US advertising is so often conflated with a certain Manhattan avenue that its diversity is sometimes ignored. WARC’s US editor Geoffrey Precourt introduces research by The 4A’s Marsha Appel that explores the breadth of America’s agency landscape.

The unkindest cut for outstanding advertising agencies all over America was the popularization of the term “Madison Avenue” and, with it, the notion that the industry is entirely focused on Manhattan.

I started paying serious attention to advertising as a reporter in 1970s Boston. The marketing community in New England was then (and remains) as creative and as effective as any place in the Americas. And Boston agencies resented their second-city status to New York (no one, I suppose, even considered Chicago). They were proud not just of their work but the results they produced.

Decades later, Marsha Appel, the 4A’s (American Association of Advertising Agencies) svp/research has applied her powerful expertise in government data to prove what Boston knew back then: sure, there’s some powerful marketing that happens in New York. But Los Angeles, Chicago, San Francisco, Dallas, and, yes, Boston all are important advertising centers. And Austin, Orlando, Las Vegas, and Detroit impressively are all risers in the advertising/marketing ecosystem. Madison Avenue, Appel’s research shows, stretches coast to coast as well as from Northern States to the tip of Florida and the heart of Texas.

—Geoffrey Precourt, US Editor/Reports & News

The New York, Los Angeles, and Chicago metropolitan areas (in that order) have retained a vice-like grip on the top three slots for U.S. advertising agency employment for the past three decades. While they are the undisputed leaders with no end in sight, there has been quite a bit of jostling for position for the other seven spots in the top ten MSAs (metropolitan statistical areas, the government equivalent of DMAs).

We’ve conducted an analysis of US Government data and compared the top 50 MSAs by agency employment from 2006 to 2016 (Note: The most recent government data enabling comparisons of MSAs comes from 2016 County Business Patterns. While the Bureau of Labor Statistics has more recent employment data, it does not provide updated info for all metro areas.)

There are some significant shifts and some surprises in the rankings for the ten-year period from 2006 to 2016. First, the top 10 MSAs in agency employees in 2016 are:

  1. New York
  2. Los Angeles
  3. Chicago
  4. San Francisco
  5. Dallas
  6. Boston
  7. Detroit
  8. Miami
  9. Minneapolis
  10. Orlando
Two of these, Detroit and Orlando, were not in the top 10 in 2006. As a matter of fact, ten years earlier they were ranked 15 and 23, respectively. They displaced two metros that had been in the top 10 in 2006: Philadelphia (dropping from seven to 11) and Atlanta (five to 12).

Within the top 20 MSAs of 2016, we’ve defined the fastest growing metros during the decade as those that improved more than four positions in the ranking. They are:

  • Austin (+15)
  • Orlando (+13)
  • Las Vegas (+9)
  • Detroit (+8)
Broadening to the top 50 metros in 2016, these MSAs experienced the most dramatic jumps since 2006:
  • Boulder (jumped 57 slots, from 97 to 40)
  • Ogden-Clearfield, UT (+51, from 90 to 39)
  • Fayetteville-Springdale-Rogers, AR-MO (+50, from 93 to 43)
  • Albany, NY (+40, from 84 to 44)
  • Grand Rapids (+35, from 76 to 41)
  • Des Moines (+28, from 73 to 45)
  • Trenton (+28, from 74 to 46)
  • Omaha (+17, from 49 to 32)
Among the top 50 in 2016, the metros dropping 10 spots or more in advertising employment since 2006 were:
  • Tampa (down 15, from 14 to 29)
  • Indianapolis (-14, from 33 to 47)
  • Cleveland (-12, from 21 to 33)
  • Baltimore (-11, from 25 to 36)
  • Phoenix (-10, from 16 to 26)
  • Houston (-10, from 17 to 27)

Impact of a Single Advertiser

One of the most stunning shifts was by Fayetteville-Springdale-Rogers, AR-MO, which jumped in rank from #93 to #43 in agency employment over the decade. I can think of only one possible reason for that: Walmart, which precipitated the launch of new agencies, and drew agencies from elsewhere in the country like a magnet to set up satellites nearby in the service of Walmart’s extensive vendor network.

Other big gainers owe their growth to a specific industry, like the tech hub that mushroomed in Austin. There may not be a single catalyst to explain why some of the other metros became hotbeds of agency employment, and those in decline may be reflecting long-term regional industry and population changes.

Concentrations of Agency vs. Ad Industry vs. Employment in All Sectors

We were curious if agency employment tracked with employment in the broader advertising and marketing industry (including public relations, media agencies and reps, direct mail, outdoor advertising, and ad distribution services). The rankings were not quite the same. Washington, D.C. and Atlanta were in the top 10 metros for ad/marketing but were replaced by Detroit and Orlando in the agency rankings.

We then looked at MSAs ranked by employment in all industry sectors, and there were even fewer commonalities. Agency centers like San Francisco, Detroit, and Minneapolis didn’t even make the top 10 for all industry sectors, and #10 ad center Orlando was way down at #24 for all sector employment. Metros Ogden, UT and Boulder, CO, ranked #39 and #40 in agency employment, didn’t even make the top 100 for general employment, coming in at #107 and #126. By contrast, populations centers like Washington, Philadelphia, and Atlanta just missed the top 10 agency metros, and behemoth Houston, while #7 for employment in all sectors, didn’t even crack the top 20 agency MSAs, coming in at #27.

Impact of Recession

The numbers tell the story of the recession’s impact on the ad industry. Our original plan was to look at agency employment by MSA for the five year intervals of 2006, 2011, and 2016. While it would have been reassuring to see a continuous upward or downward trajectory in the rankings of specific MSAs, the Great Recession caused major disruptions in the agency world, as it did everywhere else.

While there were some steady metros, others fluctuated wildly with the economic anomalies for understandable reasons. Las Vegas was (perhaps artificially) highly ranked in 2006 at #29, as the population grew with major home construction and cheap mortgages. It plummeted to #38 in 2011 when the bottom fell out of the housing market, but then rebounded to an even stronger position of #20 by 2016.

Likewise, financial hub Charlotte saw a significant drop in rank in agency employment, from #26 in 2006 to #47 in 2011, likely due to recession-era banking troubles, but it’s back to #28 in 2016.

Conversely and less easily explained, a few MSAs improved during the recession and fell back afterward. St. Louis went from #22 in 2006 to #13 in 2011, but then dropped back to #18 in 2016. Similarly, Cincinnati improved from the rank of #28 in 2006 to #20 in 2011, and recalibrated to #25 in 2016. Trenton and Boulder each experienced phenomenal growth despite the recession, leapfrogging over dozens of other metros from 2006 to 2011, and then both lost ground by 2016 (#74 to 40 to 46 for Trenton; #97 to 30 to 40 for Boulder).

Looking Forward

While New York, Los Angeles, and Chicago are likely to remain firmly ensconced in the top spots indefinitely, the other agency hubs will vary with the fortunes of the surrounding industries, and will follow broader shifts in the economy and population.

This article was first published by the 4A’s, find the original article and further research here.