Advertising & marketing services agencies. U.S. advertising business n $263.8 billion in media...

advertising & advertising & marketing services marketing services agenciesagencies

advertising & advertising & marketing services marketing services agenciesagencies

U.S. advertising businessU.S. advertising businessU.S. advertising businessU.S. advertising business

$263.8 billion in media $263.8 billion in media expendituresexpenditures (2004 estimate)(2004 estimate)

5,000+ agencies5,000+ agencies 243,000+ people employed243,000+ people employed New York and Chicago New York and Chicago

still dominatestill dominate

$263.8 billion in media $263.8 billion in media expendituresexpenditures (2004 estimate)(2004 estimate)

5,000+ agencies5,000+ agencies 243,000+ people employed243,000+ people employed New York and Chicago New York and Chicago

still dominatestill dominate

agency billing by cityagency billing by cityagency billing by cityagency billing by cityNew YorkNew York $61,264.4$61,264.4

ChicagoChicago 17,379.917,379.9

Los AngelesLos Angeles 10,545.610,545.6

DetroitDetroit 7,946.37,946.3

MinneapolisMinneapolis 6,087.26,087.2

San FranciscoSan Francisco 5,101.95,101.9

BostonBoston 3,993.73,993.7

DallasDallas 3,234.83,234.8

AtlantaAtlanta 2,620.92,620.9

PhiladelphiaPhiladelphia 2,379.62,379.6

2001.

Dollars in millions.

Source: AdAge.com

major types of agencies:major types of agencies:major types of agencies:major types of agencies: mega-agency groupsmega-agency groups national, regional, local national, regional, local

specialized/niche agenciesspecialized/niche agencies agency service suppliersagency service suppliers

media buying, creative servicesmedia buying, creative services

mega-agency groupsmega-agency groups national, regional, local national, regional, local

specialized/niche agenciesspecialized/niche agencies agency service suppliersagency service suppliers

media buying, creative servicesmedia buying, creative services

mega-agency groupsmega-agency groupsmega-agency groupsmega-agency groups

prompted by mergers and prompted by mergers and client globalizationclient globalization

financial pressures financial pressures

prompted by mergers and prompted by mergers and client globalizationclient globalization

financial pressures financial pressures

martin sorrell,chairman WPP

service multinational service multinational accountsaccounts

subsidiaries provide subsidiaries provide “IMC” (integrated marketing “IMC” (integrated marketing communication) services communication) services

service multinational service multinational accountsaccounts

subsidiaries provide subsidiaries provide “IMC” (integrated marketing “IMC” (integrated marketing communication) services communication) services

Omnicom GroupOmnicom GroupOmnicom GroupOmnicom Group

Three agency networks Three agency networks

BBDO Worldwide BBDO Worldwide $1,062.7 million / 3,400 U.S. employees / $1,062.7 million / 3,400 U.S. employees /

20,500 worldwide employees20,500 worldwide employees DDB Worldwide DDB Worldwide

$815.0 million / 15,000 U.S. employees$815.0 million / 15,000 U.S. employees TBWA Worldwide TBWA Worldwide

$665.9 million / 8,700 U.S. employees$665.9 million / 8,700 U.S. employees

Three agency networks Three agency networks

BBDO Worldwide BBDO Worldwide $1,062.7 million / 3,400 U.S. employees / $1,062.7 million / 3,400 U.S. employees /

20,500 worldwide employees20,500 worldwide employees DDB Worldwide DDB Worldwide

$815.0 million / 15,000 U.S. employees$815.0 million / 15,000 U.S. employees TBWA Worldwide TBWA Worldwide

