1. Digital-specialty agencies.
2. CRM/direct agencies had $4.75 billion in revenue including
$2.00 billion from digital services.
Numbers rounded. Source: Ad Age Agency Report 2011.
Remember how bad things were: U.S. ad spending as a percent of
gross domestic product in 2009 slumped to its lowest level in
decades, and U.S. agencies in 2009 saw the sharpest revenue drop
(7.5%) since Ad Age began the Agency Report in 1945.
Ad spending and employment remain well off their peak. Publicis'
ZenithOptimedia says U.S. ad/marketing-services spending won't
break its 2007 record until 2013. U.S. ad and marketing-services
firms employ 76,500 fewer people today than at the industry's
pre-recession, late-2007 peak. (See AdAge.com/adjobs.)
But there is no denying the turnabout in ad spending last year
as key advertising sectors including automotive rebounded from
their Great Recession lows.
Omnicom in 2010 reported 8.7% U.S. organic growth (revenue
growth after factoring out acquisitions/divestitures and the impact
of foreign exchange), beating its 6.4% worldwide organic
In 2010, Interpublic reported robust 10.1% organic revenue
growth in the U.S., and Publicis posted 9.9% organic growth in
North America, better in both cases than any other single region
except Latin America.
Revenue for the world's 50 largest agency companies totaled
$62.2 billion in 2010, up 9.4%. U.S. revenue for those firms jumped
11.4%. (Ad Age DataCenter did not adjust agency company
total-revenue figures, so the high growth rates last year in part
The U.S. accounted for 42% of the top 50 agency firms' worldwide
With the economy and financial markets back on track,
marketing-communications companies have returned to
merger-and-acquisition mode, doing a lot of buying -- and some
Omnicom is undertaking a global review of operations with the
aim to reorganize or dispose of what President-CEO John Wren has
termed "non-core, low-growth, low-margin businesses ... generally
in smaller markets." As of April 2011, Omnicom had disposed of
units with combined annual revenue of about $120 million.
OUT WITH THE OLD, IN
WITH THE NEW
Agency firms over the past year announced numerous fill-in
acquisitions but no blockbusters. Among the deals and agency
WPP (No. 1) in April 2011 agreed to buy
Commarco Holding (No. 37), a German agency group
controlled since 2003 by a private-equity firm. WPP completed 25
small and midsize acquisitions in 2010, including Canadian agency
Taxi; I-Behavior, a U.S. database marketing firm; Marketing Direct
Inc., a U.S. marketing-services company; and U.S. digital agencies
Blue State Digital and Digitaria. WPP also rolled up four WPP
shops into Possible Worldwide, a global digital agency.
Omnicom (No. 2) took majority ownership of
Clemenger Group, an Australian agency company in which Omnicom's
BBDO Worldwide had been a minority
investor since 1972. Omnicom also purchased Communispace, a digital
market-research-services firm; bought The Modellers, a
market-research company; acquired The Core, a U.K. design and
branding agency; bought Sales Power, an in-store promotion company
in China; and purchased a majority stake in Maslov PR, a PR agency
in Russia. Omnicom disbanded pioneering digital agency Agency.com,
splitting its offices among TBWA Worldwide network agencies. Omnicom sold
a majority stake in U.S. PR firm Brodeur Partners.
Publicis (No. 3) made two deals in Brazil,
buying digital shop AG2 and a 60% stake in agency firm Talent
Group. Publicis also acquired PR firms Eastwei Relations (now
Eastwei MSL) in China and Interactive Communications Ltd. (now ICL
MSL) in Taiwan. Publicis bought U.K. integrated/digital-marketing
firms Airlock, Chemistry Communications Group, Holler and Kitcatt
Nohr. Publicis this month agreed to sell its 56% stake in U.K. PR
firm Freud Communications back to Chairman Matthew Freud.
Interpublic (No. 4) bought U.K. shop Delaney
Lund Knox Warren from agency firm Creston, making the renamed DLKW
Lowe the U.K. hub of
Lowe Worldwide.Interpublic increased its stake in Brooklyn-based
digital agency Huge to 75% from 51%. The company did two deals in
Brazil, acquiring digital shop Cubocc and merging McCann Erickson's
Brazil operation with local agency W/Brasil. Interpublic sold U.S.
PR agency MWW Group.
Dentsu Inc. (No. 5) bought U.S. digital
ventures Innovation Interactive ( 360i) and Firstborn. The Japanese
company set up Dentsu Network West as a New York-based network for
its agencies in the Americas and Europe.
Aegis Group (No. 6) bought Mitchell
Communication Group, an Australian agency firm.
InVentiv Health (No. 21) was bought by a
private-equity group that is expanding the venture through
LBi International (No. 27) merged with a
private-equity-backed European search-engine firm, making
Amsterdam-based LBi a bigger force in digital.
George P. Johnson, the nation's biggest event-marketing firm,
reorganized under a new agency holding company, Project
WorldWide (No. 29). Project is on the hunt for deals.
Rosetta (No. 30) bought Level Studios, the
fast-growing digital agency's latest acquisition.
Cossette, a Canadian agency company that went private in 2009,
took the new name Vision7 International (No. 35)
as it looks for more global growth.
GSI Commerce (No.
36), an e-commerce and interactive marketing-services
firm, agreed to be acquired by eBay.
ICrossing (No. 44) was acquired by Hearst
Corp., which followed Meredith Corp. (No. 39) as a
media company making a play in the agency business.
See more ad industry jobs data: AdAge.com/adjobs
Source: Bureau of Labor Statistics data.