rules. The major rankings have offered to change their criteria to receive GAAP information, but the holding companies do not themselves use GAAP when breaking out PR revenues internally, so they would therefore have to do at lot of work to come into compliance. But this is historical, not forward-looking information we're talking about. And any published ranking could be accompanied by an explanation of the method used to count revenues, and an explanation that the information is being released under the auspices of the ranking organization, not the participating firms. The PR firms in question can't be happy. They can no longer claim to be the largest, second-largest, third-largest, etc., firm in the world in their press releases - or rather, they can claim it, but how would we reporters know if they were right? Clients who send their RFPs to the top-10 PR firms will be calling PR21 and Rogers & Associates rather than Ketchum and GCI. And both this magazine and my newsletter name Agencies of the Year: It's hard to see how we could consider a firm if we didn't know whether it grew or declined. Ultimately, we agree with the PRSA (there are five words I never thought I'd write) when it says, "Media companies should be among the most open in terms of reporting the details on revenues."
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