DATACENTER 2007 AGENCY PROFILES YEARBOOK AGENCY REPORT. Profiles of the top 50 marketing organizations in this 63rd annual ranking

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1 April 30, 2007 DATACENTER 2007 AGENCY PROFILES YEARBOOK AGENCY REPORT Profiles of the top 50 marketing organizations in this 63rd annual ranking WORLD S TOP 50 Marketing organizations ranked by 2006 worldwide revenue. Omnicom leads the pack again PAGE 19 EXPANDED ANALYSIS The activities of Omnicom Group, WPP Group, Interpublic Group of Cos. and Publicis Groupe PAGE 6 MORE ONLINE Go to DataCenter at our website for more charts, analysis and searchable data adage.com This document, and information contained therein, is the copyrighted property of Crain Communications Inc. and The Ad Age Group ( Copyright 2007) and is for your personal, non-commercial use only. You may not be reproduce, display on a website, distribute, sell or republish this document, or the information contained therein, without the prior written consent of The Ad Age Group.

2 April 30, 2007 Advertising Age 2 ABOUT THE YEARBOOK AGENCY PROFILES YEARBOOK is a companion to the 63rd annual Advertising Age Agency Report, published April 30, The printed version provided rankings of the world's top 25 marketing organizations, 469 U.S. agency brands, the top 100 marketing services shops, top 50 U.S. agencies by revenue splits from direct marketing, sales promotion and interactive, rankings by multicultural and healthcare shops, the world's leading media specialist companies, the top 10 ad agencies by their traditional revenue on a worldwide basis, and a reprise of the top 10 consolidated agency networks chart. All rankings listed above can be found under Agencies in DataCenter in adage.com. Likewise, the methodology followed by Ad Age for all its rankings is also available online in DataCenter where even more extensive rankings are provided for marketing services agencies and their direct, sales promotion and interactive splits. This yearbook provides more details on the printed rankings. It includes: A ranking (Pages 19 and 20) of the world's top 50 marketing organizations by revenue, from Omnicom Group s $11.38 billion worldwide to Jung von Matt s $87.1 million. The cutoff is up from $81.4 million in These top 50 marketing organizations dominate the advertising universe: Just the top four account for 57.5% of $13.01 billion in revenue from U.S. advertising and media, and adding direct, sales promotion, interactive, health care and PR to that, the top four claim 52.6% of U.S. s $28.21 billion universe. Analysis of the Big Four marketing organizations (beginning on Page 6) and profiles of all 50 (beginning on Page 21). The structure of the profiles for marketing organizations includes revenue splits by U.S., non-u.s. and worldwide when applicable, contact information, and significant news of the parent covering 2006-todate. Similar content is provided for the parent s major U.S. (and sometimes non- U.S.) holdings, whether subsidiaries or affiliated companies. All must be involved in marketing communications. Financial data is omitted on subsidiaries involved in health care and PR. An asterisk by the name of parent or subsidiary indicates an Ad Age estimate. A marketing organization is ranked by its total worldwide revenue if its marketing communications activity represents more than half its total. If the sum of its marketing communications is less than half, the parent is represented only by the revenue from marketing communications. Revenue tallies and profiles of 10 of the the world's leading independent agency networks. These independent agency networks are most commonly operated by duessupported secretariats that develop services to aid member agencies individually and collectively. This leadership unit may also organize network pitches for accounts, most often against multinational agency networks. The 590 agencies represented by these networks had collective revenue of $3.05 billion worldwide, up 16.2%, with the U.S. representing $1.51 billion of that, up 7.8%. In the profiles, Ad Age lists their network accounts, those held in at least three countries. Revenue for agencies in this report is the sum of three components: Fee income, markup on materials and services, and the commissions received for buying media. Marketing services companies often identify this number as gross profit, net sales less cost of sales. The term revenue is synonymous with gross income, the barometer of agency activity used in previous Ad Age rankings. Revenue was obtained either via Ad Age questionnaire (found at adage.com/arq), pulled from public documents or estimated by Ad Age. Ad Age estimates revenue for most agencies owned by publicly held marketing organizations, virtually all of whom do not detail their financial statements to the agency level. These agency parents have not provided revenue on their agency brands since Congress passed the Sarbanes-Oxley Act in The act is designed to tighten rules on disclosure and make the books more transparent. If an agency did not provide guidance for estimates, Ad Age calculated estimates and ran estimates by the agency. TO REACH US Online: CLICK CLICK for daily marketing news from adage.com for adage.com s Customer Service page For questions about this report, AgencyReport@adage.com Subscription & single copy sales ; Advertising (212) ; Classified ; Library services (312) , (312) News offices: New York (212) ; edit@adage.com, Chicago (312) ; Detroit (313) , Los Angeles (323) ; San Francisco (415) ; Washington (202) ;London r d A N N U A L R E P O R T Copyright 2007 Crain Communications Inc.

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4 April 30, 2007 Advertising Age 4 U.S. AGENCY REVENUE JUMPS 8.8% TO $28.2 BIL. SEA CHANGE: Internet drives marketing services gains; JWT top U.S. agency brand; Dentsu leads world chart By BRADLEY JOHNSON bjohnson@adage.com REVENUE FOR U.S. marketing-communications agencies jumped 8.8% to $28.2 billion in 2006, the strongest growth since ad spending began to rebound from recession in The hot growth came from marketing services, fueled by digital. Traditional ad agencies, grappling with a shift from old media, saw tepid growth. Agency revenue from marketing services rocketed 13.1% to $15.1 billion, the strongest growth since the recession, according to the 63rd annual Advertising Age Agency Report. Agency revenue from traditional advertising and media rose just 4.2% to $13.1 billion, the weakest growth since 2003, the first full year of the advertising recovery. In 2006, U.S. agencies collectively generated less than half of their revenue 46.4% from traditional advertising and media planning/buying, with the rest coming from a range of marketing services including digital/interactive, direct marketing, sales promotion, health care and PR. Marketing services grabbed 53.6% of U.S. marketing-communications agency revenue. That was up from 51.5% in 2005, the first year that marketing services topped advertising/media. What s behind the change? No surprise: the internet. U.S. interactive-agency revenue rocketed 23.1%, driving the increase in marketing services. But digital is more than interactive shops; it s an integral part of marketing services from direct to promotion. Interactive is huge, says Chris Weil, chairman-ceo of Momentum Worldwide, a promotions agency owned by Interpublic Group of Cos. If anybody in marketing is not a big part of interactive, they won t be around much longer. Traditional advertising certainly is under pressure. The 4.2% U.S. revenue growth for traditional advertising/media agencies roughly tracks with ad spending: U.S. measured spending on traditional media last year grew a soft 3.2%, according to TNS Media Intelligence data. Among key points from the Agency Report: Dentsu ranked as world s largest consolidated agency network, with 2006 revenue of nearly $2.5 billion. The consolidated-network ranking is new this year, and adds up the revenue of ad agencies and allied marketing-services ventures, excluding media, health care, market research and public relations. WPP Group s JWT was the No. 1 U.S. agency with estimated revenue of $445 million from traditional advertising, followed closely by BBDO and McCann. The trio has always been near the top. In the first Agency Report, in 1945, the three shops ranked Nos. 1, 6 and 4. JWT s estimated 1944 U.S. revenue: $9 million, or $101 million after adjusting for inflation. Omnicom s Rapp Collins Worldwide ranks as the top marketing services agency. AQuantive s Avenue A/Razorfish was the No. 1 interactive agency. AQuantive ranked as the ninth-largest marketing organization, becoming the first interactive operation to crack the top 10. Omnicom, WPP, Interpublic and Publicis accounted for 52.6% of revenue for U.S. marketing-communications services. The Big Four s combined U.S. revenue was split evenly between advertising/media (50.8%) and marketing services (49.2%). Reliance on traditional advertising varies widely by company. Omnicom last year generated just 42.8% of worldwide revenue from traditional advertising/media, lowest among the top four; Publicis drew 70% of revenue from traditional advertising/media, highest among the four. The $1.3 billion purchase of Digitas by Publicis was the largest acquisition over the past year by a marketing organization, but it was far from the only digital deal. Since January 2006, the Big Four have bought, or made investments in, more than 20 interactive ventures. The Big Four last year kept the same worldwide-revenue rankings in place since 2003: Omnicom, WPP, Interpublic and Publicis. Interpublic was No. 1 as recently as It fell to second, behind Omnicom, in 2001, and third, behind WPP, in Interpublic could slump to No. 4 in 2007; Publicis, with its faster organic growth and the Digitas acquisition, is coming up fast. Interpublic s position will depend in part on how much progress it makes this year in its stated goal to achieve organic revenue growth comparable to industry peers by CONTRIBUTING: KENNETH WYLIE INSIDE THIS YEARBOOK About this report page 19 U.S. agency revenue jumps 8.8% PAGE 4 How and why marketing services is going digital page 5 Extended analysis of the Big Four No. 1 Omnicom Group PAGE 6 No. 2 WPP Group PAGE 6 No. 3 Interpublic Group of Cos PAGE 6 No. 4 Publicis Groupe PAGE 6 Holding company new business scorecard page 18 The World s Top 50 Marketing Orgaizations Ranked by worldwide gross income page 19 Profiles of the 50 companies, Aegis to WPP PAGE 22 Profiles of 10 independent agency networks page 103 STAFF FOR THIS REPORT R. Craig Endicott, Kevin Brown, Bradley Johnson, Maureen Morrison, Maura Wall, Ezekiel Garnett, Jess D Amico, Katy Gallagher, Mike Ryan, Ken Wylie. AgencyReport@adage.com

