Advertising Agencies in the US - Market Research Report (2014-2029)
New York, United States
Last Updated: July 2024
NAICS 54181Revenue
$70.1bn
Past 5-Year Growth
Profit
$X.Xbn
Employees
190k
Businesses
14,273
Wages
$XX.Xbn
Advertising Agencies in the US industry analysis
Advertising agencies have benefitted from rising consumer spending, corporate profit and per capita disposable income in recent years. Despite the outbreak of COVID-19 and falling advertising expenditure during the pandemic, revenue grew in 2020 as companies demanded creative services for COVID-19-focused marketing campaigns. As corporate profit returned following 2020, agencies were able to capitalize on an explosion of pent-up demand as businesses looked to target a consumer base with growing levels of disposable income. Industry-wide revenue has been growing at a CAGR of 2.7% over the past five years and is expected to total $70.1 billion in 2024, when revenue will jump by an estimated 1.9% and profit will inch toward 6.6%.<em> </em>
Trends and Insights
- A shift to digital advertising promoted growth for advertising agencies. As traditional media ad spending nosedived, digital advertising skyrocketed during the pandemic. Brands leaned into e-commerce and social media, tapping into the surge in online activity and streaming consumption.
- Bundled creative and placement services are a hit with advertisers. These all-in-one solutions make it simpler for companies to launch campaigns, driving high demand for agencies offering creative and media-buying services.
- Advertising agencies are located close to key markets. Proximity to highly populated areas allows small agencies to provide services to various local businesses, contributing to the concentration of advertising agencies in the metropolitan markets.
- Specialized niche agencies keep the market competitive. No single agency can dominate because businesses need tailored advertising solutions. Small agencies thrive by focusing on specific sectors, offering unique creativity and low-cost services.
Industry Overview
Market size and recent performance (2014-2029)
Industry revenue has grown at a CAGR of 2.7 % over the past five years, to reach an estimated $70.1bn in 2024.
Trends and Insights
Advertising agencies enjoyed heightened demand following the outbreak of COVID-19
- While economic uncertainty and lower corporate profit amid the outbreak of COVID-19 reduced total advertising expenditure in 2020 as smaller businesses looked to cut additional costs, advertising agencies enjoyed growth.
- Additional trends and insights available with purchase
Industry outlook (2024-2029)
Market size is projected to grow over the next five years.
Trends and Insights
Programmatic ad buying to enable larger companies to expand their market share
- Programmatic ad buying is the use of automated technology for media buying. This technology gives advertisers access to a wide range of ad space inventory while providing a significant cost benefit compared to traditional ad-buying. Advertising agencies with the capital and willingness to incorporate such technology into their company will reap the benefits of this change.
Biggest companies in the Advertising Agencies in the US
| Company | Market Share (%)
2024 | Revenue ($m)
2024 | Profit ($m)
2024 | Profit Margin (%)
2024 |
|---|---|---|---|---|
Omnicom Group Inc. | 4,286.0 | 641.8 | 15.0 | |
Wpp Plc | 3,355.0 | 246.3 | 7.3 | |
Alliance Data Systems Corp | 1,255.5 | 62.8 | 5.0 |
To view the market share and analysis for all 15 top companies in this industry, view purchase options.
Products & Services Segmentation
Advertising Agencies in the US
Products & Services
Industry revenue is measured across several distinct product and services lines, including Bundled creative and placement services, Creative services and Media buying and planning services. Bundled creative and placement services is the largest segment of the Advertising Agencies in the US.
Trends and Insights
The convenience of bundled creative and placement services has spurred growth
- Advertising agencies collaborate with clients to understand their vision, create a campaign strategy and concept and then create a finished product that conveys this message to the intended audience. Once the campaign is complete, advertising agencies provide media planning, buying and placement services, which involve negotiating, strategizing and purchasing ad placements.
- More insights available in the full report
Widen you competitive advantage with related industries
Competitors
- Direct Mail Advertising in the US
- Promotional Products in the US
Complementors
- Graphic Designers in the US
- Management Consulting in the US
- Media Buying Agencies in the US
- Media Representative Firms in the US
International industries
- Global Advertising Agencies
- Advertising Agencies in Canada
- Advertising Agencies in Australia
- Advertising and Market Research Services in New Zealand
- Advertising Agencies in the UK
Table of Contents
About this industry
Industry definition
Advertising agencies create advertising campaigns for periodicals, newspapers, radio, TV and other media. Through in-house capabilities or subcontracting, ad agencies provide advice, creative services, account management, production of advertising material and media planning and buying (e.g. ad placement).