$665.9 million / 8,700 U.S. employees$665.9 million / 8,700 U.S. employees

mega-agency pros & consmega-agency pros & consmega-agency pros & consmega-agency pros & cons

positives:positives: larger talent poollarger talent pool negotiating cloutnegotiating clout financial rewardsfinancial rewards account securityaccount security competitive edgecompetitive edge strong partnershipsstrong partnerships more servicesmore services international linkinternational link

positives:positives: larger talent poollarger talent pool negotiating cloutnegotiating clout financial rewardsfinancial rewards account securityaccount security competitive edgecompetitive edge strong partnershipsstrong partnerships more servicesmore services international linkinternational link

negatives:negatives: people vs. profitpeople vs. profit creativity vs. sizecreativity vs. size conflict of conflict of

interestsinterests people businesspeople business

negatives:negatives: people vs. profitpeople vs. profit creativity vs. sizecreativity vs. size conflict of conflict of

interestsinterests people businesspeople business

national, regional & localnational, regional & localnational, regional & localnational, regional & local

most most nationalnational and and regionalregional agencies agencies are part of mega-agency groupsare part of mega-agency groups

regionalregional and and local agencies local agencies work with work with smaller clients who are usually located smaller clients who are usually located nearbynearby

most most nationalnational and and regionalregional agencies agencies are part of mega-agency groupsare part of mega-agency groups

regionalregional and and local agencies local agencies work with work with smaller clients who are usually located smaller clients who are usually located nearbynearby

Top 10 U.S. Agency BrandsTop 10 U.S. Agency BrandsRanked by core advertising revenue - $millionsRanked by core advertising revenue - $millionsTop 10 U.S. Agency BrandsTop 10 U.S. Agency BrandsRanked by core advertising revenue - $millionsRanked by core advertising revenue - $millions

J. Walter Thompson Co. (WPP) - 476.5J. Walter Thompson Co. (WPP) - 476.5 Leo Burnett Worldwide (Publicis) - 362.7Leo Burnett Worldwide (Publicis) - 362.7 McCann-Erickson Worldwide (Interpublic) - 320.8McCann-Erickson Worldwide (Interpublic) - 320.8 BBDO Worldwide (Omnicom) - 272.0BBDO Worldwide (Omnicom) - 272.0 Ogilvy & Mather Worldwide (WPP) - 249.3Ogilvy & Mather Worldwide (WPP) - 249.3 DDB Worldwide Communications (Omnicom) - 248.1DDB Worldwide Communications (Omnicom) - 248.1 Grey Worldwide (WPP) - 231.9Grey Worldwide (WPP) - 231.9 Foote, Cone & Belding Foote, Cone & Belding WorldwideWorldwide (Interpublic) - 225.1 (Interpublic) - 225.1 Y & R Advertising (WPP) - 192.5Y & R Advertising (WPP) - 192.5 Publicis Worldwide (Publicis) - 184.7Publicis Worldwide (Publicis) - 184.7

J. Walter Thompson Co. (WPP) - 476.5J. Walter Thompson Co. (WPP) - 476.5 Leo Burnett Worldwide (Publicis) - 362.7Leo Burnett Worldwide (Publicis) - 362.7 McCann-Erickson Worldwide (Interpublic) - 320.8McCann-Erickson Worldwide (Interpublic) - 320.8 BBDO Worldwide (Omnicom) - 272.0BBDO Worldwide (Omnicom) - 272.0 Ogilvy & Mather Worldwide (WPP) - 249.3Ogilvy & Mather Worldwide (WPP) - 249.3 DDB Worldwide Communications (Omnicom) - 248.1DDB Worldwide Communications (Omnicom) - 248.1 Grey Worldwide (WPP) - 231.9Grey Worldwide (WPP) - 231.9 Foote, Cone & Belding Foote, Cone & Belding WorldwideWorldwide (Interpublic) - 225.1 (Interpublic) - 225.1 Y & R Advertising (WPP) - 192.5Y & R Advertising (WPP) - 192.5 Publicis Worldwide (Publicis) - 184.7Publicis Worldwide (Publicis) - 184.7

Source: 2005 Ad Age Agency Report

Omnicom Agency BrandsOmnicom Agency BrandsOmnicom Agency BrandsOmnicom Agency Brands

Della Femina, Rothschild, Jeary & Della Femina, Rothschild, Jeary & PartnersPartners

GMMBGMMB Goodby, Silverstein & PartnersGoodby, Silverstein & Partners GSD&MGSD&M Merkley Newman Harty PartnersMerkley Newman Harty Partners Zimmerman & PartnersZimmerman & Partners

Della Femina, Rothschild, Jeary & Della Femina, Rothschild, Jeary & PartnersPartners