5 April 30, 2007 Advertising Age 5 HOW AND WHY MARKETING SERVICES IS GOING DIGITAL SEA CHANGE PART 2: Interactive is upending and blending direct, promotion and other services By KENNETH WYLIE agencyreport@adage.com WHAT A DIFFERENCE a year makes. Marketing services agencies interviewed for this Agency Report told Ad Age how enormously interactive communications have changed their business in just that time. The rise of digital is upending and blending marketing services. In the past 12 months, the lines between [marketing services] disciplines have completely disappeared, says Chris Weil, chairman-ceo of Momentum Worldwide, a promotions agency aligned with McCann Erickson Worldwide and owned by Interpublic Group of Cos. Adds Joe Celia, global chairman-ceo of WPP Group-owned marketing services firm G2: What we have recognized is that as certain of the [marketing services] areas eventually increase in convergence, digital is bringing disparate disciplines together. Marc Landsberg, president of Arc Worldwide, a marketing services agency owned by Publicis Groupe, notes: There is almost no marketing solution we can recommend today that would not have a digital component. Numbers back up how marketing services dollars are moving into digital. Consider Hawkeye, a $61 million (U.S. revenue) agency offering direct, promotions, interactive and a smaller traditional advertising segment. We had some falloff of gains in 2006 as clients moved, says Hawkeye CEO Richard Beanland. Hawkeye s direct-related U.S. revenue rose 5.9%, and sales promotion increased 5.8%. But interactive shot up 53%. Put another way, interactive generated 23% of Hawkeye s 2006 U.S. revenue, up from 16% in Total U.S. agency revenue figures tell a similar story. Agency revenue from marketing services grew 13.1% in 2006, roundly beating the 4.2% growth seen by traditional ad agencies. But within marketing services, agency revenue from interactive jumped 23.1%, far above growth in agency revenue from direct marketing (12.9%) and sales promotion (3.5%). Lines also are blurring inside interactive agencies. Matt Freeman, CEO of Omnicom Group digital shop Tribal DDB, explains: The work we do generally is separated by only a porous line from various disciplines. It s hard to distinguish. We may communicate on blogs, through new marketing groups, by video sharing, etc. Marketing services executives make the point repeatedly: Interactive gets you to the consumer and measures what happens. It s a highly measurable medium, says Scott Savitt, VP-directorinteractive operations of Arnold One, the interactive and direct segment of Havas Arnold Worldwide, and it s more engaging with the consumer, reaches the one-to-one level. The marketing services convergence story extends beyond digital. That point is illustrated by Bob Horvath, CEO-North America of Omnicom s Rapp Collins, the nation s largest marketing services firm with 2006 U.S. revenue of $306 million. As a direct agency, we re making sure we hit all touch points, measuring, covering promotion, in-store, events, customer experience, Mr. Horvath says. We are now defining direct more broadly, driven by client experience and interactive, which is huge and being integrated into pretty much of all we do, including our CRM programs. The convergence story is affecting agencies, consumers, clients and CMOs. What drove the 2006 joining of Interpublic s Draft and FCB Worldwide? We ran into a radical change in the market, says Laurence Boschetto, the merged agency s COO and global president. That change was the consumer. A new phenomenon in marketing was the emerging role of the consumer how, when and where to serve the consumer. That s Part 1 of the inspiration for the new DraftFCB splicing, Mr. Boschetto says. Part 2, he says, is the changing role of the chief marketing officer the intense need for immediate performance, immediate accountability. The idea of melding advertising and marketing services is hardly new. Even Draft, long known as a marketing services agency, was in the ad business long before it merged with FCB. This joining, with (Chairman-CEO) Howard (Draft) and me, was long in preparation, says Mr. Boschetto. Ten years ago, Howard, with a direct marketing background, bought my advertising agency, Adler Boschetto Peebles, for a convergence to one discipline. Now we have joined Draft, for its accountability, with FCB, for its creativity, under one management, one P&L statement. The convergence play extends to George P. Johnson, a Michiganbased events agency long involved in car shows. CEO Robert Vallee Jr. explains: Before, we were a bit player. Now clients want to get the whole thing from us. Our business has required us to offer integrated services such as direct mail, interactive, collateral print, a web site. Other shops are forging their own alliances. Marketing services giant Carlson Marketing in January 2007 formed an alliance with Hawkeye to operate a global channel marketing service called Conduit. The new service is aimed at maximizing sales by building the strongest possible customer relationships. The hardest integration but the greatest success, says Carlson President-CEO Jim Schroer, is to have sales integrated with marketing. Conduit is designed to combine Hawkeye s expertise in global channel marketing with Carlson s work in performance improvement. Marketing services agencies are learning to work with other agencies on clients rosters. There s a blurring of lines also among agencies, says Mr. Weil, CEO of Interpublic s Momentum. We work with Ogilvy (WPP) and Digitas (Publicis), for example. Always have had to work with other agencies sometimes. The difference now is that we are all sitting around the same table.

6 April 30, 2007 Advertising Age 6 NO. 1:OMNICOM GROUP By BRADLEY JOHNSON bjohnson@adage.com Worldwide $11,376.9 $10, U.S $6,194.0 $5, Non-U.S $5,182.9 $4, Worldwide ,000 62, OMNICOM GROUP, the world s largest ad industry holding company, reported record revenue, net income and earnings per share in Omnicom continued the pace into 2007, reporting first-quarter revenue and net income growth greater than 10%. Wall Street liked the results: On April 24, 2007, the day Omnicom announced first-quarter results, the stock reached an all-time high of $ That surpassed the previous peak of $ set on Dec. 17, 1999, near the height of the dot-com-infused advertising bubble. Omnicom in 2006 generated about 43% of revenue from traditional media advertising. The rest came from a range of marketing services. The New York-based company at year-end 2006 employed about 66,000 people, up 6.5% from a year earlier (62,000). ORGANIZATION Omnicom in April 2006 named Charles (Chuck) Brymer president-ceo of one of its three global ad networks, DDB Worldwide, after the death of DDB Worldwide CEO Ken Kaess. Mr. Brymer had been chairman-ceo of Interbrand Group, an Omnicom branding business. At the same time, Omnicom gave DDB s chief creative officer, Bob Scarpelli, the added title of DDB Worldwide chairman, succeeding Keith Reinhard. Omnicom in March 2007 opened a San Francisco ad agency, Cutwater, that absorbed a majority of clients and employees of the San Francisco office of Omnicom s TBWA/Chiat/Day. With the move, TBWA no longer had a presence in San Francisco. Cutwater was run by Exec Creative Director Chuck McBride (formerly exec creative dir-north America of TBWA, San Francisco) and President Brad Harrington (formerly co-president of WPP's Cole & Weber United, Seattle). Omnicom owned 100% of Cutwater. Omnicom holdings include: Three global advertising networks: BBDO Worldwide, DDB Worldwide and TBWA Worldwide, each of which offers various marketing services and specialty communications. Local, regional and national U.S. ad agencies: Includes Arnell Group; Cutwater; Element 79; Goodby, Silverstein & Partners; GSD&M; Martin/Williams; Merkley & Partners; Roberts & Tarlow; Rodgers & Townsend; Zimmerman Advertising. Global creative boutique: Majority stake in 180 Communications, Amsterdam and Los Angeles. Media agencies, part of Omnicom Media Group: Two global networks, OMD and PHD; Prometheus Media Services; Fuse Sports & Entertainment Group (Optimum Entertainment, Optimum Sports, Full Circle Entertainment, Highway Entertainment); media specialist agencies (Davinci Selectwork, Icon International, Ketchum Directory Advertising, Novus Print Media, OMG Direct, Outdoor Media Group, Resolution Media, Singer Direct). Customer relationship management: Promotion marketing and sales promotion (Alcone Marketing Group, TracyLocke); direct marketing (Rapp Collins Worldwide, Targetbase); branding (Interbrand); interactive (Agency.com, Organic). Public relations/public affairs: networks Fleishman-Hillard, Ketchum and Porter Novelli; specialty shops including Brodeur Worldwide, Clark & Weinstock, Gavin Anderson & Co. and Cone. Specialty communications: Healthcare agencies; recruitment agency Bernard Hodes Group; financial ad shop Doremus RESULTS Omnicom s 2006 revenue increased 8.5% to $11.4 billion. Organic revenue, which factors out currency changes and acquisitions/divestitures, grew 7.6%. Net income in 2006 rose 9.3% to $864 million. Diluted earnings per share jumped 14.4% to $4.99. Omnicom s operating margin (operating income divided by revenue) increased to 13% in 2006 from 12.8% in Omnicom said in its 10-K annual-report filing in February 2007: We expect that we will be able to maintain operating margins at 2006 levels and we will continue to pursue a strategy of optimizing our operating margins and maintaining a high level of investment in our people and our businesses. NEW BUSINESS New business: Omnicom in 2006 had a loss of $90 million in reported net new billings, reflecting about $3 billion in account wins and $3.1 billion in account losses, according to the tally of Bear, Stearns & Co. analyst Alexia Quadrani. It scored fourth among the six ad holding companies ranked by Bear Stearns. Omnicom in 2006 had an adjusted net new billings gain of $106 million, taking fourth place, according to Bear Stearns; the investment firm s adjusted billings reduce media accounts to 25% of reported billings to more closely correlate with anticipated revenue. The adjusted net new billings translated to an expected annualized revenue gain of $13 million. Bear Stearns aggregates account shifts reported in media, but it doesn t claim its new-business tally is all-inclusive, particularly in marketing services and outside the U.S. and U.K. Omnicom, for its part, said it had 2006 worldwide net new business of $4.2 billion to

