I love rankings. I’m one of those people who, when I see a ranking, can’t resist looking at it and trying to interpret it. I immediately try to find its meaning, its justification. How does the ranking show the reality of what I know and, above all, how it justifies what I may or may not know about the topic it addresses?

Since university, I have followed the best-known OECD and UN rankings. I always look carefully at school rankings and the courses with the highest average admission rates at university. I think that in each of these rankings, there is a little bit of the sociological explanation of how we are as a country and the vision of young people and Universities about our collective future.

When I started working I came across a new type of ranking, a ranking for advertisers. I found it curious how the “success” of each entity was measured. They never said much to me, and for that reason, they were one of the few that I never gave much importance to.

Now that I got into advertising, I looked at them again. Many years after starting my career, imagine what I saw… Rankings have been done the same way for at least 25 years! Well, not in the same way, no. The investment in the Digital column was added, so they have already undergone at least one change…

And suddenly the question came to me. What are these rankings for? Surely they must be of some use. Well, they can be legitimate criteria for choice. Will they be used for public tenders? Are they used to choosing the best-ranked companies on any shortlist? They must certainly be useful for something, so it is worth looking at their construction and the meaning of their content.

The most common advertising ranking is defined by the gross investment (without discounts) made by the clients (brands) of a given agency.

But what investment is this? Gross investment is the value at list prices of a given insertion, which in June 2023 exceeded 7 billion euros!!! As in the media, there are discounts for all tastes and in some media, they far exceed 90%, the real value is a tiny portion of this wonderful amount. But it is more serious, because the discount is not uniform across the medium, meaning that those who invest, for example, in press or TV, have more gross value than investing in digital. In other words, if you want to climb the rankings, you have to change the media you invest in, even though you can always invest the same amount. In other words, the values are neither real nor equitable.

But this is still an acceptable criterion when we are talking about media agencies. Especially because the investment has a direct relationship with its profitability through the commercial agreements that they define with each of the media. In the case of media agencies, it reflects a large investment, which is acceptable as a measure.

But when we look at creative agencies, where is the adherence to reality?

Investment is a unilateral decision for each client. There is no justification for the quality of the work or the effectiveness of what was built nor for the results of that work. Who has never seen a poor campaign loaded with media, or a good campaign with limited resources behind it?

The ranking only demonstrates the size of the customers that each of these entities has at their disposal. What is it for? I don’t know. Unless the thought is, “If the big guys are there, things must be good”! Or the opposite thought “They’re small and I don’t care”. In other words, the magnitude of the measurement is not aligned with the reality of the work, as, for example, an excellent design agency would never appear well placed in these rankings that only look at the media.

Imagine how absurd this situation is. A great agency, very well placed in the rankings. As we have already seen, there is no link between your results and your client’s investment value. In other words, we may be hiring a company that may close its doors the following week…

So how to measure creative agencies, be they advertising, design, or branding agencies?

As one should measure any other company. Due to its turnover and, above all, its gross margin. For its Gross Value Added. By its number of collaborators. From the list of current clients. For the work done. For its results. All of these are measurable, identical, aligned, and uniform criteria that can be easily identified by all companies.

Of course, there will be a discussion about which criteria are most relevant to customers and which should not be equated. But those chosen are truly those that help the market to make informed decisions and companies to position themselves in rankings for what they are, and not for what others let them be.

Is it unreasonable to ask?

Written by João Santos and originally published in MaisM.