• Bnet, Wednesday, December 10, 2008 9:15 AM

Flying in the face of conventional wisdom, Alloy Marketing & Media generates more revenue from the cash it spends on salaries and general expenses than the large agency holding companies, according to a Q3 earnings comparison. For years, agency chiefs have pursued greater efficiencies through consolidation and the creation of ever-larger agency networks. But Alloy is a small ad agency network with only $54 million in quarterly revenue. Alloy is also a media provider, operating Channel One and various websites.

The admittedly non-scientific agency comparison was made by taking the revenues generated by each network and dividing them by the total operating expenses. That gives a revenue yield per dollar spent. Of the big networks, Publicis ranks as the most efficient; IPG is the least.

Another surprise: There is no correlation between specialization and being more efficient. For years, agency networks have acquired specialized, below-the-line businesses because they are believed to be more profitable than general, above-the line ad agencies.

Read the whole story at Bnet »