7 April 30, 2007 Advertising Age 7 $4.3 billion. Commenting on 2006 net new business, CFO Randall Weisenburger in February 2007 said: "It was a very solid year." TOP CLIENTS Omnicom in 2006 generated 3.6% or $410 million in revenue from its largest client, DaimlerChrysler, which drew on work from more than 100 Omnicom agencies. Omnicom shops have worked with DaimlerChrysler units since 1926, when Chrysler hired ad agency Ross Roy (now folded into BBDO). After Daimler bought Chrysler Corp. in 1998, the Chrysler Group consolidated at Omnicom in In February 2007, DaimlerChrysler said it was reviewing strategic options for Chrysler Group, raising sale speculation;in April 2007,the parent said it was in talks with "potential partners" for Chrysler. Beyond DaimlerChrysler, no client accounted for more than 2.9% of 2006 revenue. Omnicom s top 10 clients accounted for 18.3% of 2006 revenue. The top 100 clients contributed 46.2% of 2006 revenue; the top 100 clients on average used services from more than 40 Omnicom agencies. DISCIPLINES AND REGIONS In 2006, Omnicom pulled in 42.8% of revenue from traditional media advertising. The rest came from a mix of marketing services: Customer relationship management accounted for about 35.9%; specialty communications generated 11.2%; public relations represented 10.1%. Omnicom in February 2007 revealed a few details about the specialty communications sector: Mr. Weisenburger said healthcare accounted for "I'd guess 70%...off the cuff" of that sector's revenue, implying about $896 million worldwide in Recruitment advertising--bernard Hodes--is "the bulk of the balance" of specialty communications, he said. CEO John Wren added that recruitment work represented about 2% of Omnicom total revenue, implying about $228 million worldwide in Recruitment is "the cyclical part of the specialty" communications sector, Mr. Wren said. Traditional media advertising revenue in 2006 grew by 6.0%. CRM rose 13.0%; specialty communications edged up 3.7%; PR grew 10%. Omnicom in 2006 generated 54.4% of revenue from the U.S.; 31.1% from Europe (including 10.8% from the United Kingdom); and the rest from other regions. U.S. revenue grew 7.8% in 2006 (down from 10% in 2005); Europe, excluding U.K., rose 7.3%; U.K. increased 11.6%; and other regions rose 10.9%. Non-U.S. revenue (factoring out currency changes) rose 7.9% in 2006, up from 3.5% in ACQUISITIONS Omnicom made 16 acquisitions in 2006 and made additional investments in some companies where it had an ownership stake. Amount paid in 2006: $152.8 million. Omnicom also paid $158.6 million in earn-outs for deals done in earlier years. So in total, Omnicom in 2006 paid $311.4 million in cash, stock and assumption of liabilities. CHINA AND INDIA DEALS Mr.Wren told Ad Age in January 2007 that the company planned to build up operations in China and India in 2007, the only two markets we don't have leadership parity with the best of my competitors. Omnicom did several China deals in In June 2006, it partnered with Citic Group, a Chinese state-owned conglomerate with interests in construction, satellite communications, energy, manufacturing and financial industries as well as an advertising unit. Omnicom said the first phase of that partnership would be formation of an ad agency, DDB Guoan Communications Beijing Co., created by the merger of DDB China and Beijing Guoan Advertising Corp. Beijing Guoan Advertising ranked among China s top 10 agencies in revenue. Omnicom ended up with a majority stake in DDB Guoan. When it teamed with Omnicom, Citic Guoan ended a longstanding alliance with WPP's Grey Worldwide. Omnicom in April 2006 opened a corporate office in China (in Shanghai). Many Omnicom operating units already had a presence in China at that point, including ad agencies BBDO, DDB and TBWA/Tequila; media shop OMD; PR shops Bentley Communications, Fleishman-Hillard and Ketchum Newscan; branding outfit Interbrand; and interactive shop Tribal DDB. Omnicom in March 2006 bought a majority stake in Shanghaibased Unisono Fieldmarketing International, a field-marketing company. Omnicom also made a move in India: In mid-2006, it struck a deal to buy a majority of Gotocustomer Services, New Delhi, a provider of field and retail marketing services to national and multinational clients across India from its eight offices in the country. Gotocustomer became part of Diversified Agency Services (DAS), which oversees Omnicom s marketing-services holdings. OTHER DEALS Omnicom in November 2006 bought a majority stake in 180 Communications, a hot creative shop that shared the Adidas account with Omnicom s TBWA Worldwide. 180, based in Amsterdam, employed more than 100 people from more than 25 countries. 180 s other clients included Amstel, Motorola, Omega Watches and Sony. Sony Electronics in the U.S. hired 180 to work with Omnicom s BBDO, New York, on its account; 180 opened a Los Angeles office in January 2007 to serve Sony. In fourth quarter 2006, Omnicom also bought BBL-HFM, a fullservice agency in The Hague, which merged with a TBWA Worldwide shop to create HFM Bovaco; Flamingo International, a market research company with offices in London, San Francisco and Singapore, and now a DAS agency; and Weapon 7, a digital interactive TV consulting agency operating in Europe and the U.K. and now part of Omnicom s Zulu Group in the U.K.

8 April 30, 2007 Advertising Age 8 Omnicom in 2006 acquired in the third quarter: Go Productions, a meetings and trade-show firm based in Atlanta with offices in Los Angeles (now part of Radiate Group s auto group); Rodgers Townsend, a St. Louis full-service agency; and Colangelo Synergy Marketing, a sales promotion office with shops in Darien, Conn., and Chicago. The arrival of internet-delivered video on the nation s TV sets was the object of a venture struck in September 2006 between Intel Corp. and Omnicom Media Group. Intel was working on software and chip installation into TV sets to make them accessible for downloading video programming from the web. OMG was developing templates with Intel for ads that had interactive features and usage-measurement features typical of web ads. In the second quarter, Omnicom added Entertainment Marketing Partners, Los Angeles and New York (now part of Ketchum PR); Harrison & Wolf, a Paris-based corporate communications agency (now part of TBWA s corporate communications group); and a majority stake in EVB, a San Francisco ad agency (now part of DAS). In the first quarter, Omnicom bought Gplus Europe, a PR shop in Brussels and London; Kaleidoscope Marketing Group, a South Carolina youth marketing consultancy (now part of Radiate Group); and Singer Direct, an insertion media specialist based in Scarsdale, N.Y. (now part of Omnicom Media Group). In 2006, Omnicom disposed of a U.S.-based healthcare business and several small businesses. Omnicom in first quarter 2005 sold its 55% stake in SafirRosetti, an investigative and security firm run by Howard Safir, a former New York City police commissioner and a friend of Mr. Wren. SafirRosetti then was acquired in May 2006 for $15.3 million by GlobalOptions Group, another security firm. SafirRosetti in 2004 had a $2.4 million net loss on revenue of $9.4 million. In 2005, it made $255,140 on revenue of $11.9 million. SafirRosetti had been a curious entry among Omnicom's holdings. GlobalOptions' explanation of SafirRosetti: "[SafirRosetti] help(s) clients solve problems that fall outside the scope of mainstream management resources by providing highly specialized and customized security services. We provide security assessments, executive protection, anti-terrorism training, threat analyses, fraud prevention techniques, special event security, protection from stalkers, private travel management and the design, implementation and management of total security systems." GlobalOptions' description of SafirRosetti continued: "We have performed risk assessments of corporate headquarters, chemical weapon stockpiles, nuclear installations and reactors, factories, yachts, private aircraft, homes, transportation systems, government facilities, political conventions, sports stadiums and sporting events. Representative risk management and security projects have included conducting threat and vulnerability assessments of Russian facilities containing nuclear materials and conducting site surveys and security assessments for a major corporation facing violent threats and attacks." NO. 2:WPP GROUP By BRADLEY JOHNSON bjohnson@adage.com Worldwide $10,819.6 $9, North America $4,195.9 $3, Outside North America.....$6,623.7 $5, Worldwide ,352 76, Worldwide ,000 2, WPP GROUP is the world s No. 2 ad industry holding company, generating slightly less than half of revenue from advertising/media and the rest from a broad mix of marketing services. The London-based company at year-end 2006 employed 79,352 people, up 3.7% from a year earlier. ORGANIZATION WPP implemented top management changes over the past year at two key network groups, Young & Rubicam and Grey. In June 2006, Hamish McLennan replaced the embattled Ann Fudge as CEO of Y&R Advertising, flagship of Young & Rubicam Brands. Mr. McLennan had been chairman-ceo of Young & Rubicam Brands Australia/New Zealand. Ms. Fudge stayed on as chairman-ceo of Young & Rubicam Brands till year-end 2006, when she retired. Peter Stringham, a former chairman-ceo of Y&R North America and most recently head of group marketing at financial firm HSBC Holdings, took over as CEO of Young & Rubicam Brands in February Effective Jan. 1, 2007, James R. Heekin III moved up to chairman- CEO of Grey Global Group, succeeding Edward H. Meyer. Mr. Meyer retired after 50 years at Grey and more than three decades as

9 April 30, 2007 Advertising Age 9 CEO. Mr. Meyer, who turned 80 in January 2007, orchestrated Grey s sale to WPP in March Mr. Heekin had been chairman-ceo of Grey s flagship, Grey Worldwide, since September Plans were in flux in early 2007 at another WPP grouping, the meandering Voluntarily United Group of Creative Agencies. WPP folded United London (formerly HHCL) in early April 2007, preparing to shift clients to the London branch of sibling Grey Worldwide. On the digital front, WPP in April 2007 put new emphasis on internet search marketing, moving Outrider, a search-marketing company bought in 2001, into Group M its group for MindShare, Mediaedge:cia, MediaCom and Maxus from Mediaedge. As part of Group M, Outrider was to provide resources to all Group M media networks. WPP announced the move the same day rival Interpublic Group bought a search-marketing firm, Reprise Media. WPP operates in four business segments: Advertising and media: Global networks Grey Worldwide, JWT, Ogilvy & Mather and Y&R; Voluntarily United Group of Creative Agencies, which includes shops such as Berlin Cameron United; media agencies, under the banner of Group M, including global firms MediaCom, Mediaedge:cia and MindShare. Market research ( information, insight and consultancy ): WPP s Kantar, which includes Research International and Millward Brown. Public relations and public affairs: Burson-Marsteller, Cohn & Wolfe, GCI, Hill & Knowlton, Ogilvy Public Relations Worldwide and others. Branding and identity, health care and specialist communications: Branding and design services identity, packaging, literature, events, training, architecture including Addison, Enterprise IG, Fitch, Lambie-Nairn, Landor, The Partners and others; direct, field, retail, promotion and point-of-sale services including A. Eicoff, G2, OgilvyAction, OgilvyOne, RTC Relationship Marketing, RMG:Connect, VML and Wunderman; health-care communications including CommonHealth, Grey Healthcare Group, Ogilvy Healthworld, Sudler & Hennessy and others; specialist communications such as multicultural marketing, event marketing and business-to-business. WPP also operates its original U.K. business, Wire and Plastic Products, which makes kitchen goods such as dish drying racks RESULTS WPP boasted solid results in The company s worldwide reported revenue rose 9.9%. Factoring out currency changes, it said, revenue increased 10.9%. (Revenue as calculated by Ad Age DataCenter rose 11.1%. Ad Age s 2005 revenue is reported in dollars based on average exchange rates and includes full-year results for Grey Global Group, which WPP bought in March 05.) Organic revenue, which factors out currency changes and acquisitions/divestitures, rose 5.4%. In organic growth by discipline in 2006, WPP s advertising and media revenue increased 4.3% while non-advertising ventures rose 6.3%. WPP s operating profit margin was 14.5% in 2006, up from 14% in Profit margin for WPP s advertising and media operations rose to 15.8% (from 15.5%), a higher margin than WPP earned in its non-advertising businesses. PR profit margins, though, were close behind at a strong 15%. In North America, WPP overall profit margins in 2006 were 17%, up 0.4 points and highest for any region. WPP s stock in April 2007 hit $78.62, its highest price since the advertising bubble year of NEW BUSINESS WPP s 2006 reported net new billings grew $2.4 billion, reflecting about $4.7 billion in account wins and $2.3 billion in account losses, according to the tally of Bear, Stearns & Co. analyst Alexia Quadrani. WPP scored first in reported net new billings among the six ad holding companies ranked by Bear Stearns. WPP in 2006 had an adjusted net new billings gain of $442 million, taking second place behind Havas; Bear Stearns adjusted billings reduce media accounts to 25% of reported billings to more closely correlate with anticipated revenue. The adjusted net new billings translated to an expected annualized revenue gain of $53 million. Bear Stearns aggregates account shifts reported in media, but it doesn t claim its new-business tally is all-inclusive, particularly in marketing services and outside the U.S. and U.K. WPP, for its part, said it had 2006 estimated net new advertising billings of about $5.4 billion, reflecting close to $1.1 billion in creative wins and nearly $4.4 billion in media wins.adding in $963 million in creative wins from non-advertising businesses, WPP claimed $6.4 billion in net new billings. WPP s stated $1.1 billion in creative net new billings included $336 million at Ogilvy & Mather Worldwide; $279 million at JWT; $235 million at Grey Worldwide; and $200 million at Y&R. TOP CLIENTS On a pro forma basis in 2006 for WPP s 30 largest clients, WPP said 11 had lower spending while 19 were up. WPP in 2006 generated 5.5% of revenue, or $595 million, from its largest client, Ford Motor Co. In 2005, Ford accounted for 5.7% or $557 million of WPP revenue. The company s top 10 revenue clients in 2005 were, alphabetically, Altria Group, American Express, BAT, Ford, GlaxoSmithKline, IBM, Microsoft, Procter & Gamble, Pfizer and Unilever. Together, those clients kicked in about 23% of WPP revenue in WPP said it served more than 390 clients across three or more disciplines in It worked with nearly 220 clients in six or more countries. WPP had relationships in 2005 with more than 300 of the Fortune Global 500. DISCIPLINES AND REGIONS WPP said its reported revenue from advertising and media rose 8.5% in 2006, with organic growth of 4.3%. But media shops fared

