But, as Richard Carpenter reports, US rules barring 18 of the giant companies have meant a table like none other before.
To say it has been a difficult year for league tables in the PR industry would be putting it mildly. Perhaps the only ounce of cold comfort is that it wasn't just the PR industry that was hit.
The problems emanate from the Sarbanes-Oxley Act in the US last year, which had much wider ramifications than originally thought.
It was brought in to tighten up financial monitoring and transparency for US-listed companies in the wake of the Enron debacle, and has placed new responsibilities on the directors of publicly-listed companies. For example, it requires them to take a much tougher line on the release of any unaudited financial information.
This is all well and good, apart from when you rely upon the early release of that financial information to compile league tables that offer a crucial guide to a particular industry. Many PR agencies are subsidiaries of larger listed companies so their figures are not in the public domain - it is up to the individual management teams to release figures to PRWeek and other trade bodies in order to ensure they are covered in the tables.
Requesting financial information from management also allows the tables to be based on a standardised year end, rather than the different accounting periods of individual companies.
The clampdown does not just apply to financial figures but also to staff numbers, client numbers, deals worked on and a lot more statistical information that is traditionally poured over by a whole range of interested parties.
As a result, a total of 18 major agencies have had to pull out of the 2003 PRWeek Top 150 league tables, including last year's first, third and fifth-ranked agencies . Rather than include 'guesstimates' for missing agencies, PRWeek has decided to run them in a separate list, together with the relatively outdated and small amount of public information from 2001 available on them from Companies House. We detail the agencies in question later in this article.
On the other hand over 150 agencies, including many major players in their fields, did participate, providing figures taken from their management accounts and signed off by their auditors. Analysis of these agencies reveals some very valuable trends and data.
Leading this year's table is Bell Pottinger/ Good Relations. Last year, the group was covered in the league table as two separate entities: Bell Pottinger Communications, ranked fourth, and Good Relations, ranked ninth. However, at the beginning of 2002 the two companies were brought together under the chairmanship of Kevin Murray, with Trevor Morris as CEO. Chime's hi-tech PR group previously entered as Chime Online, now renamed the Harvard Communication Group, in its own right lower down the table, but has subsequently been brought in to the whole PR division in 2003. 'Chime integrated the management of Bell Pottinger and Good Relations in response to the market downturn and to enable the company to restructure the business,' explains Chime chairman Lord Bell.
Despite the climb up the rankings, Bell acknowledges that it has been a terrible year for his PR businesses. In common with Citigate one place below it in the table, Bell Pottinger/ Good Relations has seen a massive slump in income. 'It's been terrible. We made it clear in our prelims that the PR business has declined in income by 21 per cent, with profits down by 47 per cent,' Lord Bell adds.
In fact, the top three agencies - Bell Pottinger/Good Relations, Citigate and Edelman - are the only ones left in the table with fee income of over £10m. Taken together, they saw fee income decline by nearly £17m, a 20 per cent drop on last year. And that average is even buoyed by the fact that Edelman had a reasonably good year in the UK, with fee income rising 16 per cent to £14.6m.
'It's a shame that so many companies couldn't take part in the ranking this year because, as you can see from our numbers, we've actually had a very good year,' says chief executive of Edelman UK James Thellusson.
'We had some very big wins, but the marketplace remains very tough. We're part of a private company so I guess we're allowed to do what we like with our figures, but it's a wider transparency issue for the PR industry to deal with.'
Citigate, in second place, saw its income drop from £31m to £23m - but still has a near £9m lead on Edelman UK. Richard Nichols, chief executive of Incepta, Citigate's holding group, says the numbers show a year of two halves. Corporate and consumer PR performed relatively strongly; indeed, the Red Consultancy, another Incepta offering, showed a 16 per cent jump in income to £7.6m and came in at number five in the overall rankings.
Public affairs also did reasonably well. The sector that dragged Citigate's peformance down was financial. 'Global M&A activity by value was almost half of what it was in 2000; by number of transactions it was back to 1994-95 levels,' bemoans Nichols. 'It's no wonder that our financial PR income was impacted.'
