Advertising Agencies Industry Profile

Report Page Length: 10-12
Last Quarterly Update: 4/23/2018
SIC Codes: 7311
NAICS Codes: 54181
Chapters Include:
Industry Overview Trends & Challenges Industry Forecast
Quarterly Industry Update Call Prep Questions Website & Media Links
Business Challenges Financial Information Glossary & Acronyms
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Excerpt from Advertising Agencies Industry Profile

Companies in this industry create advertising material and place it across media such as television, the internet (mobile and desktop), newspapers, magazines, radio, and outdoor displays. Major US advertising agencies include units of Interpublic and Omnicom; leading companies based outside the US include Dentsu and Hakuhodo DY Holdings (both based in Japan), and WPP (UK).

Worldwide spending on advertising -- including purchase of media time and space as well as ad agencies' services -- was estimated to be about $584 billion in 2017, according to eMarketer. Growth of between about 5% and 8% per year is forecast through 2021, driven by mobile ad spending. The top five advertising markets, ranked by 2016 spend, are the US, China, Japan, the UK, and Germany, according to Zenith.

The US advertising agencies industry includes about 13,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $43 billion.

COMPETITIVE LANDSCAPE

Demand for advertising is driven by companies that do business in sectors such as automotive, retail, entertainment and media, food and beverages, and technology. The profitability of individual agencies depends on the ability to attract and retain creative employees and establish and maintain successful relationships with clients. The US industry is fragmented: the top 50 advertising agencies account for less than 50% of revenue.

Competition can come from marketing and public relations firms, direct mail advertising, and online social networking ...

 
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