10 April 30, 2007 Advertising Age 10 better than ad agencies: Group Chief Executive Martin Sorrell in February 2007 said media planning/buying revenue jumped 13%- 13.5% in 2006 (vs. growth around 14% in 2005 and 2004). He said advertising revenue has tended to be flat to up a little bit, reflecting a tougher time in traditional advertising. WPP in February 2007 said media continued to show the strongest growth of all our communications services sectors, along with direct, internet and interactive and specialist communications. Advertising and media kicked in 47.5% of WPP revenue and 51.6% of profits. WPP s revenue from branding, identity, health care and specialist communications rose 14.6% (reported) and 7.8% (organic). Market-research operations saw 2006 revenue grow 11.2% on a reported basis and 4.1% in organic. In WPP s public relations sector, reported revenue rose 12.4%; organic increased 5.9%. Revenue fell in one WPP sector, manufacturing (Wire and Plastic Products). In 2006, WPP generated: 79% of revenue from North America (39%) and Europe (40%). The rest came from what WPP refers to as faster growing markets (Asia-Pacific, Latin America, Africa and the Mideast). 52% of revenue from marketing services, with the rest from advertising/media. 67% of revenue from advertising, media and other marketing services, with 33% from quantitative disciplines (including market research, branding and consulting as well as direct marketing, internet and interactive). More narrowly, WPP said digital/interactive work generated 9% or $974 million of its 2006 revenue. STRATEGIC GOALS When WPP announced its 06 results in February 2007, the holding company reaffirmed its strategic goals: To generate two-thirds of revenue from marketing services in five to 10 years, according to Mr. Sorrell; to get one-third of revenue from faster growing markets ; to get half of revenue from quantitative disciplines. Mr. Sorrell told analysts in February 2007: In the future because of the fragmentation, because of the increase in complexity, we d like to see half our business in the measurable area quantitative disciplines basically because we believe that clients will not move any more without significant quantitative data for their decision-making. ACQUISITIONS WPP in 2006 completed 44 acquisitions of smaller firms, though it did no big deals like its 05 purchase of Grey Global for $1.52 billion. It continued with more fill-in deals in early CHINA DEALS Following various acquisitions in China, WPP ended 2006 with $500 million in revenue in Greater China (China, Hong Kong, Taiwan) and 7,300 people in that region (including associates, or those working for firms partly owned by WPP). Among WPP s China deals: WPP s Ogilvy Group China in September 2006 bought Black Arc Advertising, billed as China s leading agency specializing in real estate-related advertising and promotions. Also that month, Ogilvy Group reupped a joint venture with Shanghai Advertising Ltd. The firms 1991 venture was set to expire in October 2006; they extended it through Under the new agreement, Ogilvy continued to maintain a majority interest in the joint venture company. Ogilvy & Mather in October 2006 bought 70% of Beijing Century Harmony Advertising Co., a Chinese internet shop with 93 employees and 2005 revenue of $1.7 million. In December 2006, Ogilvy & Mather bought 49% of Beijing Raynet Advertising Co., a Chinese ad agency with 131 employees and 2005 revenue of $4.5 million. WPP s Millward Brown in June 2006 bought 95% of All China Strategic Research Co., a market research firm in China. All China was folded into Millward Brown s Chinese operations; WPP ended up with a majority stake of the merged Chinese business with an option to buy the rest. All China had 147 staffers and 2005 revenue of $6.2 million; clients include Procter & Gamble, Unilever and Wal- Mart. WPP did another China deal in May 2006 when its Group M bought 49% of Beijing Hua Yang Lian Zhong Advertising Co., an interactive media agency with 99 employees and 2005 revenue of $2.6 million. WPP s BatesAsia in May 2006 bought 75% of Beyond Communications Hong Kong, a marketing communications consultancy in Hong Kong with 11 staffers and revenue of $570,000 in the year ended April WPP s JWT in March 2006 bought Always Promotion Network, a China promo outfit. WPP's Grey ended a long-standing alliance in China with Citic Guoan Group when WPP rival Omnicom Group in June 2006 entered a partnership with Citic Guoan. OTHER DEALS WPP did other deals worldwide, with an emphasis on emerging sectors and regions. A chronology of recent WPP deals: WPP in April 2007 bought Tapsa, a Spanish marketing-communications firm with 202 employees and 2006 revenue of $42 million; and 49.9% of Clemmow Hornby Inge, a hot London-based ad agency (with a sibling direct and digital shop) that had 151 employees and revenue of $33.7 million in the year ended June 30, In another April 2007 deal, WPP's Research International bought Teenage Research Unlimited, Northbrook, Ill., a youth research outfit with 24 employees and stated 2006 revenue of $6.1 million. Also in April 2007, WPP bought a minority stake in VideoEgg, a San Francisco-based video ad network for online communities.

11 April 30, 2007 Advertising Age 11 VideoEgg had 53 people and clients including Unilever, Dell, NBC, Nestle and Universal. WPP in March 2007 said KnowledgeBase Marketing, a WPP database marketing firm, bought 51% of DataCore Marketing, a strategic marketing, data and fulfillment services venture in Kansas City, Kan. DataCore had 2006 revenue of $14.9 million. DataCore was founded in 1992 and had 119 employees. Also in March 2007, Ogilvy Group s Neo@Ogilvy, a digital and direct shop, bought 70% of Global Strategies International, a search marketing consultancy. Global Strategies, based in Farmington, Conn., employed 16 people and had 2006 revenue of $2.2 million. In other deals in March 2007, WPP bought 40% of Iconmobile, a Berlin-based mobile marketing firm with 2006 revenue of $8.2 million; 6.8% of Media Rights Capital, an entertainment-related financial firm in Los Angeles and New York; and, via WPP s Group M, a 75% stake in Quisma, a Munich-based marketing agency specializing in keyword advertising, affiliate marketing and search engine optimization with 29 employees and 2006 revenue of $19.2 million. WPP in January 2007 bought All Global Limited, a London market research firm with 44 staffers and revenue of $13.4 million. WPP s Grey Healthcare Group in January 2007 bought a majority of Comunicacion y Servicio Consultores de Marketing Publicidad, a Spanish health-care shop with 2005 revenue of $2.7 million. Group M in January 2007 bought Reddion, a Dutch digital media and customer-relationship management shop with 22 employees and 2005 turnover of $2.7 million. Also in January 2007, WPP bought 2.5% of JumpTap, a Cambridge, Mass., mobile search and advertising venture. WPP s BatesAsia in December 2006 acquired 74% of Sercon India Private Ltd., a New Delhi-based event management services outfit with 120 employees and revenue of $1.4 million in the year ended March In December 2006, WPP s JWT merged its Dutch branch, PPGH/JWT Groep, with independent Ubachs Wisbrun. WPP ended up with a 60% stake in the merged shop, Ubachs Wisbrun/JWT. Ubachs Wisbrun 2005 revenue was $10.6 million. WPP in November 2006 said it bought 3.2% of Spot Runner, an internet-based media shop and TV production outfit with 100 staffers in Los Angeles.(Interpublic Group of Cos. and CBS Corp. also made investments in Spot Runner.) Also in November 2006, Millward Brown, a WPP market research firm, bought ID Consultores, a research firm in Argentina. WPP in October 2006 bought a majority of Ray & Keshavan Design Associates, a Bangalore, India, branding outfit with 33 staffers and revenue of $1.3 million in the year ended March 2006.Also that month, WPP s Wunderman bought two South Korean marketing services ventures, SRP Corp. and ComHaus Korea. SRP had 12 staffers and 2005 revenue of $500,000. ComHaus had 10 employees and 2005 revenue of $700,000. WPP s G2 in September 2006 bought 70% of M/D/S Boole, a data, analytics and metrics consultancy in Spain with 18 staffers and 2005 revenue of $1.6 million. Also that month, WPP s Group M and Universal Music Group created a London-based 50/50 joint venture, BrandAmp, to develop music and brand partnerships for clients. Wunderman in September 2006 bought Shaw Marketing Group, a relationship marketing agency involved in alcohol, package goods and other areas. Shaw, based in New York, had 15 employees and 2005 revenue of $2 million. It was to operate as a new division, Shaw Wunderman. WPP in August 2006 bought DSG Strategies, a Washington, D.C., public affairs shop. The agency, commonly known as Dewey Square Group, had six U.S. offices, 53 staffers and 2005 revenue of $12.5 million. In its quest to seek ways its clients could tap customers online,particularly the harder-to-reach young-adult market, WPP in August 2006 took a minority position in WildTangent, an online game publisher that operated WildTangent Game Network, a video game ad network. Also that month, WPP bought a piece of Visible Technologies, an internet reputation management and information tracking outfit. In another August 2006 deal, WPP purchased Public Strategies, an Austin, Texas-based public affairs and crisis communications agency. Public Strategies, founded in 1988, had nearly 175 employees in 15 U.S. cities and two offices in London and Mexico City. WPP s Wunderman in July 2006 bought Zaaz, a Seattle interactive shop. Zaaz, founded in 1998, had 65 employees and 2005 revenue of $9.2 million. WPP and LiveWorld, a Los Gatos, Calif., online community builder, in July 2006 formed a joint venture, LiveWorld-WPP, to create social networking applications, including message boards and blogs. In June 2006,WPP s Group M bought Los Angeles-based M80,an online word-of-mouth marketing company. Group M in April 2006 bought IEG, a Chicago-based firm that provided research on sponsorships and promotions. In January 2006, WPP s Research International bought a majority of Poland s Pentor Research International.

