First Research US Industry Profile

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Advertising & Marketing Services
SIC Codes: 7311, 7312, 7313, 7319, 7331, 8743
NAICS Codes: 5418
Last Quarterly Update: 11/18/2019
Companies in this industry create advertising campaigns, implement public relations campaigns, and engage in media buying, among other advertising services. The world's major advertising companies include Dentsu (based in Japan), Interpublic (the US), Omnicom (the US), Publicis (France), and WPP (Ireland). The digital marketing arms of global consulting firms Accenture, IBM, and PwC also rank among the top agencies by revenue, according to Agency Spotter.
Global ad spending is about $620 billion per year, according to a forecast from the World Advertising and Research Center. The top markets by ad spend include the US, China, Japan, the UK, and Germany, according to Zenith. Outside of the US, major contributors to ad spend growth through 2021 include China, India, Japan, and the UK.
The US advertising and marketing services industry includes about 38,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $105 billion.
Competitive Landscape
Migration of ad spending to digital media continues to drive change in the industry. Global media owner revenue from digital ads, including search, social, and mobile, has surpassed TV ad revenue, according to Zenith. Within the industry, competition is high between firms that provide traditional TV or print advertising and those that provide more modern digital and mobile/social focused services. This leads many larger firms to create or acquire brands that offer a wider array of services.
At the same time, some of the world's largest consultancies have entered the advertising industry, including Accenture Interactive, PwC, IBM's iX, and Deloitte. These companies have the advantage of already doing business with some of the largest firms in the world and having strong reputations for helping customers solve problems. The industry in the US is fragmented: the top 50 companies account for about 40% of revenue.
Competitive advantages include a company's digital capabilities and its success in streamlining and reducing complexity in marketing programs for clients. Agencies that have a mastery of traditional print and TV advertising that can also help customers navigate newer digital platforms will attract more customers. Agencies that can bring together multiple offerings in a simplified approach stand to benefit as well.
Products, Operations & Technology
Major sources of revenue for the industry in the US are advertising for print, broadcast, and online media (about 25% of industry sales), public relations ... 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

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