What's included in this industry?
Advertising campaigns through available mediums, such as TV, periodicals and digitalCompanies
Omnicom Group Inc.Wpp PlcAlliance Data Systems CorpPurchase this report to view all 15 major companies in this industry.
Related Terms
BELOW-THE-LINETRADITIONAL MEDIANEW MEDIAVIRAL MARKETINGIndustry Code
NAICS 54181 - Advertising Agencies in the US
Performance
Get an indication of the industry's health through historical, current and forward-looking trends in the performance indicators that make or break businesses.
Analyst insights
A shift to digital advertising promoted growth for advertising agencies. As traditional media ad spending nosedived, digital advertising skyrocketed during the pandemic. Bran...
In this chapter (4)
- Current Performance
- Outlook
- Volatility
- Life Cycle
Key metrics
- Annual Revenue, Recent Growth, Forecast, Revenue Volatility
- Number of Employees, Recent Growth, Forecast, Employees per Business, Revenue per Employee
- Number of Businesses, Recent Growth, Forecast, Employees per Business, Revenue per Business
- Total Profit, Profit Margin, Profit per Business
Charts
- Revenue, including historical (2014-2023) and forecast (2024-2029)
- Employees, including historical (2014-2023) and forecast (2024-2029)
- Businesses, including historical (2014-2023) and forecast (2024-2029)
- Profit, including historical (2014-2024)
- Industry Volatility vs. Revenue Growth
- Industry Life Cycle
Detailed analysis
- Trends in supply, demand and current events that are driving current industry performance
- Expected trends, economic factors and ongoing events that drive the industry's outlook
- Key success factors for businesses to overcome volatility
- How contribution to GDP, industry saturation, innovation, consolidation, and technology and systems influence the industry's life cycle phase.
Products and Markets
Learn about an industry's products and services, markets and trends in international trade.
Analyst insight
Bundled creative and placement services are a hit with advertisers. These all-in-one solutions make it simpler for companies to launch campaigns, driving high demand for agen...
In this chapter
- Products & Services
- Major Markets
Key metrics
- Largest market segment and value in 2024
- Product innovation level
Charts
- Products & services segmentation in 2024
- Major market segmentation in 2024
Detailed analysis
- Trends impacting the recent performance of the industry's various segments
- Innovations in the industry's product or service offering, specialization or delivery method
- Key factors that successful businesses consider in their offerings
- Buying segments and key trends influencing demand for industry products and services
Geographic Breakdown
Discover where business activity is most concentrated in an industry and the factors driving these trends to find opportunities and conduct regional benchmarking.
Analyst insights
Advertising agencies are located close to key markets. Proximity to highly populated areas allows small agencies to provide services to various local businesses, contributing...
In this chapter (1)
- Business Locations
Charts
- Share of revenue, establishment, wages and employment in each state
- Share of population compared to establishments in each region in 2024
Tables
- Number and share of establishments in each state in 2024
- Number and share of revenue each state accounts for in 2024
- Number and share of wages each state accounts for in 2024
- Number and share of employees in each state in 2024
Detailed analysis
- Geographic spread of the industry across North America, and trends associated with changes in the business landscape
- Key success factors for businesses to use location to their advantage
Competitive Forces
Get data and insights on what's driving competition in an industry and the challenges industry operators and new entrants may face, with analysis built around Porter's Five Forces framework.
Analyst insights
Specialized niche agencies keep the market competitive. No single agency can dominate because businesses need tailored advertising solutions. Small agencies thrive by focusin...
In this chapter (4)
- Concentration
- Barriers to Entry
- Substitutes
- Buyer & Supplier Analysis
Key metrics
- Industry concentration level
- Industry competition level and trend
- Barriers to entry level and trend
- Substitutes level and trend
- Buyer power level and trend
- Supplier power level and trend
Charts
- Market share concentration among the top 4 suppliers from 2019-2024
- Supply chain including upstream supplying industries and downstream buying industries, flow chart
Detailed analysis
- Factors impacting the industry’s level of concentration, such as business distribution, new entrants, or merger and acquisition activity.