Move away from the three really big players and the picture does not look anywhere near as gloomy. Lumping together the eight agencies that fall into the £5 to £10m fee income bracket shows an average decline of just one per cent in income. The income bracket accounts for relatively big names such as College Hill Associates, The Red Consultancy and Band & Brown, and is fairly steady around the £51m mark for total fee income across all eight agencies. That compares to an average fall of 20 per cent in the £10m plus group, down from £85.7m in total income last year to £68.8m this time around.
Further down the scale the picture becomes rosier still. The £1 to £5m fee income group shows an average increase in income of three per cent.
The 77 agencies that fall into this income bracket show a total fee income of £172.8m compared to £167.5m for the same agencies last year.
The £500,000 to £1m bracket also has a good story to tell. The 51 agencies in this section also see an average rise in income of three per cent, up from £36.2m last year to £37.4m.
The staff figures also tend to back up these trends. While the top two agencies have haemorraged staff over the last year, further down the rankings staff numbers have remained relatively stable.
Bell Pottinger/Good Relations may have found itself in the number one spot for fee income this year, but it also shows the greatest fall in staff numbers over the period. In 2001, the combined agencies accounted for 374 staff but that falls to just 282 this time around, a drop of just under 25 per cent. Its sister agency, Harvard Communications, has the highest percentage drop in the whole table, cutting its staff from 81 to 55, a whopping 38 per cent reduction.
Citigate, one position below Bell Pottinger/Good Relations, fares slightly better, but still introduced sharp cutbacks. Staff numbers were reduced from 346 in 2001 to 282 at the end of last year, down 18 per cent.
Compare this with some of the smaller agencies in the list and, once again, there is quite a stark difference. Stability seems to be the main approach with a definite reluctance to release staff unless times are really bad. Some have even managed to increase staff numbers during 2002.
Certainly, the eagerness with which some of the larger agencies have shelved staff when faced with a downturn in fee income does not tally with the reaction lower down the ranks.
Some of the smaller agencies have even increased their staff numbers, despite a fall in fee income. Companycare Communications provides one of the most notable example of such behaviour: a 20 per cent cut in fee income has prompted an increase in staff - albeit by just two - to 25.
But they are by no means alone. AS Biss & Co follows in Company Care's footsteps, as does Camargue, BGB & Associates, Sinclair Mason and the Whiteoaks Consultancy, to name just a few.
By far the most popular response to a small downturn in fee income has been to retain staff at roughly the same numbers as the previous year.
Indeed, it is not until the fee income downturn hits more than double figures in percentage terms that staff numbers seem to be hit. Even then, smaller agencies tend to have much less percentage reductions in staff numbers than those nearer the top of the table. The obvious conclusion is that most agencies are reluctant to get rid of staff until times are really bad. It also indicates that jobs have been relatively safer at the smaller agencies than with some of the big players.
These findings tally with one conclusion drawn from the PRConsultants Association's 2003 benchmarking survey. As a result of Sarbanes-Oxley, the PRCA also found that most of the participants in its survey this year were drawn from small and medium-sized, independently-owned PR agencies.
However, PRCA's chairman Graham Lancaster - himself bound not to release Biss Lancaster Euro RCSG's figures - remains sanguine that a way can be found round the problem for next year.
So what were the predictions of those smaller, independent consultancies for 2003? According to a recent press release from the PRCA, 'These consultancies expect, at best, a very moderate increase in their fee income during 2003'.
Perhaps that sentiment echoes last year's desire to hold onto staff rather than cut back drastically, despite the downturn.
There is little evidence to suggest an overall trend towards project rather than retained work, as a result of the downturn. Some agencies insist that retainer agreements have been cut back, but others, particularly in financial PR, have seen a rise in retainer work as projects such as M&A and IPO work has waned.
However, Burson-Marsteller UK chief executive Allan Biggar does believe that there is a longer-term trend toward project-based work away from retainers. He points out that 50 per cent of B-M's work in the UK is now project based: 'People are much more nervous about making longer term commitments - and by that I mean anything over six months.'
