Ad Age Special Report: Direct Marketing, Interactive Help Drive 11% Increase in Marketing Services Rapp Collins No. 1 DM Agency by Revenue
Tuesday, 23 May 2006
New marketing media are having a powerful impact on advertising expenditures and ad agencies. Need proof? Check out the 62nd annual Advertising Age Agency Report, which was published earlier this month. In fact, according to the report, advertisers’ increasing shift in spending in marketing communications from traditional media to new media helped marketing services’ spending more than double last year.
Ad Age’s agency report says marketing services – identified as all forms of direct marketing, interactive, and sales promotion in its report – grew 11.3 percent to $7.66 billion in revenue in the US.
Meanwhile, traditional advertising and its media component advanced to $12.02 billion, a 5.1 percent increase that was slightly stronger than last year.
The report further says that, coupled with marketing services and advertising with healthcare advertising's $1.96 billion and public relations’ $2.74 billion, and total US marketing communications revenue reached $24.38 billion. That is a 7.2 percent increase over the previous year, according to Ad Age.
Top Four Agencies
Much of this activity in marketing communications, Ad Age notes, is cornered by the world's top four marketing organizations, which once again is led by Omnicom Group. Omnicom, on a global basis, generated $10.48 billion in revenue, up 7.5 percent. In the US, it brought in $5.74 billion, up 10 percent.
The Ad Age agency report shows that WPP Group was a close second. WPP recorded revenue of $10.03 billion, up 4 percent. This is an Ad Age pro forma estimate that includes the 2005 acquisitions of Grey Global Group and Sydney-based Communications Group as if they occurred January 1, 2004.
Interpublic Group of Cos. closed a distant third at $6.27 billion in worldwide revenue, down 1.8 percent, its third consecutive annual decline.
Ad Age placed Publicis Groupe in fourth place. It generated $5.11 billion worldwide, up 6.9 percent.
These four agencies corner the US marketing communications business, according to Ad Age. In fact, last year, they claimed 58 percent of the combined total for advertising and media, or $6.97 billion. Ad Age points out that this is not a surprise given that 40 of the top 50 US agencies by core ad revenue are owned by these four companies.
Omnicom Owns No. 1 DM Agency
Also, these four companies extended their marketing services reach, generating $3.19 billion in revenue to grab 41.6 percent of that US market.
Omnicom owns the US's No. 1 direct marketing agency, Rapp Collins Worldwide at $274.1 million, up 12 percent, as well as the US's No. 1 sales promotion shop, BBDO Detroit, formerly BBDO Detroit CRM.
Omnicom gained $1.43 billion in the US from its marketing services shops in this report, up 13.8 percent, nearly equal to the $1.46 billion (up 9.7 percent) it produced from traditional ad and media agencies paced by BBDO Worldwide and DDB Communications Worldwide, both of which are among the nation's top 10 agencies by core advertising.