12 April 30, 2007 Advertising Age 12 NO. 3:INTERPUBLIC GROUP OF COS. By BRADLEY JOHNSON Worldwide $6,190.8 $6, U.S $3,441.2 $3, Non-U.S $2,749.6 $2, Worldwide ,000 43, U.S ,000 18, Non-U.S ,000 25, INTERPUBLIC GROUP OF COS. continued its slight turnaround in 2006, posting a net loss ($31.7 million) that at least was below the annual losses it had piled up in the three previous years. Revenue slipped to $6.2 billion, down 1.3% or $83.5 million from Interpublic employed about 42,000 people worldwide at year-end 2006, down 2.3% from a year earlier (43,000). U.S. employment was about 18,000 both at year-end 2006 and ORGANIZATION Interpublic in March 2006 reorganized Lowe Worldwide, slashing its network of offices worldwide as part of the cost-cutting needed to return the holding company to profitability. In June 2006, Interpublic merged two other agency networks, Draft and FCB, into a new integrated marketing agency, DraftFCB. The merged agency is run by Chairman-CEO Howard Draft. In October 2006, Interpublic realigned its Universal McCann media unit with McCann Worldgroup and aligned Initiative with DraftFCB "to ensure that media thinking and expertise plays a central role in both brand and communications planning," the company said. Both media units retained their senior management and financial independence within the new operating structure. Interpublic's Magna unit was to continue to negotiate on behalf of the aggregated marketing clout of Interpublic media clients. Interpublic Media Council was formed in It had oversight of the Futures Marketing Group and of coordinated group-wide activities and capabilities, such as Magna, Magna Trading (media barter) and OSI (outdoor media), as well as Interpublic's future media strategy, including M&A and investment priorities. The Futures Marketing Group, created in 2006, brought together Interpublic's specialist and digital capabilities to serve as an incubator for media tools and solutions. Components of the group included the Interpublic Emerging Media Lab, The Consumer Experience Practice (TCEP), Wahlstrom and NSA (Newspaper Services of America). Bant Breen became president of the Futures Marketing Group in February 2007, moving from Interpublic s director of strategic development and innovation. A new member of the Futures Marketing Group will soon be Reprise Media, a New York-based provider of search engine marketing (SEM) that Interpublic agreed to acquire in April Reprise Media will remain a stand-alone unit and will partner with agencies throughout the holding company as well as seek its own clients. It continues to be led by founders and managing partners, Peter Hershberg and Joshua Stylman. The Emerging Media Lab is both a physical and a virtual space. Based in Los Angeles, it allows visitors to sit in a digital living room, brainstorming ideas as they test a multitude of entertainment scenarios, drink espresso in a "smart" kitchen where they can check their on the refrigerator, and view presentations in a high-tech conference room. Interpublic made other moves with its management and board. It named Christopher Carroll senior VP-controller-chief accounting officer in April 2006, succeeding Nick Cyprus. (Mr. Cyprus joined General Motors Corp., Interpublic s largest client, as controller and chief accounting officer in December 2006.) Mr. Carroll had been controller at McCann Worldgroup since November 2005 and previously was controller at Eyetech Pharmaceuticals. Former CEO David Bell retired as co-chairman in early 2006, five years after the board of True North Communications where he had been CEO picked a takeover offer from Interpublic over competing bids from Omnicom Group and Havas. After stepping down as cochairman, Mr. Bell became Interpublic chairman emeritus. In board maneuvers, Frank Borelli stepped down as presiding director in May 2006 and was succeeded by Richard Goldstein, a board member since Mr. Borelli continued as a director. William T. Kerr, 65, chairman of Meredith Corp., joined the board in October Interpublic holdings consist of: Integrated Agency Network: McCann, DraftFCB, Lowe, media agencies (Initiative, Universal McCann), standalone agencies (including Campbell-Ewald, Campbell Mithun, Deutsch, Hill Holliday, Martin Agency and Mullen). Constituency Management Group: marketing services such as public relations (including WeberShandwick), event marketing (Jack Morton), branding (FutureBrand) and sports marketing (Octagon). Interpublic owns a stake in various multicultural shops including Abece (Hispanic), Accentmarketing (Hispanic), Axis Agency (African-American), Casanova Pendrill (Hispanic), IW Group (Asian-Pacific American) and Siboney USA (Hispanic) RESULTS Interpublic revenue declined 1.3% in 2006 to $6.2 billion. Revenue each year from 2002 through 2006 stayed in a narrow band of about $6.1 billion to $6.4 billion (after various restatements) even as the ad market was rebounding from the 2001 recession.

13 April 30, 2007 Advertising Age 13 U.S revenue fell 0.6%; it rose 0.5% on an organic basis. International 2006 revenue fell 2.3%; it rose 1.5% on an organic basis. Globally, Interpublic saw the fastest 2006 growth in Latin America (up 16.8%) and Asia-Pacific (up 8.1%). Interpublic said overall 2006 organic revenue, which factors out divestitures and currency changes, increased 1%, primarily due to higher revenue from existing clients. Organic revenue in 2005 fell 0.7%. Interpublic had a 2006 operating margin (operating income divided by revenue) of 1.7%, a low return but at least a turnabout from 2005 s -1.7%. In its February K, Interpublic said: Our strategy is focused on improving organic revenue growth and our operating income, and we are working to achieve a level of organic revenue growth comparable to industry peers and double-digit operating margins by Interpublic noted 2006 organic revenue increased in both the U.S. and outside the U.S. The international organic increase was driven by higher revenue from existing clients primarily in the Asia-Pacific and Latin America regions partially offset by net client losses, primarily in 2005, at [Integrated Agency Networks (McCann, DraftFCB, standalone agencies)] as well as decreases in the events marketing businesses in the United Kingdom, Interpublic said in its February K. The domestic organic increase was primarily driven by growth in the public relations and branding businesses as well as higher revenue from existing clients, partially offset by net client losses and decreased client spending at Integrated Agency Networks. Revenue for Integrated Agency Networks in 2006 fell 1.8%; it rose 0.7% on an organic basis. Interpublic said the revenue decline in 2006 was a result of net divestitures, primarily from the sale of several businesses at DraftFCB and McCann in 2005, partially offset by an organic increase and changes in foreign currency exchange rates. It said the organic increase was driven primarily by McCann and DraftFCB, partly offset by decreases at Lowe and at The Works, a GM-dedicated agency. Interpublic said the organic increase at McCann was the result of higher revenue from existing clients across domestic and international regions, primarily Asia-Pacific and Latin America. McCann s increase, the company said, was primarily driven by digital, direct and event marketing. The increase at DraftFCB was mainly the result of increased spending from existing clients partly offset by net client losses, primarily in 2005, across domestic and most international regions, primarily Europe, Asia-Pacific and Latin America. The decrease at Lowe was mostly due to reduced spending by existing clients and net client losses, mainly in domestic locations in The revenue decrease at The Works was primarily due to the loss of GM s U.S. media buying business in Revenue at Constituency Management Group rose 1.7%; it grew 2.8% on an organic basis. Interpublic said growth was a result of organic revenue increases in its U.S. public relations and branding businesses due to higher revenue from existing clients. Additionally, it said, there were U.S. organic revenue gains in sports marketing and events marketing due to higher revenue from existing clients and client wins. It said the domestic increase was partly offset by declines at some agencies that lost clients. Outside the U.S., the decline related primarily to a decrease in events marketing and sports marketing from client losses. The international decrease was partly offset by increases in PR and branding due to higher revenue from existing clients. Cost cutting was a big part of Interpublic s Investor Day presentation in March Exec VP-CFO Frank Mergenthaler said Interpublic would reduce the number of financial systems across Interpublic from 150 to four and trim the 1,350 legal entities worldwide to around 800. Interpublic has been working through accounting issues and performance issues since its accounting troubles came to light in summer It made progress in 2006, getting past some of the material weaknesses in financial controls that had dogged the company. There was continued speculation in 2006 about whether Interpublic might be a takeover prospect. Publicis Groupe in late 06 was said to be weighing a potential bid; Publicis Chairman-CEO Maurice Levy strenuously denied that. Not long after those reports, Publicis struck a smaller deal, swallowing interactive shop Digitas. Publicis does have an interest in Interpublic: As of December 2006, it owned a 1.2% equity stake. Publicis received those shares in 2001 when Interpublic bought True North Communications, in which Publicis owned a 9% stake as the result of a one-time alliance with Foote Cone & Belding. Publicis classifies its Interpublic shares as available-for-sale assets. Interpublic s stock from 2006 to early 2007 hit multi-year highs and lows.the stock fell sharply after the company in early June 2006 announced a complex agreement for a new line of credit. Chairman- CEO Michael Roth around that time said, I expected the stock to drop because of the unique structure of the financing, but added, I expect through the rest of the year it will level off when the impact of this (credit) transaction is understood. Executives ended up getting stock option grants when shares were at a depressed price; Mr. Roth, for example, received options to buy 577,700 shares over time at the June 15, 2006, price of $8.655 price, near a three-year low; an Interpublic spokesman said the timing was a coincidence since the board's compensation committee in March 2006 had picked June 15 as pricing date for options. Interpublic s stock kept tumbling in July 2006 to a three-year low of $7.79. But Mr. Roth s optimism proved well-founded: The stock rebounded in the second half of 2006 and then in January 2007 hit $13.94, highest price since he became CEO in January 2005 (though far below its bubble-era December 1999 peak, $58.375). The stock as of late April 2007 traded near $13. Interpublic in 2006 remained under a formal SEC investigation relating to its financial restatements. We continue to

