Advertising Agencies

Advertising Agencies

Brief Excerpt from Industry Overview Chapter:

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).

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.

PRODUCTS, OPERATIONS & TECHNOLOGY

Advertising agency firms get their revenues from multiple advertising services which account for about 60% of the industry's revenue. This is followed by advertising creative services (about 25%), media planning and buying services account for about 10%. Other services including direct marketing services and sales agent services for advertising.