The agency business has come back to life, with U.S. revenue jumping 7.7% domestic market led a 2010 worldwide rebound in advertising and marketing services. Digital marketing led the charge, accounting for 28% of agency revenue. The U.S. was the worlds star performer in 2010 for advertising and marketing services, exceeding expectations and outpacing growth in most other regions.
The U.S. advertising and marketing-services firms have added 23,100 jobs since ad industry employment hit bottom in February 2010. The study finds that the Big Four agency holding companies -- WPP, Omnicom Group, Publicis Groupe, Interpublic Group of Cos. in 2010 added 11,000 jobs (including acquisitions) after slashing 22,000 jobs in 2009
2010 revenue for marketing-communications agencies including advertising, marketing services, media, health care and public relations rose 7.7% to $30.4 billion. Shares in WPP, Omnicom and Interpublic in first-quarter 2011 reached their highest levels since pre-recession 2007, a sign of investors optimism about the sector. Publicis shares this year reached their highest point since 2000.
Ad spending and employment remain well off their peak. Publicis ZenithOptimedia says U.S. ad/marketing-services spending wont break its 2007 record until 2013. U.S. ad and marketing-services firms employ 76,500 fewer people today than at the industrys pre-recession, late-2007 peak.
Omnicom in 2010 reported 8.7% revenue growth after factoring out acquisitions/divestitures and the impact of foreign exchange, beating its 6.4% worldwide revenue growth In 2010, Interpublic reported robust 10.1% organic revenue growth, and Publicis posted 9.9% organic growth in North America, better in both cases than any other single region except Latin America.
Revenue for the worlds 50 largest agency companies totalled $62.2 billion in 2010, up 9.4%. U.S. revenue for those firms jumped 11.4%. The U.S. accounted for 42% of the top 50 agency firms worldwide revenue. Marketing-communications companies have returned to merger-and-acquisition mode, doing a lot of buying and some selling.
in April 2011, WPP agreed to buy Commarco Holding, a German agency group controlled since 2003 by a private-equity firm. WPP completed 25 small and midsize acquisitions in 2010, including Canadian agency Taxi; I-Behavior, a U.S. database marketing firm; Marketing Direct Inc., a U.S. marketing-services company; and U.S. digital agencies Blue State Digital and Digitaria. WPP also rolled up four WPP shops into Possible Worldwide, a global digital agency.
Took majority ownership of Clemenger Group, an Australian agency company in which Omnicoms BBDO Worldwide had been a minority investor since 1972. Omnicom also purchased Communispace, a digital market-research- services firm; bought The Modellers, a market-research company; acquired The Core, a U.K. design and branding agency; bought Sales Power, an in-store promotion company in China; and purchased a majority stake in Maslov PR, a PR agency in Russia. Omnicom disbanded pioneering digital agency Agency.com, splitting its offices among TBWA Worldwide network agencies. Omnicom sold a majority stake in U.S. PR firm Bordeur Partners.
Omnicom is undertaking a global review of operations with the aim to reorganize or dispose of what "non-core, low-growth, low-margin businesses. generally in smaller markets." As of April 2011, Omnicom had disposed of units with combined annual revenue of about $120 million.
Made two deals in Brazil, buying digital shop AG2 and a 60% stake in agency firm Talent Group. Publicis also acquired PR firms Eastwei Relations (now Eastwei MSL) in China and Interactive Communications Ltd. (now ICL MSL) in Taiwan. Publicis bought U.K. integrated/digital-marketing firms Airlock, Chemistry Communications Group, Holler and Kitcatt Nohr. Publicis agreed to sell its 56% stake in U.K. PR firm Freud Communications back to Chairman Matthew Freud.
Bought U.K. shop Delaney Lund Knox Warren from agency firm Creston, making the renamed DLKW Lowe the U.K. hub of Lowe Worldwide. Interpublic increased its stake in Brooklyn-based digital agency Huge to 75% from 51%. The company did two deals in Brazil, acquiring digital shop Cubocc and merging McCann Ericksons Brazil operation with local agency W/Brasil. Interpublic sold U.S. PR agency MWW Group.
Dentsu Inc. bought U.S. digital ventures Innovation Interactive ( 360i) and Firstborn. The Japanese company set up Dentsu Network West as a New York-based network for its agencies in the Americas and Europe. Aegis Group bought Mitchell Communication Group, an Australian agency firm.