14 April 30, 2007 Advertising Age 14 cooperate with the investigation, it said in its February K. We expect that the investigation will result in monetary liability, but because the investigation is ongoing, in particular with respect to the 2005 restatement, we cannot reasonably estimate the amount, range of amounts or timing of a resolution. NEW BUSINESS Interpublic in 2006 had a loss of $457 million in reported net new billings, reflecting about $3.1 billion in account wins and $3.5 billion in account losses, according to the tally of Bear, Stearns & Co. analyst Alexia Quadrani. That was worst among the six ad holding companies ranked by Bear Stearns. Bear Stearns also scored Interpublic worst in 2006 adjusted net new billings with a loss of $214 million; adjusted reduces media accounts to 25% of reported billings to more closely correlate with anticipated revenue. The adjusted net new billings translated to an expected annualized revenue loss of $28 million. TOP CLIENTS Interpublic s top 10 clients accounted for about 25% of revenue in 2006 and Based on 2006 revenue, Interpublic s largest clients, ranked in order of size, were General Motors Corp., Johnson & Johnson, Microsoft Corp., Unilever and Verizon. For the first time in decades, Interpublic s February K annual report didn t disclose the revenue contribution of its largest client. An Interpublic spokesman said the company will reassess reporting that data in future years; Interpublic s key competitors routinely disclose such data. Ad Age estimates that the largest client, General Motors, contributed 6.5% or $400 million in 2006, down sharply from a stated 8%, or about $500 million, in 2005, as the troubled automaker slashed spending. (The reduced 2006 revenue also reflected that GM effective October 2005 moved U.S. media buying to Publicis from Interpublic. That assignment had generated an estimated $45 million to $50 million in annual revenue for Interpublic.) Back in 1979, Interpublic generated 15% of revenue from GM. Interpublic in spring 2007 faced new challenges on its No. 2 client: Johnson & Johnson in late March 2007 began a global review of media planning and buying. Interpublic's Universal McCann handled a large amount of North American media work (shared with Omnicom's OMD); Universal McCann and sibling Initiative were key agencies on J&J s non-u.s. roster. Regardless of how the J&J review turned out, it s conceivable that Microsoft will be Interpublic s second-largest revenue client for calendar Notably, for Interpublic s 100 largest clients (representing about half of total revenue), tech/telecom emerged as the biggest sector in 2006, contributing 26% of the top 100 clients revenue. Health/personal care and auto/transportation ranked second and third. DISCIPLINES AND REGIONS Interpublic said 58% of 2006 revenue came from advertising and media; 42% came from marketing services. In March 2006, Interpublic said advertising and media accounted for 63% of 2005 revenue, with the rest from marketing services. In February 2007, Mr. Mergenthaler said that reported 05 split had overstated advertising and media, not accurately parsing some of the [McCann] Worldgroup revenue base and not quantifying that standalone ad agencies did some marketing services work. He added that Interpublic was driving toward a 50/50 mix of advertising/media and marketing services. Interpublic generated 55.6% of 2006 revenue from the United States. Europe, excluding the U.K., kicked in 16.8%; the U.K. supplied 9.1%. Asia Pacific accounted for 8.3%; Latin America, 4.9%. Other areas contributed 5.3%. AGENCY DEALS Interpublic in April 2007 announced its first acquisition since 2004: It agreed to buy Reprise Media, a search engine marketing firm. Reprise was to remain a stand-alone unit as part of Interpublic s Futures Marketing Group. Reprise had offices in New York, Boston and San Francisco. Interpublic, working to simply its structure after its overload of deals in the 90s and early this decade, did not complete any acquisitions in 2005 and The company disposed of 51 businesses in 2005 and 2006, primarily outside the U.S. Specifically, Interpublic said it exited 23 "lossmaking international affiliates" in Two U.S. ad agencies Stein Rogan & Partners, New York, and Howard, Merrell & Partners, Raleigh, N.C. bought themselves back from Interpublic in GlobalHue, a U.S. multicultural agency, in 2006 bought back the 49% stake owned by Interpublic. Interpublic completed two acquisitions in 2004, two in '03 and nine in '02. In January 2007, Interpublic cut loose OneSeven, the landing place for the so-called Saatchi 17, which, composed of that number of staffers serving the General Mills account at Saatchi & Saatchi, left the agency in February 2005 with hopes of taking the account. OneSeven Chairman Mike Burns, a former Saatchi vice chairman and worldwide account director on General Mills, was striking out on his own. "We are now looking forward to building our business with an independent's focus and an entrepreneur's energy," he told Ad Age. The agency's clients included: ConAgra's Hebrew National; Gorton's seafood; McGraw-Hill's BusinessWeek; Dun & Bradstreet; and Unicef. In January 2007, Interpublic and Frank Lowe ended a year-long battle, withdrawing their claims against each other. Mr. Lowe, who founded and sold ad agency Lowe to Interpublic, came out of retirement in December 2005 to start a new London shop. The new shop, Red Brick Road, opened in March 2006 with the $80 million account of retailer Tesco, poached from Lowe s London office. German shop Springer & Jacoby in October 2006 was sold to Avantaxx, an investor unit owned by the Schaffhausen agency group. Interpublic, which had owned 51% of S&J, is no longer

15 April 30, 2007 Advertising Age 15 involved in the agency, nor are its founders, Konstantin Jacoby and Reinhard Springer. Interpublic struck deals with several web ventures in 2006 and In February 2007, Interpublic entered a partnership with Spongecell, taking a preferred equity stake in the web services outfit. Spongecell helps event planners and promoters manage events. In October 2006, Interpublic bought a small piece of Spot Runner, an internet-based media shop and TV production outfit. (WPP Group and CBS Corp. also made investments in Spot Runner.) In June 2006, Interpublic formed a strategic partnership with Facebook, buying a tiny 0.5% stake in the social networking site. Contributing: R. Craig Endicott NO. 4:PUBLICIS GROUPE By BRADLEY JOHNSON bjohnson@adage.com Worldwide $5,872.0 $5, North America $2,672.8 $2, Outside North America.....$3,199.2 $2, Worldwide ,989 40, North America ,940 13, Outside North America ,049 26, PUBLICIS GROUPE, the fourth-largest marketing organization, generated about 70% of 2006 revenue from traditional advertising and media and 30% from a range of marketing services. The marketing services portion will grow with its January 2007 acquisition of Digitas, an interactive and direct-marketing agency group. Publicis employed 39,939 people in 104 countries and more than 200 cities as of December 31, 2006, up 3.4% 1,329 jobs from a year earlier. That tally doesn t include the 2,050 staffers who joined Publicis in the Digitas deal. Factor in Digitas, and Publicis on a pro forma basis had about 42,000 employees and revenue of $5.87 billion in In the accompanying table, revenue and job figures are pro forma for 2006 and 2005, including Digitas figures in Publicis for both years. ORGANIZATION Publicis in 2006 launched a new-media venture, Denuo, to focus efforts in digital communications (internet, video games, mobile phones, ipod). Denuo, part of Publicis Groupe Media, had three elements: strategic consulting; developing new solutions; investments in partnerships. Publicis April F annual report said: Denuo acts in partnership with or as a supplement to [Publicis] networks in order to enhance the solutions proposed to clients. It also serves its own clients independently. Publicis made several management moves in In October 2006, Publicis Worldwide COO Rick Bendel resigned after 20 years at Publicis to be group marketing director for Wal-Mart operations in the U.K. Richard Pinder, then age 42, succeeded him as COO. Mr. Pinder had been president of sibling Leo Burnett EMEA since Also, Olivier Fleurot, 54, former chief executive of the Financial Times Group, was hired as executive chairman of the Publicis network; Mr. Pinder reports to him. The company s Marcel creative boutique, launched only in 2005, lost its top executives when they bolted in October 2006 to form their own ad agency with financial backing of Vincent Bollore, chairman and lead shareholder of rival Havas. Frederic Raillard and Farid Mokart, who ran Marcel, linked up with Christophe Lambert, who headed Publicis Conseil, to form Fred Farid Lambert. Mr. Bollore took a 30% interest in the venture, with the three principals equally dividing the rest. Publicis replaced the top two with co-presidents Anne de Maupeou and Frederic Temin. Marcel clients included Nestle Waters, Heineken, United Biscuits, Pernod-Ricard, Coca-Cola and Unilever. A Publicis-backed agency in New York, Droga5, made a splash in 2006 at the Cannes Lions International Advertising Festival, winning a cyber Grand Prix and two of the three U.S. media Lions for its work on Ecko. That was virtually the first creative work out of the shop. Mr. Droga had left Publicis as worldwide chief creative officer to set up Droga5. Louis Capozzi became chairman emeritus of Publicis Public Relations and Corporate Communications Group at year-end He had been chairman of the PRCC unit since its founding in April RESULTS Publicis 2006 revenue grew 7.3% to $5.5 billion after factoring in euro-to-dollar currency changes. Reported revenue in euros rose 6.3%. Publicis closed its acquisition of Digitas Jan. 31, On a pro forma basis, if Publicis had owned Digitas in 2006, then Publicis' 2006 revenue would have been nearly $5.9 billion within striking distance of the No. 3 ad organization, Interpublic Group of Cos. ($6.2 billion). Net income in 2006 rose 12.8% to $551 million based on U.S. Generally Accepted Accounting Principles and after factoring in euro-to-dollar currency changes. Net income in euros increased 11.6% based on U.S. accounting rules and 14.8% as Publicis reported income (using International Financial Reporting Standards).

