Close-Up: Is the Nielsen billings table relevant?

Do the findings provide a fair and accurate representation of the industry, Anne Cassidy asks.

It's archaic and belongs in the 80s. No, not Rory Sutherland's dress sense, but the annual Nielsen billings table, as viewed by Gary Leih, the chief executive of the Ogilvy Group.

Leih, whose agency is ninth in the table, believes the measurement, far from reflecting the relative health and wealth of an agency, 'is so far removed from the science of communication, it's a bad joke'.

Leih is not alone in his assessment; Stephen Woodford, the chief executive of DDB, believes the industry should move away from the Nielsen table towards a revenue measurement. Woodford, who witnessed DDB dropping out of the table's top ten last week, explains: 'If I was looking at how we were performing against our competitors, I would look at our revenue rather than billings.'

Based on the ratecard, Nielsen billings show which agencies saw the most media spend during the previous year. Critics argue that because Nielsen does not include billings for direct marketing, digital, other non-traditional services and international work, the results are skewed Woodford says: 'Nielsen only measures advertising in one market. It has limited meaning. It is purely domestic, purely above the line.'

Jim Marshall, the Starcom chairman, believes that while the billings measure serves as an indicator of trends, it is more suitable for media agencies than for creative agencies. He says that attributions for creative agencies are more complex and there is also potential for misappropriation of billings for clients who use a roster of creative agencies. But even for media agencies, the results are not definitive Marshall says: 'It's based on average rates and nobody pays an average rate. There is always going to be a question over precision.'

Some argue that a league table based on agency income would be more relevant, but the Sarbanes-Oxley Act in the US, which prohibits the public release of unaudited financial information, hinders this. Others suggest headcount, but there are difficulties surrounding the inclusion of flexi-workers and freelancers. Experts tend to look to the Kingston Smith W1 analysis of Companies House data, but that also has its critics.