Ad Age magazine released its "Agency Report 2014." It compiled data from over 900 U.S. agencies across advertising, media, digital, marketing services, and PR. In 2013, the gross profit of U.S. advertising agencies in Japan increased 3.7% year-on-year to $39.1 billion. While this marked the highest revenue ever, it represented the lowest growth rate since 2010, when the advertising market began its recovery.
Digital continued to drive sales growth, its share of gross profit rising from 32.5% in 2012 to 35.3%, exceeding one-third of the total. In contrast, the analog sector continued its significant decline.
By specialty, media agencies saw gross profit rise 13.8%, reflecting the digital sector's strength. Direct marketing grew 5.2%. Promotion agencies increased 4.0% due to robust event marketing. PR agencies grew only 2.4%, impacted by the absence of major elections.
While the rapid rise of emerging agencies leveraging digital technology was notable, the solid performance of mega-agencies was also reflected in their stock prices. Publicis hit a record high in February, and WPP did so in January. Interpublic reached its highest level since 2002 in March, and Dentsu Inc. reached its highest since December 2006.
Regarding future prospects, Omnicom CEO John Ren stated, "2014 has started very well," while Interpublic CEO Michael Roth expressed optimism, noting, "Companies are further strengthening their advertising investments." ZenithOptimedia forecasts U.S. advertising spending in 2014 to grow 4.9% to $167.3 billion, the strongest growth since 2004. The primary driver remains the internet sector.
In the global advertising agency rankings, Dentsu Inc. maintained its top position, significantly outpacing the rest. Gross revenue fell nearly 20% to $2.2 billion, a 14.0% decrease, largely due to currency effects. Second place was BBDO ($1.5 billion, up 1.7%), followed by McCann Erickson ($1.4 billion, up 1.1%).
In the global advertising group rankings, WPP took the top spot with gross revenue increasing 4.8% to $17.3 billion. Omnicom ranked second ($14.6 billion, +2.6%), Publicis third ($9.2 billion, +8.7%), Interpublic fourth ($7.1 billion, +2.4%), and Dentsu Group fifth ($5.8 billion, -9.4%). The "Big Five" structure, formed by Dentsu Inc.'s acquisition of Aegis in 2013, remains intact, with the top five groups pulling away from those ranked sixth and below.
Source: Ad Age
Revenue, Staffing, Stocks and Digital Show Growth for Agencies in 2014 Report
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