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 advertisement - including the purchase of media time and space as well as ad agencies' services - is expected to reach about $900 billion in 2024, according to Statista.

The US advertising agencies industry includes about 14,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $50 billion.

COMPETITIVE LANDSCAPE

Demand for advertising is driven by companies that do business in sectors such as personal care and household products, automotive, entertainment and media, retail, food and beverages, and technology; together, these categories usually account for more than a third of global ad spend. The profitability of individual agencies depends on attracting and retaining creative employees and establishing and maintaining 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 services. Companies compete against large multinational advertising and marketing communications firms, as well as numerous independent and niche agencies to win new clients ...