The Surge of Consultancies, and Nine Other Agency Facts You Need to Know

The Surge of Consultancies, and Nine Other Agency Facts You Need to Know By Bradley Johnson 1 U.S. agency revenue rose 4.4% to $48.3 billion in 2016, according to Ad Age Datacenter's bottoms-up analysis of more than 700 agencies, networks and companies for Agency Report 2017. Revenue broke a record, but growth was the slowest since 2013. U.S. agency revenue growth, 2001-2016 Revenue for agencies from all disciplines grew 4.4% in 2016, the second slowest growth rate since the ad market recovery began in 2010. Source: Ad Age Agency Reports. Agency Report online archive back to 1998 available to Ad Age Datacenter subscribers. 2 Digital reeled in 46.6% of U.S. agency revenue. But growth is moderating there, too. Agencies' digital revenue increased 8.0% in 2016, down from 13.5% in 2015. Digital media employment in 2016 rose 8.9%, the lowest growth since 2009. Going digital Digital's share of revenue for U.S. agencies from all disciplines reached 46.6% in 2016. Digital accounted for one-fourth of revenue in 2009. Source: Ad Age Agency Reports. Percentages as reported in historic Agency Reports. Increasing percentages partly reflect that Agency Report over time has expanded to include more digital-focused firms, such as major digital-centric consultancies. On a pro forma basis, 46.6% in 2016 was up from 45.0% in 2015. Agency Report 2017 AdAge.com/agencyreport2017 Available now to Ad Age Datacenter subscribers Datacenter subscribers get: Database of World's 25 Largest Agency Companies New: Expanded rankings of agencies by discipline, now downloadable in Excel Fast facts and figures on more than 700 agencies and networks Datacenter subscription info: AdAge.com/getdatacenter 877-320-1721 customerservice@adage.com 3 Adland's Big 5 made 121 mostly small deals in 2016. WPP (56) took control of its Australian/New Zealand affiliate; Dentsu (45) bought a majority stake in marketing agency Merkle. IPG did 10 deals, Omnicom five, Publicis five. 4 Four consultancies rank among the world's biggest agency companies: Accenture Interactive (No. 6), PwC Digital Services (7), IBM iX (8) and Deloitte Digital (9). Combined revenue: $13.2 billion. IBM was first of the four to make the list, in 2008—and the first to crack the top 10, in 2014. 5 Of the world's five largest digital agency networks, only one is owned by an old-guard company: No. 4 Publicis.Sapient (including SapientRazorfish and DigitasLBi). Accenture, IBM and Deloitte top the list. PwC is No. 5. 6 GroupM and Dentsu top Ad Age's first ranking of the world's five biggest media agency groups, followed by Omnicom Media Group, Publicis Media and IPG Mediabrands. Top five 2016 revenue: $16.7 billion, up 8.6%. Related Stories Agency Revenue Up But Growth Rates Are Slowing Creeping on Agencies' Turf, Consultancies Are Shaking Up the Marketing Industry 7 U.S. ad agency employment in December reached its highest level (202,700) since the dot-com bubble in 2001. Ad agency staffing last year grew 2.7%, tracking with ad agency revenue growth of 2.8%. U.S. ad agency jobs Ad agency employment in December 2016 reached its highest level since the dot-com bubble in 2001. Employees February 2017 201,100 Now vs. year ago + 1,200 Now vs. downturn nadir (2010) + 40,500 Now vs. start of recession (December 2007) + 13,300 Source: Bureau of Labor Statistics. More info: bls.gov. See current jobs data: AdAge.com/adjobs. Now means February 2017. Now vs. downturn nadir means jobs added since sector's staffing hit recession/post-recession bottom in early 2010. Now vs. start of recession means difference in staffing, now vs. December 2007 (beginning of 2007-2009 recession). Media agency jobs graph includes media buying agencies and independent media rep firms. 8 All major agency disciplines grew last year, led by healthcare, up 7.6%. Promotion gained 5.4%, boosted by experiential marketing. The data-centric field of CRM/direct marketing rose 4.5%. PR increased 3.2%. Growth by agency discipline 2016 estimated U.S. revenue growth by discipline, and digital revenue growth from all disciplines, for the nearly 700 agencies in Agency Report. Healthcare was the fastest-growing discipline. Discipline % change, 2016 vs. 2015 Revenue Agencies from all disciplines 1 + 4.4% $48.3 billion Digital (including media agencies) 2,3 + 8.0% $22.5 billion Healthcare 3 + 7.6% $5.4 billion Promotion 3,4 + 5.4% $4.6 billion CRM/direct marketing 3 + 4.5% $8.8 billion Public relations 3 + 3.2% $4.5 billion Ad agencies 3 + 2.8% $11.9 billion Media agencies (excluding digital work) 3,5 - 0.4% $3.1 billion Source: Ad Age's Agency Report 2017. See expanded rankings by discipline. Revenue and percent change based on data collected and/or adjusted in 2017. 1. All agencies in Agency Report. 2. Digital work for all networks and agencies in report, including ad, customer relationship management/direct marketing, digital, experiential/event marketing, healthcare, media, multicultural, promotion and public relations agencies. 3. Disciplines may overlap. For example, a healthcare agency may generate a portion of its revenue from CRM/direct marketing, or a PR agency may generate a portion or all of its revenue from healthcare marketing. 4. Including experiential/event marketing. 5. Non-digital work at media agencies. 9 Agency firms are streamlining and pruning. Publicis merged some brands as part of its sweeping reorganization into four hubs; Omnicom sold Novus Media, a local-media agency; and IPG sold Los Angeles agency Dailey. 10 Agency stocks have fared well. IPG in April hit its highest price since 2002; WPP in March scored a new high; and Omnicom in December reached its highest-ever adjusted close. Web production by Chen Wu.

The Surge of Consultancies, and Nine Other Agency Facts You Need to Know

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