- Key success factors for businesses to manage the competitive environment of the industry.
- Challenges that potential industry entrants face such as legal, start-up costs, differentiation, labor/capital intensity and capital expenses.
- Key success factors for potential entrants to overcome barriers to entry.
- Competitive threats from potential substitutes for the industry’s own products and services.
- Key success factors for how successful businesses can compete with substitutes.
- Advantages that buyers have to keep favorable purchasing conditions.
- Advantages that suppliers have to maintain favorable selling conditions.
- Key success factors for how businesses can navigate buyer and supplier power.
Companies
Learn about the performance of the top companies in the industry.
Analyst insights
Only one company has amassed more than 5.0% of the market. Omnicron Group and Interpublic Group are gaining market share through their acquisition activity.
In this chapter
- Market Share Concentration
- Companies
- Company Spotlights
Charts
- Industry market share by company in 2020 through 2024
- Major companies in the industry, including market share, revenue, profit and profit margin in 2024
- Overview of Omnicom Group Inc.'s performance by revenue, market share and profit margin from 2018 through 2024
- Overview of Wpp Plc's performance by revenue, market share and profit margin from 2018 through 2024
- Overview of Alliance Data Systems Corp's performance by revenue, market share and profit margin from 2018 through 2024
- Overview of revenue, market share and profit margin trend for 12 additional companies
Detailed analysis
- Description and key data for Omnicom Group Inc., and factors influencing its performance in the industry
- Description and key data for Wpp Plc, and factors influencing its performance in the industry
- Description and key data for Alliance Data Systems Corp, and factors influencing its performance in the industry
- Description, key data and performance trends for 12 additional companies
External Environment
Understand the demographic, economic and regulatory factors that shape how businesses in an industry perform.
Analyst insights
While advertising agencies are largely self-regulatory, the Federal Trade Commission Act requires advertising to be truthful and nondeceptive. Misleading claims can lead to h...
In this chapter
- External Drivers
- Regulation & Policy
- Assistance
Key metrics
- Regulation & policy level and trend
- Assistance level and trend
Charts
- Regulation & Policy historical data and forecast (2014-2029)
- Assistance historical data and forecast (2014-2029)
Detailed analysis
- Demographic and macroeconomic factors influencing the industry, including Regulation & Policy and Assistance
- Major types of regulations, regulatory bodies, industry standards or specific regulations impacting requirements for industry operators
- Key governmental and non-governmental groups or policies that may provide some relief for industry operators.
Financial Benchmarks
View average costs for industry operators and compare financial data against an industry's financial benchmarks over time.
Analyst insights
Smaller advertising agencies struggle with profitability. They're locked in fierce price-based competition and don't have the expansive service offerings that boost profits f...
In this chapter
- Cost Structure
- Financial Ratios
- Key Ratios
Key metrics
- Profit margin, and how it compares to the sector-wide margin
- Average wages, and how it compares to the sector-wide average wage
- Largest cost component as a percentage of revenue
- Industry average ratios for days' receivables, industry coverage and debt-to-net-worth ratio
Charts
- Average industry operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2024
- Average sector operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2024
- Investment vs. share of economy
Data tables
- Industry Multiples (2017-2022)
- Industry Tax Structure (2017-2022)
- Income Statement (2017-2022)
- Balance Sheet (2017-2022)
- Liquidity Ratios (2017-2022)
- Coverage Ratios (2017-2022)
- Leverage Ratios (2017-2022)
- Operating Ratios (2017-2022)
- Cash Flow & Debt Service Ratios (2014-2029)
- Revenue per Employee (2014-2029)
- Revenue per Enterprise (2014-2029)
- Employees per Establishment (2014-2029)
- Employees per Enterprise (2014-2029)
- Average Wage (2014-2029)
- Wages/Revenue (2014-2029)
- Establishments per Enterprise (2014-2029)
- IVA/Revenue (2014-2029)
- Imports/Demand (2014-2029)
- Exports/Revenue (2014-2029)
Detailed analysis
- Trends in the cost component for industry operators and their impact on industry costs and profitability
Key Statistics
Industry Data
Data Tables
Including values and annual change:
- Revenue (2014-2029)
- IVA (2014-2029)
- Establishments (2014-2029)
- Enterprises (2014-2029)
- Employment (2014-2029)
- Exports (2014-2029)
- Imports (2014-2029)
- Wages (2014-2029)
Methodology
How are IBISWorld reports created?
