First Research US Industry Profile

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Advertising Agencies
SIC Codes: 7311
NAICS Codes: 54181
Last Quarterly Update: 4/29/2019
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 $629 billion in 2018, according to eMarketer. Global ad spending will grow steadily at more than 5% per year through 2022, driven by digital ad spending. The top five advertising markets, ranked by 2018 spend, are the US, China, Japan, the UK, and Germany, according to Zenith.
The US advertising agencies industry includes about 13,500 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $46 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 accounted for more than a third of global ad spend in 2017. 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 services. Companies compete against large multinational advertising and marketing communications firms, as well as numerous independent and niche agencies to win new clients and maintain existing client relationships. Big agencies have advantages in providing integrated, large-scale advertising in multiple geographic markets. Small agencies can compete effectively by specializing in niche markets or offering lower pricing.
Products, Operations & Technology
Global spending on advertising goes mainly toward digital (including desktop and mobile internet display, online classifieds, and paid search, about 42%), ... plus:
Sales & Marketing
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Finance & Regulation
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Regional & International Issues
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Human Resources
Also includes the following chapters:
Quarterly Industry Update
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Industry Indicators
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Business Challenges
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Trends and Opportunities
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Call Preparation Questions
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Financial Information
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Industry Forecast
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Industry Websites
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Glossary of Acronyms

Historical Profiles (PDF format)

04/29/2019
01/28/2019
10/22/2018
07/23/2018
04/23/2018
01/22/2018
10/16/2017
07/17/2017
04/17/2017
01/16/2017
10/10/2016
07/18/2016
04/18/2016
01/18/2016
10/12/2015
07/13/2015
04/13/2015
01/19/2015
10/13/2014
07/21/2014
04/28/2014
02/03/2014
11/04/2013
08/12/2013
05/20/2013