GMMBGMMB Goodby, Silverstein & PartnersGoodby, Silverstein & Partners GSD&MGSD&M Merkley Newman Harty PartnersMerkley Newman Harty Partners Zimmerman & PartnersZimmerman & Partners

specialized/niche agenciesspecialized/niche agenciesspecialized/niche agenciesspecialized/niche agencies

ethnic agenciesethnic agencies ethnic agenciesethnic agencies

Omnicom Ethnic AgenciesOmnicom Ethnic AgenciesOmnicom Ethnic AgenciesOmnicom Ethnic Agencies

HispanicHispanic Del Rivero Messianu DDBDel Rivero Messianu DDB Dieste, Harmel & PartnersDieste, Harmel & Partners

Ad Age multicultural shop of the yearAd Age multicultural shop of the year

African-AmericanAfrican-American FootstepsFootsteps

HispanicHispanic Del Rivero Messianu DDBDel Rivero Messianu DDB Dieste, Harmel & PartnersDieste, Harmel & Partners

Ad Age multicultural shop of the yearAd Age multicultural shop of the year

African-AmericanAfrican-American FootstepsFootsteps


ethnic agenciesethnic agencies ethnic agenciesethnic agencies internet agencies internet agencies internet agencies internet agencies

Omnicom Internet/InteractiveOmnicom Internet/InteractiveOmnicom Internet/InteractiveOmnicom Internet/Interactive

Martin-WilliamsMartin-Williams Tribal DDBTribal DDB

Martin-WilliamsMartin-Williams Tribal DDBTribal DDB


ethnic agenciesethnic agencies ethnic agenciesethnic agencies internet agenciesinternet agencies internet agenciesinternet agencies business-to-business agenciesbusiness-to-business agencies business-to-business agenciesbusiness-to-business agencies

Omnicom B-to-B Omnicom B-to-B Omnicom B-to-B Omnicom B-to-B

Doremus & Co.Doremus & Co.(split from Dow Jones & Co. in 1991)(split from Dow Jones & Co. in 1991)

Doremus & Co.Doremus & Co.(split from Dow Jones & Co. in 1991)(split from Dow Jones & Co. in 1991)


ethnic agenciesethnic agencies ethnic agenciesethnic agencies internet agenciesinternet agencies internet agenciesinternet agencies business-to-business agenciesbusiness-to-business agencies business-to-business agenciesbusiness-to-business agencies creative boutiques and creative boutiques and

design housesdesign houses

creative boutiques and creative boutiques and design housesdesign houses

Omnicom Creative/DesignOmnicom Creative/DesignOmnicom Creative/DesignOmnicom Creative/Design

Arnell Group (brand identification)Arnell Group (brand identification) Arnell Group (brand identification)Arnell Group (brand identification)

other suppliersother suppliersother suppliersother suppliers

provide “unbundled” servicesprovide “unbundled” services one part of what an agency doesone part of what an agency does

media buying servicesmedia buying services

provide “unbundled” servicesprovide “unbundled” services one part of what an agency doesone part of what an agency does

media buying servicesmedia buying services

Omnicom “Unbundled”Omnicom “Unbundled”Omnicom “Unbundled”Omnicom “Unbundled”

OMD WorldwideOMD Worldwide 80 offices80 offices 45 countries45 countries Global media partner of BBDO Global media partner of BBDO

Worldwide, DDB Worldwide, TBWA Worldwide, DDB Worldwide, TBWA Worldwide, & DAS agenciesWorldwide, & DAS agencies

OMD WorldwideOMD Worldwide 80 offices80 offices 45 countries45 countries Global media partner of BBDO Global media partner of BBDO

Worldwide, DDB Worldwide, TBWA Worldwide, DDB Worldwide, TBWA Worldwide, & DAS agenciesWorldwide, & DAS agencies

other suppliersother suppliersother suppliersother suppliers

freelancers & consultantsfreelancers & consultants production companies production companies in-house or “house” agenciesin-house or “house” agencies

agencies owned by clients agencies owned by clients

freelancers & consultantsfreelancers & consultants production companies production companies in-house or “house” agenciesin-house or “house” agencies

agencies owned by clients agencies owned by clients

in-house agenciesin-house agenciesin-house agenciesin-house agencies advantagesadvantages && disadvantagesdisadvantages advantagesadvantages && disadvantagesdisadvantages

from the gap’sfrom the gap’s““house agency”house agency”from the gap’sfrom the gap’s

