In 2003, PRWeek grimly predicted Sarbanes-Oxley would commence an era of vague financial reporting for marketing companies. Sadly, but not surprisingly, we were right.
Since Sarbanes-Oxley (SOX) was enacted in 2002, the industry's publicly traded holding companies—Omnicom, WPP, Interpublic, Publicis, and Havas—have declined to release revenue figures for their individual firms.
As PRWeek prepares its annual Agency Business Report, we are again reminded of how the industry is sold short by this practice. Independent leaders, like Edelman and Waggener Edstrom, provide revenue, but the publicly held heavyweights demur, pointing to SOX, thus the picture that surfaces is inevitably incomplete.
Revenue and staff figures would provide new bragging and marketing rights for the top firms, and it could also finally demonstrate how PR firms are catching up to ad firms. Although disclosing numbers for each operating unit might not always be flattering, accurate figures are necessary year in, year out, quarter to quarter, to track the industry's progress, to face oncoming challenges, and embrace emerging opportunities. And without it, agencies risk misinformation arising about their firms.
Passed in the wake of destructive fancy accounting feats at Enron and elsewhere, the spirit of SOX was to encourage transparency and safeguard investors and the public. Instead, holding companies hide individual agency data in topline numbers, because it benefits them. If the industry is ever destined to be better understood and valued, these numbers must be released.