US agencies expand

01 May 2012

NEW YORK: Agency revenues in the US increased by +7.9% last year, with client demand for digital communications a major factor in this growth.

According to new figures from news source Ad Age's Agency Report 2012, earnings at media agencies outpaced the industry average, up +11.4%, compared to ad agencies' annual rise of 4.7%. But digital agencies secured the fastest growth of all, rising +17.1%.

The latest result also represented a quickening in revenue growth from 2010, when the agencies' collective annual expansion stood at +7.7%.

"The agency business, in short, is humming along even as the economy struggles through low-grade growth," Ad Age commented. "But performance varied sharply by sector and, naturally, the star performer was digital."

Ad Age indicated that clients are increasingly demanding digital services, including media planning and analytics. By contrast, core media spend, while also marking an annual increase, experienced relatively "meager" growth, the report added.

This analysis chimes with Warc's latest International Ad Forecast, which pegged all-media growth for the US at +2.7% in 2011.

For its part, Ad Age cited still more conservative data from ZenithOptimedia which suggested that adspend was up just +1.6% last year.

The latest Ad Age report suggests that US agencies have added just under 50,000 jobs since the recovery from the 2008–09 economic downturn began. But overall headcount had not returned to the pre-recession high by the end of last year.

Digital's increasingly prominent role in the agency revenue mix was also highlighted by the report's finding that the firms generated $10.1bn of revenue (around 30% of the total) from online services and activities. In 2010, this proportion stood at just 28%.

Data sourced from Ad Age; additional content by Warc staff