““house agency”house agency”

in-house agenciesin-house agenciesin-house agenciesin-house agencies advantagesadvantages && disadvantagesdisadvantages advantagesadvantages && disadvantagesdisadvantages

from the gap’sfrom the gap’s““house agency”house agency”from the gap’sfrom the gap’s

““house agency”house agency”

familiarityfamiliarity specializationspecialization fast servicefast service cost savingscost savings confidentialityconfidentiality


in-house agenciesin-house agenciesin-house agenciesin-house agencies advantagesadvantages && disadvantagesdisadvantages


advantagesadvantages && disadvantagesdisadvantages familiarityfamiliarity specializationspecialization fast servicefast service cost savingscost savings confidentialityconfidentiality

objectivityobjectivity resourcesresources fresh ideasfresh ideas extra cost and extra cost and

overheadoverhead

objectivityobjectivity resourcesresources fresh ideasfresh ideas extra cost and extra cost and

overheadoverhead

2 primary roles of agencies2 primary roles of agencies2 primary roles of agencies2 primary roles of agencies

idea generationidea generation brand-buildingbrand-building

idea generationidea generation brand-buildingbrand-building

idea generationidea generationidea generationidea generation manufacture ideasmanufacture ideas manufacture ideasmanufacture ideas

ideas are lifeblood of the agencyideas are lifeblood of the agency

create intellectual capitalcreate intellectual capital create and sell different create and sell different

kinds of ideaskinds of ideas marketing strategiesmarketing strategies promotional opportunitiespromotional opportunities even new product ideas...even new product ideas...

ideas are lifeblood of the agencyideas are lifeblood of the agency

create intellectual capitalcreate intellectual capital create and sell different create and sell different

kinds of ideaskinds of ideas marketing strategiesmarketing strategies promotional opportunitiespromotional opportunities even new product ideas...even new product ideas...

brand-buildingbrand-buildingbrand-buildingbrand-building

““The agency’s purpose is to The agency’s purpose is to createcreate and and directdirect communication about a communication about a product or service product or service so that the brand so that the brand is perceived to have a unique is perceived to have a unique value or brand personality.”value or brand personality.”

Let’s look at some examples...Let’s look at some examples...

““The agency’s purpose is to The agency’s purpose is to createcreate and and directdirect communication about a communication about a product or service product or service so that the brand so that the brand is perceived to have a unique is perceived to have a unique value or brand personality.”value or brand personality.”

Let’s look at some examples...Let’s look at some examples...


MarlboroMarlboro Leo Burnett Leo Burnett

MarlboroMarlboro Leo Burnett Leo Burnett


McDonald’sMcDonald’s DDB Needham DDB Needham

McDonald’sMcDonald’s DDB Needham DDB Needham


PepsiPepsi BBDO BBDO

PepsiPepsi BBDO BBDO


NikeNike Wieden + Kennedy Wieden + Kennedy

NikeNike Wieden + Kennedy Wieden + Kennedy


American ExpressAmerican Express Ogilvy & Mather Ogilvy & Mather

American ExpressAmerican Express Ogilvy & Mather Ogilvy & Mather


AppleApple Chiat/DayChiat/Day

AppleApple Chiat/DayChiat/Day


more and more, agencies are being more and more, agencies are being involved ininvolved in all areasall areas of marketers’of marketers’ brand-building activitiesbrand-building activities

today, it’s more thantoday, it’s more than advertisingadvertising integrated marketing integrated marketing

communicationscommunications (IMC) (IMC)

more and more, agencies are being more and more, agencies are being involved ininvolved in all areasall areas of marketers’of marketers’ brand-building activitiesbrand-building activities

today, it’s more thantoday, it’s more than advertisingadvertising integrated marketing integrated marketing

communicationscommunications (IMC) (IMC)

means means integrationintegrationmeans means integrationintegration

Advertising & marketing services agencies. U.S. advertising business n $263.8 billion in media...

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