There are differences between sectors, of course. Biggar points out that public affairs and crisis management have maintained 'some sort of solidity' in retainer work, whereas healthcare and marketing are increasingly project based. 'The old corporate comms-type retainer is increasingly done on a low base with everything else bolted on,' he says.
That means a trend toward bigger in-house teams away from the agencies.
'A lot of people are trying to do things in-house too, because, I guess, they think it'll work out cheaper. It has introduced a lot of volatility into the market and makes managing a large agency that much more difficult,' Biggar says. 'You have to adapt and be flexible. There are big issues in terms of having a much more flexible labour source, for example.'
Unfortunately, the effect of Sarbanes-Oxley means it is difficult to know exactly how some of the key players' figures have been impacted by these trends. Many of the largest PR agencies in the UK market were forced to drop out of the Top 150, including five of last year's top ten: Weber Shandwick, Hill & Knowlton, Countrywide Porter Novelli, Burson-Marsteller and GCI/APCO. Other big names missing from the list include Biss Lancaster Euro RSCG, Fleishmann-Hillard, Ketchum, Golin/Harris International, Shire Hall, Cohn & Wolfe, Manning Salvage & Lee, and Ogilvy.
So what do these and other agencies cut out of the loop think of the situation? Understandably, many of them are tight-lipped following the legal diktats they have received from the heads of their groups. Weber Shandwick UK and Ireland joint chief executive Colin Byrne would only release a statement confirming the situation: 'In accordance with the recently enacted Sarbanes-Oxley Act, a release of this type of financial information might not be easily reconciled to our parent company's publicly reported figures. As such, publication of this information to the general public could result in unintended investor confusion.'
Others were willing to go slightly further and talked of their frustration.
Ketchum UK chief executive Jon Higgins was eager to take part because his part of the agency had a good year: 'We bucked a bit of a trend. It's extremely frustrating that the year you really want to take part you can't. It's just one of those unfortunate situations that we've all got to find a way to work through in the future. It doesn't do anyone in the industry any favours. I think we'd all rather have accurate facts than any guesstimates out there.'
Financial Dynamics was forced to withdraw its numbers, but this was not due to Sarbanes-Oxley. On top of facing a difficult year with the loss of Nick Miles and Hugh Morrison, it has been unable to take part because it is trying to execute an MBO from Cordiant.
FD chief executive Charles Watson bemoans the fact that the MBO negotiations bar the agency's entry. 'We would have liked to have submitted them. Our retained revenues actually grew last year,' he says, although he does admit it has been a 'difficult' year and that 'the percentage of revenues from non-financial PR is much higher.'
'In this market you have got to be increasingly versatile,' notes Watson, who concedes he is interested in the fact that all of the larger agencies decided to pull their figures. He believes it shows the level of insecurity surrounding the impact of Sarbanes-Oxley. Insecurity in the markets is also having just as strong an impact: 'The client base is increasingly looking to us for a more international service and they recognise that diversity is strength. The markets will remain very difficult as long as there is a war,' Watson says.
That view is backed up by PRCA chair Lancaster, although he does point out that some sectors have fared better than others. Health and the pharmaceutical sectors, for example, had a reasonably good year. Shire Hall might not have been able to release its figures to get into the tables, but it's reasonable to assume it has not suffered as badly as those in more difficult sectors, such as telecoms or IT.
The latter have been among the year's poorest performers as the end of the dotcom boom really took its toll. Text 100 International, for example, reports that its fee income is down 37 per cent relative to 2001. Brodeur Worldwide - another agency that has been forced to withhold its figures - is likely to have been hit by that trend too.
Lancaster is quick to point out that it is not all doom and gloom, however.
He notes that consumer, corporate and public affairs tended to have a reasonable year, while the lack of M&A and IPO work means financial PR has suffered badly. Take a look at Citigate's performance as testimony to those trends.
'It's a mixed bag across the sectors - some have done well and some have suffered,' concludes Lancaster. 'As an industry, if we manage to end the year in a neutral situation then we will all have been reasonably successful.'