Dive Brief:
- Two advertising agency executives have made Harvard Business Review's (HBR) "best performing" CEOs list this year, which are mostly based on shareholder metrics.
- WPP's Martin Sorrell came in at number 5, while Publicis CEO Maurice Lévy came in at 39. Meanwhile, in ad-related fields, Tencent's Huateng made number 45 and Salesforce.com's Marc Benioff came in at 46, down from number 15 last year.
- HBR changed up its rankings system this year. Some notable names were bumped off, including Omnicom's John Wren, who sat at number 50 last year.
Dive Insight:
For this year's "Best Performing" CEOs list, HBR shifted away from solely focusing on hard stats like financials, adding into "the mix a measurement of each company’s environmental, social, and governance (ESG) performance." HBR weighed financials at 80% and ESG metrics at 20%.
Another new aspect to this year's list is that CEOs who had led their companies before 1995 were previously been left off. This year, they have been taken into consideration, which helps explain why some CEOs didn't make the cut this time around, and why some moved up and down in the rankings.
"Our view is that, in an era of big data and greater transparency, consumers and investors increasingly want to understand a company’s culture and values. They want to analyze its social behavior, not just its share price. These new measurements will only get better over time," HBR wrote about the decision to shake metrics up.
The highest-ranked ad agency executive on the list was WPP's Sorrell. He recently made headlines after calling Facebook's video ad metrics "ludicrous" when speaking at the Dmexco conference in Germany in September. Though the agency has increased investments in digital efforts (digital represents 36% of WPP's business) in places such as BuzzFeed and Adobe, Sorrell singled out online media for its murky measurement tools and viewability issues.
In terms of future growth, however, Sorrell said he's looking at China and Iran as big opportunities. "If I compare WPP in 2000 to 2015, it's a very different company," the chief executive said. "Half of our revenue base has been initiated in the past 15 years."
Meanwhile, over the summer, Publicis, whose CEO took number 39 on HBR's list, was central in the ongoing and unprecedented "reviewageddon," defending $7.2 billion of its business, which represents 1.7% of its yearly revenue. About the media reviews, CEO Lévy pinned the billions of dollars up in question across the agency landscape on client's looking to cut costs.
In an earnings call in July he said about the ad reviews, "Obviously we may lose one or two. We may win on the other side. So we don’t believe that this will be the change that people are expecting to see with big shifts in total. I don’t believe that things will change quite dramatically in the scope and the range of the various companies."