16 April 30, 2007 Advertising Age 16 Organic revenue, which factors out acquisitions/divestitures and currency changes, rose 5.6%. Organic revenue increased 5.1% in North America, 5% in Europe, 5.3% in Asia-Pacific, 9.3% in Latin America and 20% in Middle East/Africa. Publicis in early 2007 said it expected its 2007 business in Europe and the U.S. to grow at comparable levels to 2006, with emerging markets growth showing further acceleration in Publicis reported a 2006 operating margin of 16.3%, a record for the company and an increase from 15.7% in In February 2007, Publicis said it had a 2008 target operating margin of 16.7%. Publicis stock March 21, 2007, reached $49.40, highest point since the shares began U.S. trading Sept. 12, 2000 (at $37). The stock s low point since its U.S. debut was $14.75 on Oct. 2, 2001, shortly after 9/11. Publicis holdings consist of: Traditional advertising services: Publicis, Saatchi & Saatchi and Leo Burnett networks. Other ad agencies including Fallon, Kaplan Thaler Group and French agency Marcel. Publicis also owns 49% of Bartle Bogle Hegarty, a U.K.-based agency. Specialized agencies and marketing services: public relations (Publicis Public Relations and Corporate Communications Group, including Publicis Consultants, Manning Selvage & Lee and Freud Communications); healthcare communications for pharmaceuticals (Publicis Healthcare Communications Group); direct marketing, customer relationship management, sales promotion, interactive (Leo Burnett network s Arc Worldwide, Publicis network s Publicis Dialog, Saatchi network s Saatchi & Saatchi X, Digitas Inc.); multicultural (Hispanic shops Lapiz and 49%-owned Bromley Communications, urban shop Vigilante, 49%-owned African- American agency Burrell Communications); events marketing (Publicis Events Worldwide); and design. Media services: Publicis Groupe Media, consisting of Starcom MediaVest Group, ZenithOptimedia and new-media venture Denuo. Publicis also operates, mainly in France, a media sales unit, Medias & Regies Europe, for advertising in print, movie theaters and outdoor and on radio. Japanese ad firm Dentsu owns about 15% of Publicis under a strategic relationship forged when Publicis bought Dentsu-backed Bcom3 Group in Publicis as of December 2006 owned 1.2% of Interpublic. In its April F, Publicis classified those shares as available-for-sale assets. Publicis received the shares in 2001 when Interpublic bought True North Communications, in which Publicis owned a 9% stake as the result of a one-time and long-aborted alliance with Foote Cone & Belding. There was renewed speculation in 2006 about whether Interpublic might be a takeover prospect.publicis in late 06 was said to be weighing a potential bid; Publicis Chairman-CEO Maurice Levy strenuously denied that. Not long after those reports, Mr. Levy struck a smaller deal, acquiring Digitas. NEW BUSINESS Publicis in 2006 had a loss of $156 million in reported net new billings, reflecting nearly $2.9 billion in account wins and a bit more than $3 billion in account losses, according to the tally of Bear, Stearns & Co. analyst Alexia Quadrani. That placed Publicis fifth among the six ad holding companies ranked by Bear Stearns. Bear Stearns also scored Publicis fifth in 2006 adjusted net new billings with a loss of $64 million; adjusted reduces media accounts to 25% of reported billings to more closely correlate with anticipated revenue. The adjusted net new billings translated to an expected annualized revenue loss of $14 million. Bear Stearns aggregates account shifts reported in media, but it doesn t claim its new-business tally is all-inclusive, particularly in marketing services and outside the U.S. and U.K. Publicis, for its part, said it had 2006 net new business of $3.3 billion, including marketing-services wins, down 66% from 2005 s $9.8 billion. Publicis said its 2006 key advertising and marketing services wins included: Renault (contract extended to cover Latin America and Baltic states); Sanofi Aventis/Vaccins Pasteur (worldwide); Orange (Europe); Marriott (Asia); Kraft (marketing services Europe); JC Penney (U.S.); Wal-Mart (U.S. in-store marketing; Sony Ericsson (worldwide); InterContinental s Crowne Plaza Hotel & Resorts (U.S.). Media wins in 2006 included Washington Mutual (U.S.), Oracle (worldwide), Avaya (worldwide), Del Monte (Europe) and Beam Global Spirits & Wine (worldwide). Publicis said key 2006 losses included General Motors Corp. s Cadillac (U.S.), Heineken (U.S.) and SFR (France) in advertising; and Sprint (U.S.) and Nokia (Asia) in media. It also noted decreases in business, including Hewlett-Packard Co. s Personal Systems Group advertising in North America, Latin America and Europe. (HP pulled a large part of its Personal Systems work from Publicis in 2006.) TOP CLIENTS Publicis top five and ten clients accounted for about 25% and 35% of 2006 revenue, respectively. Its largest client, Procter & Gamble Co., supplied about 10% of revenue in both 2006 and The holding company in February 2007 said its clients included 38 of the Fortune Global 500 s top 100. Publicis said its largest clients by network were, alphabetically: Publicis: Cadbury-Schweppes; Coca-Cola Co.; Hewlett-Packard; L Oreal; Nestle; Pernod Ricard; Procter & Gamble; Renault; Sanofi- Aventis; Siemens; Telefonica; UBS; Whirlpool Corp.; Zurich Financial. Leo Burnett: Coca-Cola; Diageo; Walt Disney Co.; Fiat; General Motors; H.J. Heinz Co.; Kellogg Co.; McDonald s Corp.; Philip Morris; Procter & Gamble; Samsung; Samsung; Wm. Wrigley Jr. Co. Saatchi & Saatchi: Ameriprise; Avaya; Bel; Bristol-Myers Squibb/Mead Johnson; Carlsberg; Deutsche Telekom/T-Mobile; Diageo/Guinness; Emirates Airline; General Mills; JC Penney; Novartis; P&G; Sony Ericsson; Toyota/Lexus; Visa Europe; Wal-

17 April 30, 2007 Advertising Age 17 Mart. Starcom MediaVest Group: Coca-Cola; Disney; GM; Kellogg; Kraft; Masterfoods; Miller Brewing Co.; Philip Morris; P&G; Sara Lee. ZenithOptimedia: 20th Century Fox; British Airways; Hewlett- Packard; JP Morgan Chase; Lloyds TSB; L Oreal; LVMH; Nestle; Puma; Richemont Group; Sanofi-Aventis; Toyota/Lexus; Verizon; Whirlpool; Zurich Financial. Publicis said clients of newly acquired Digitas Inc. included: American Express Co., AstraZeneca, AARP, Bristol-Myers Squibb, Cingular (part of AT&T), Delta Air Lines, GM, Heineken, Hewlett- Packard, Home Depot, IBM Corp., InterContinental Hotels Group, Kraft Foods, Lloyds TSB, Procter & Gamble, Pfizer, Sanofi-Aventis, Time Warner, Whirlpool, Wyeth and Wells Fargo. Digitas Inc. in 2005 generated 26% of fee revenue from its top client, American Express. No. 2 client GM also a key Publicis client kicked in 22% of Digitas 2005 fee revenue. Digitas Inc. s top 10 clients in 2005 accounted for about 67% of fee revenue. In the first nine months of 2006, AmEx accounted for 26% of Digitas Inc. revenue (vs. 27% a year earlier); GM s share of revenue slumped to 17% (from 22%). DISCIPLINES AND REGIONS Traditional advertising generated 44% of 2006 revenue (down from 46% in 2005). Specialized agencies and marketing services accounted for 30% of 06 revenue (up from 28%). Publicis said media services produced 26% of 06 revenue (the same as 2005). The revenue split will change after the integration of Digitas, acquired in January Publicis said the 2006 split, had it owned Digitas that year, would have been 42% from traditional advertising, 34% from specialized agencies/marketing services and 24% from media. Digital and interactive communication sector should represent approximately 15% of our revenues, Publicis said in its April K filing. (WPP, the only other member of the Big 4 marketing groups that discloses a digital figure, said that digital/interactive accounted for 9% of its 2006 revenue.) Publicis in 2006 generated 42% of revenue from North America (down from 42.7% in 2005); 39.8% in Europe (vs. 39.9%); 10.7% in Asia Pacific (vs. 10.5%); 4.9% in Latin America (vs. 4.6%); and 2.6% in Middle East/Africa (vs. 2.3%).(Digitas Inc. in 2006 generated 95% of its revenue from North America; the other 5% came from Europe.) As noted, Publicis reported a 2006 operating margin of 16.3% (up from 15.7% in 2005). North America led the way with an operating margin of 18% (vs. 17.4%), followed by Europe (15.9% vs. 15.2%) and rest of world (13% vs. 12.8%). Publicis attributed rising margins in North America and Europe largely to efforts to reduce operating costs by centralizing back-office functions and sharing resources across operating units. Publicis by year-end 2006 had shared-service centers operating in 14 countries where it generates more than 80% of revenue. One cost-saving move: a centralized travel-procurement effort. Publicis said in its April F filing: All regions benefited from increased spending on advertising in 2005, while North America and, to a lesser degree, Europe benefited from sizable growth in the media business and healthcare communications. Although more moderate than in 2005, growth in North America remained sound in 2006, despite the impact of budget losses in late 2005 and early Business in Europe remained strong throughout Growth in other parts of the world was lower than expected, principally because of slower growth in China, Korea and Brazil in That 20-F filing said North America generated 5.1% organic growth in The increase, Publicis said, was primarily due to increased media buying and consultancy business (Publicis Groupe Media), healthcare communication of Saatchi & Saatchi and of the Kaplan Thaler Group, which benefited from large new accounts booked in 2005, and increased spending by some existing clients. The 20-F filing noted 2006 organic growth in Europe of 5%. Most networks contributed to the growth, with the exception of Leo Burnett, which was impacted by losses or decreases in accounts, an insufficient level of new business bookings and changes in management teams that affected several markets in continental Europe, Publicis said. The strongest performances were from Starcom MediaVest, ZenithOptimedia and [Publicis Healthcare], which was stimulated by increased spending by and growth of some existing clients. Growth was most robust in Great Britain, Germany, Switzerland and Northern and Eastern Europe, particularly in Russia, while France and Italy showed average growth. Spain was the most difficult market in 2006, as revenues in Spain decreased compared to Publicis generated 2006 organic growth of 8.2% in the rest of world, including 5.3% in Asia-Pacific, 9.3% in Latin America and 20% in Africa/Middle East. Highest growth rates were recorded in India, Mexico, Venezuela and Argentina, Publicis said. Growth in Asia in 2006 was relatively disappointing due to decreased business in (South) Korea and also due to the group s decision to be more selective in its commercial policies in China. North American employment dropped slightly to 11,990 people at year-end 2006 from 12,158 a year earlier. Publicis said 15,000 (38%) of its employees in 2006 were in emerging markets. In its February 2007 earnings release, it proclaimed strong market positions in China, Russia, Turkey, Mexico and Brazil. Publicis in February 2007 said its target was to generate 25% of 2010 revenue in emerging markets. AGENCY DEALS Publicis in December 2006 struck a deal completed Jan. 31, 2007 to buy marketing services company Digitas Inc. for $1.3 billion. Digitas reported the deal would give it greater media-buying scale with giant online-media sellers including Google and Yahoo. Even Publicis rivals had positive comments on the Digitas acquisition. WPP Group Chief Executive Martin Sorrell in February 2007

