A Look at What's Driving Agency Revenue in 2013

Mark Covert

PPC Strategist

U.S. agency revenue may have increased 5.6% in 2012, but that was the slowest growth since the ad market started to recover in 2010. This year, agencies are on track for another period of moderate growth. U.S. agency revenue totaled $35.6 billion in 2012, so we can expect similar numbers in 2013. Here’s how the numbers break down for the various disciplines in marketing communications:

 

  • Advertising, $11 billion

  • CRM/Direct, $6.6 billion

  • Public relations, $3.9 billion

  • Health care, $3.6 billion

  • Media, $3.3 billion

  • Promotion, $2.9 billion

 

Digital revenue is what constitutes a large part of U.S. agency growth, bringing in $11.6 billion or 32.5% growth in 2012. These numbers continue to increase each year, from 30.3% in 2011, 28% in 2010 and 25.8% in 2009. While other sectors in marketing communications may not have had the same success, the promising news is that all sectors showed improvement on some level. From promotion to health care, each discipline saw positive growth and should continue on this modest path in 2013.

 

Just as U.S. agencies have stunted growth as the result of the Great Recession, further growth is impacted by troubles in the eurozone. Problems in Europe are part of the reason why we have only seen 2% to 3% growth on a global level, and even top contenders like Omnicom have an organic growth rate of 3.5%. There’s no doubt that we want to see the U.S. growing at a stronger rate. Still, slow and steady growth is better than no growth, and once the eurozone recovers, we should see more advancement.

 

Currently, the world is divided in terms of agency growth. Latin America and Asia are strong, the U.S. is growing slowly but steadily and the eurozone is experiencing challenges, with the euro dropping to 7.7% against the dollar last year. To help get out of this slump, more companies are looking for more ad hoc and less ad agency. Companies are consolidating for efficiency purposes, but this could potentially knock out 70 to 80 percent of local agencies.

 

At the end of the day, it’s not the agency brands that companies will be intent on but developing strong teams that have the best people working on their businesses.

 
About the Author: Mark Covert

Mark has joined the SEM Geeks team as a PPC Strategist in early 2015. Mark graduated from East Stroudsburg University with a Bachelor’s of Science in Sports Management and a minor in Business. Mark started out early on in his career from freelancing web design, which ultimately evolved into marketing clients websites to create a great user experience and the best possible results for both parties. Prior to joining the Geeks, he has worked for DNA marketing, managing several large Fortune 500 paid search clients, while continuing to refine his skills and knowledge within the industry.

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