IBISWorld has been a leading provider of trusted industry research for over 50 years to the most successful companies worldwide. With offices in Australia, the United States, the United Kingdom, Germany and China, we are proud to have local teams of analysts that conduct research, data analysis and forecasting to produce data-driven industry reports.
Our analysts start with official, verified and publicly available sources of data to build the most accurate picture of each industry. Analysts then leverage their expertise and knowledge of the local markets to synthesize trends into digestible content for IBISWorld readers. Finally, each report is reviewed by one of IBISWorld’s editors, who provide quality assurance to ensure accuracy and readability.
IBISWorld relies on human-verified data and human-written analysis to compile each standard industry report. We do not use generative AI tools to write insights, although members can choose to leverage AI-based tools within the platform to generate additional analysis formats.
What data sources do IBISWorld analysts use?
Each industry report incorporates data and research from government databases, industry-specific sources, industry contacts, and our own proprietary database of statistics and analysis to provide balanced, independent and accurate insights.
Key data sources in the US include:
- US Census Bureau
- US Bureau of Labor Statistics
- US International Trade Commission
Analysts also use industry specific sources to complement catch-all sources, although their perspective may focus on a particular organization or representative body, rather than a clear overview of all industry operations. However, when balanced against other perspectives, industry-specific sources provide insights into industry trends.
These sources include:
- Industry and trade associations
- Industry federations or regulators
- Major industry players annual or quarterly filings
Finally, IBISWorld’s global data scientists maintain a proprietary database of macroeconomic and demand drivers, which our analysts use to help inform industry data and trends. They also maintain a database of statistics and analysis on thousands of industries, which has been built over our more than 50-year history and offers comprehensive insights into long-term trends.
How does IBISWorld forecast its data?
IBISWorld’s analysts and data scientists use the sources above to create forecasts for our proprietary datasets and industry statistics. Depending on the dataset, they may use regression analysis, multivariate analysis, time-series analysis or exponential smoothing techniques to project future data for the industry or driver. Additionally, analysts will leverage their local knowledge of industry operating and regulatory conditions to impart their best judgment on the forecast model.
IBISWorld prides itself on being a trusted, independent source of data, with over 50 years of experience building and maintaining rich datasets and forecasting tools. We are proud to be the keystone source of industry information for thousands of companies across the world.
Learn more about our methodology and data sourcing on the Help Center.
Frequently Asked Questions
Unlock comprehensive answers and precise data upon purchase. View purchase options.
What is the market size of the Advertising Agencies in the US industry in United States in 2024?
The market size of the Advertising Agencies in the US industry in United States is $70.1bn in 2024.
How many businesses are there in the Advertising Agencies in the US industry in 2024?
There are 14,273 businesses in the Advertising Agencies in the US industry in United States, which has grown at a CAGR of 2.6 % between 2019 and 2024.
Has the Advertising Agencies in the US industry in United States grown or declined over the past 5 years?
The market size of the Advertising Agencies in the US industry in United States has been growing at a CAGR of 2.7 % between 2019 and 2024.
What is the forecast growth of the Advertising Agencies in the US industry in United States over the next 5 years?
Over the next five years, the Advertising Agencies in the US industry in United States is expected to grow.
What are the biggest companies in the Advertising Agencies in the US market in United States?
The biggest companies operating in the Advertising Agencies market in United States are Omnicom Group Inc., Wpp Plc and Alliance Data Systems Corp
What does the Advertising Agencies in the US in United States include?
Advertising campaigns through available mediums, such as TV, periodicals and digital and are part of the Advertising Agencies in the US industry.
Which companies have the highest market share in the Advertising Agencies in the US in United States?
The company holding the most market share in United States is Omnicom Group Inc..
How competitive is the Advertising Agencies in the US industry in United States?
The level of competition is moderate and increasing in the Advertising Agencies in the US industry in United States.