18 April 30, 2007 Advertising Age 18 told analysts: For what it s worth, I think Publicis acquisition of Digitas was smart, but it was expensive. Interpublic's CFO, Frank Mergenthaler, told analysts in March 2007: "I think that the Digitas acquisition for Publicis was a good move for a variety of reasons." Digitas generated 2006 revenue of $390 million, according to a February 2007 Publicis disclosure. That s 14.5% above the $340.5 million that Digitas reported in 2005 fee revenue. Digitas at year-end 2006 employed 2,050 people, up 18% or 310 people from year-end 2005 (1,740). Much of that gain and much of the 2006 revenue increase for Digitas reflected the January 2006 acquisition by Digitas of Medical Broadcasting Co., which employed about 140 people when it was acquired (and 160 at year end). Medical Broadcasting in April 2007 changed its name to Digitas Health. The other Digitas Inc. units are agencies Digitas and Modem Media. Publicis said in January 2007 it was seeking other internet-related acquisitions in China, India and Europe that would make Publicis a global leader in digital marketing. We intend to own this space, said Mr. Levy. That search was to be led by Digitas Chairman-CEO David Kenny, now on the Publicis executive committee and in charge of Publicis digital-marketing strategy. Publicis denied one potential deal: Press rumors in early January 2007 that Publicis was about to mount a second takeover bid for Aegis Group were without foundation, according to a Publicis statement. Publicis unwound other ventures: Publicis and Dentsu both 45% owners of ise Hospitality AG, formed to manage and organize hospitality logistics for the 2006 FIFA World Cup began dismantling the operation in January 2007 for lack of future contracts. In July 2006, Publicis sold Bensimon Byrne, a Toronto ad agency, to a management group. Publicis in April 2007 bought McGinn Group, a U.S. corporate communications outfit that took the new name McGinn MS&L. Publicis in April 2007 bought 51% of Yong Yang, a Chinese marketing-services firm specializing in field force logistics and retail and promotional marketing with 29 offices across the country. Publicis in March 2007 bought Pharmagistics, a Somerset, N.J.- based healthcare direct-marketing agency. The unit was placed in the Publicis Healthcare Communications Group. Publicis in October 2006 bought Emotion, a Toyko-based event management group that had expanded to Shanghai, Beijing, Seoul, Bangkok, Manila and Singapore since its founding in The shop was planning expansion to Taiwan and Hong Kong in Emotion was now under Publicis Events Worldwide, whose agency ECA2 was selected for opening ceremonies at the 2008 Olympic Games in Beijing. In August 2006, Publicis acquired Moxie Interactive, an Atlanta firm specializing in interactive media advice and buying. Publicis integrated Moxie into the ZenithOptimedia network. In July 2006, Publicis bought BOZ Group, a healthcare-communications outfit in France. Publicis media-sales unit (Medias & Regies Europe) and Simon Property Group formed a joint venture in May 2006 to sell commercial time on screens placed in U.S. shopping malls. The venture, OnSpot Digital Network, delivered high-definition content on about 2,000 screens in 50 Simon malls in 10 major U.S. cities. In April 2006, Publicis acquired Duval Guillaume, a Belgian advertising and marketing-services shop with offices also in Antwerp, New York and Paris. The agency remained autonomous within Publicis Groupe. In March 2006, Publicis bought 80% of Betterway Marketing Solutions, a Shanghai-based marketing-services agency. The acquisition came several months after Publicis boosted its sports-marketing operation in the region. In other deals, Publicis in 2006 bought: Pole Nord, a French firm focused on internet keyword research. Publicis integrated Pole Nord into the ZenithOptimedia network. majority stake in Turkish communications shops Yorum, Allmedia, Bold and Zone, which together employed 155 professionals. The renamed Publicis Yorum is an ad agency; Starcom Allmedia is a media shop; Bold, a direct shop, became part of Publicis Dialog; Zone, a PR shop, became part of the Publicis Consultants network. 60% stake in Solutions Integrated Marketing Services, billed as the leading marketing services agency in India. 21% stake in Capital MS&L, increasing its investment in the U.K. financial-communications agency to 51%. HOLDING COMPANY NEW BUSINESS SCORECARD: 2006 Ranked by net adjusted new-business billings WINS LOSSES NET NET. REV. RANK COMPANY REPORTED ADJUSTED REP. ADJ. REP. ADJ. CHG. 1 Havas $1,930 $1,832 -$1,030 -$949 $900 $883 $106 2 WPP Group 4,639 2,307-2,259-1,865 2, Aegis 1, Omnicom 3,040 2,403-3,130-2, Publicis 2,887 2,022-3,042-2, Interpublic 3,063 2,495-3,519-2, Total 17,127 11,487-13,927-10,143 3,200 1, % chg, 06 1 vs % -5.0% -7.4% 12.2% % -61.3% Notes: Dollars in millions; numbers rounded. "Adjusted" means billings of media accounts adjusted to 25% of reported billings to more closely correlate with anticipated revenue. New-business estimates are not comprehensive and don't capture all account moves, especially in marketing services and outside the U.S. and U.K. 1. Year-on-year % chg. excluding Aegis. (Aegis was added to ranking in 2006.) Source: Bear, Stearns & Co.'s Alexia Quadrani

19 April 30, 2007 Advertising Age 19 WORLD S TOP 50 MARKETING ORGANIZATIONS Ranked by worldwide revenue in 2006 RANK WORLDWIDE REVENUE U.S. REVENUE MARKETING ORGANIZATION HEADQUARTERS % CHG % CHG 1 1 Omnicom Group New York $11,376.9 $10, $6,194.0 $5, WPP Group London 10, , , , Interpublic Group of Cos. New York 6, , , , Publicis Groupe Paris 5, , , , Dentsu Tokyo 2, , Havas Suresnes, France 1, , Aegis Group London 1, , Hakuhodo DY Holdings Tokyo 1, , NA 9 13 aquantive Seattle Asatsu-DK Tokyo MDC Partners Toronto/New York Sapient Corp. Cambridge, Mass Carlson Minneapolis Epsilon Irving, Texas Aspen Marketing Services West Chicago, Ill Cheil Communications Seoul George P. Johnson Co. Auburn Hills, Mich HealthStar Communications Woodbridge, N.J LBI International Stockholm Media Square* London inventiv Communications Westerville, Ohio Cossette Communication Group Quebec City Harte-Hanks Direct Langhorne, Pa Clemenger Communications Melbourne NA Doner Southfield, Mich Notes: Dollars in millions. Revenue supplied by companies via Ad Age questionnaire, obtained from public documents or estimated by Ad Age. An asterisk (*) indicates estimate. WPP, Publicis and Havas U.S. totals are actually for North America. The 2005 figures are based on data collected and/or adjusted in Foreign currency conversions for the above: euro at $ in 2006 vs. $ in 2005; British pound at $ vs. $1.8125; Japanese yen at $ vs. $ ; Australian dollar at $ vs. $ ; Canadian dollar at $ vs. $ See report methodology in DataCenter at adage.com, where a free Agency Profiles Yearbook (a PDF) also can be downloaded. The Yearbook provides profiles and data on the world s Top 50 marketing organizations and the world s 10 largest independent agency networks.

20 April 30, 2007 Advertising Age 20 WORLD S TOP 50 MARKETING ORGANIZATIONS Ranked by worldwide revenue in 2005 RANK WORLDWIDE REVENUE U.S. REVENUE MARKETING ORGANIZATION HEADQUARTERS % CHG % CHG STW Group Sydney NA Media Consulta Berlin NA Richards Group Dallas Mosaic Sales Solutions Irving, Texas Alloy Media & Marketing New York Merkle Lanham, Md Protocol Integrated Direct Mktg. Sarasota, Fla Tokyu Agency Tokyo NA Chime Communications London M&C Saatchi London Creston* London NA Bartle Bogle Hegarty* London Wieden & Kennedy Portland, Ore Marketing Store Lombard, Ill TBA Global Woodland Hills, Calif Cramer-Krasselt Chicago Scholz & Friends Group Hamburg NA RPA Santa Monica, Calif Serviceplan Agenturgruppe Munich NA Armando Testa Group Turin NA AKQA San Francisco Ambrosi Chicago IMC2 Dallas SourceLink Itasca, Ill Jung von Matt Hamburg NA Notes: Dollars in millions. Revenue supplied by companies via Ad Age questionnaire, obtained from public documents or estimated by Ad Age. An asterisk (*) indicates estimate. WPP, Publicis and Havas U.S. totals are actually for North America. The 2005 figures are based on data collected and/or adjusted in Foreign currency conversions for the above: euro at $ in 2006 vs. $ in 2005; British pound at $ vs. $1.8125; Japanese yen at $ vs. $ ; Australian dollar at $ vs. $ ; Canadian dollar at $ vs. $ See report methodology in DataCenter at adage.com, where a free Agency Profiles Yearbook (a PDF) also can be downloaded. The Yearbook provides profiles and data on the world s Top 50 marketing organizations and the world s 10 largest independent agency networks.