Ad Age Agency Report 2015 Shows Strong Growth Across The Board
The 2015 Ad Age Report shows U.S. agency revenue rise 5.4% to a record $43.6 billion in 2014, with growth driven by digital work.
The annual Ad Age Agency Report 2015 shows strong growth across-the-board driven by digital, which captures 40% of 2015 U.S. Agency revenue.
Here are some of the stand-out facts and figures:
New Entrants dominate the market
Agencies face increasing competition in digital marketing from consulting and tech-services firms.
The new guard are firmly staking their claim in digital marketing services with IBM Interactive Experience ranking as the biggest digital network, followed by Deloitte Digital, Accenture Interactive and Epsilon. In fact, on WPP’s Wunderman makes the Top 5 from the established agency networks.
IPG’s Chairman Michael Roth says:
There’s no question that we’re competing against companies that we never competed against before: Deloitte Consulting, Accenture, IBM… It’s a very difficult competitive market out there, and we just have to be on our game.
Digital continues to grow
Publicis Groupe recorded 7.3% organic growth in digital revenue, at 41.9% of worldwide revenues in 2014 (up from 38.4% in 2013), compared with a decline of 1.4% in non-digital (“analog”) work.
WPP recorded 36% of worldwide 2014 revenues from digital, up from 35% in 2013.
The Ad Age Annual Report 2015 also records growth in all major U.S. agency disciplines, with revenue gains of 4.4% for ad agencies and 10.3% in health-care communications (watch this space! Health-care is on the rise again).
Other stand-out figures include growth in CRM, DM, promotions and PR (showing an av. 5-6% YOY growth), as well as a 30% growth in programmatic revenues, as reported by WPP platform Xaxis, which reported 2014 revenues of $775m. Omnicom reported a similar meteoric rise in programmatic revenues up $166m from $140m to $306m in 2014.
Reflecting across-the-board growth, investors remain bullish with both Dentsu and WPP shares reaching and all-time high in April, Omnicom reaching it’s highest ever adjusted closing price in March and IPG trading at it’s highest price since 2002.
All this reflects the continued rise in major-media ad spending, which is forecast to grow a further 3.7% in 2015 to reach $182.8 billion (ZenithOptimedia).
2014 saw WPP close a deal a week, notching up 65 (mostly small) transactions.
Omnicom completed 10 acquisitions in 2014 and indicated that this number will be surpassed in 2015 after setting up a dedicated acquisitions group.
In all, the 2015 Ad Age Report shows growth driven by digital, coupled with increased competition from new entrants, bullish investors and steady growth in major-media ad spending.
Ad Age Data Centre Subscribers can read the full report here.