Advertising Agencies Industry Overview

Excerpt from Advertising Agencies Report

Companies in this industry create advertising material and place it across media such as television, newspapers, magazines, radio, and the Internet. Major US advertising agencies include units of Interpublic and Omnicom; leading companies based outside the US include Dentsu and Hakuhodo DY Holdings (Japan), Publicis (France), and WPP (Ireland).

Competitive Landscape

Demand for advertising is driven by companies that do business in sectors such as retail, automotive, and personal care products. The profitability of individual companies depends on the ability to attract and retain creative employees and establish and maintain successful relationships with clients. Big companies have advantages in providing integrated, large-scale advertising in multiple geographic markets. Small companies can compete effectively by specializing in niche markets or offering lower pricing. The US industry is fragmented: the top 50 companies account for about 40 percent of revenue.

Products, Operations & Technology

Spending on advertising goes mainly toward television (40 percent), newspapers (19 percent), the Internet (18 percent), magazines (9 percent), and radio (7 percent), according to ZenithOptimedia. Other outlets include outdoor advertising such as billboards, transit, and street furniture, and cinema advertising such as lobby signs and digital on-screen advertising.