U.S. agency revenue rose a tepid 1.7 percent in 2018, the weakest growth since the ad market emerged from recession.
But there are positive indicators. Omnicom Group’s stock this month scored a multiyear high, a bet by investors that the big agency company will keep growing.
Digital revenue for U.S. agencies increased a healthy 7.2 percent in 2018. U.S. ad agency employment last summer broke through its year 2000 peak to reach a new all-time high, though agencies have trimmed staff since then.
Agencies can only hope the U.S. economy keeps rolling. The economic expansion, assuming it holds, will pass the 10-year mark in July, making this the longest U.S. expansion on record and putting the 2007-2009 recession (the longest downturn since the Great Depression) in the rearview mirror.
A brief (sort of) history of agencies
Big deals, big ideas and an 'odious little shit'
Check out Ad Age’s agency timeline. This is our 75th annual Agency Report, so we dug through the archives to see just how the agency business has (and has not) changed.AdAge.com/agencyreport75th
Five takeaways from Ad Age Agency Report 2019:
1. Digital crossroads
Number of times WPP mentioned “digital” in then-CEO Martin Sorrell’s 130-slide earnings presentation in March 2018: 63.
Number of times WPP mentioned “digital” in new CEO Mark Read’s 60-slide earnings presentation in March 2019: zero.
Read, formerly CEO of the company’s WPP Digital unit, isn’t taking WPP off the grid. Rather, he’s running a company for which digital is so omnipresent that there’s less reason to call out the obvious.
Among the world’s five biggest agency companies, only one—Dentsu Inc.—now discloses in its earnings presentations how much of its business comes from digital services.
Dentsu says digital accounted for 46.1 percent of worldwide revenue less cost of sales in 2018. It also says digital accounted for 60.6 percent of business in 2018 for Dentsu Aegis Network, which manages operations outside Japan.
Ad Age Datacenter estimates that digital work captured 53.6 percent of 2018 U.S. revenue for agencies from all disciplines in this Agency Report. That’s double the percentage from 2009.