Marketing is a vast industry with numerous agencies that cater to the needs of businesses across different niches.
But just how many marketing agencies are there in the US?
What is their net profit margin, and how much do they value?
In this blog, experts from VH-Info answer all these questions and more!
We will take a deep dive into the marketing agency industry, including its growth prospects and the number of active clients that agencies usually handle.
Additionally, we will also list down some of the best multi-billion dollar marketing agencies that have made it to the top with their exceptional marketing strategies. Join us as we uncover some surprising insights about the world of marketing!
How many Marketing Agencies are there in the United States?
There are 90,800 marketing agencies operating in the US in 2023. There were 86,814 marketing & advertising agency businesses in the US in 2022, with an increase of 4.6% from 2021. The number of marketing agencies can fluctuate year to year based on many factors. If we assume a similar growth rate as advertising agencies from 2023 to 2024 (+4.6%), we could estimate there will be about 94,980 marketing agencies in the US in 2024.
What is the net profit margin of a marketing agency?
Marketing agencies typically have a net profit margin ranging from 6.0% to 12.0%. This means that, on average, for every dollar they earn, they keep between 6 and 12 cents as profit. These numbers come from industry benchmarks, and they suggest that marketing agencies have room for growth and improving their profitability with a higher growth rate.
To remain competitive, marketing agencies have shifted their focus to their most profitable service offerings and have introduced additional services to meet the needs of their clients. Low margins don’t mean agencies can’t make money; it just means there’s potential for them to do better.
How much does a marketing agency typically value?
A marketing agency is usually valued at around 3 to 4 times its annual revenues. Understanding the value of your agency is important because it helps you negotiate a fair price when you want to sell it and avoid burnout. This way, you can make sure you’re compensated properly for the hard work you’ve put into your agency at the right time.
How many active clients can a market agency have?
A marketing agency typically manages around 10 to 20 active clients. Research shows that having this number of clients is ideal for maximizing revenue while minimizing challenges.
Having a larger client base can be beneficial, but it’s important not to take on too many clients because it can lead to overwhelm. This can result in overworked staff, reduced customer service quality, and potential revenue loss.
If you want to grow your agency and take on more clients, it’s essential to do so carefully. Simply adding more people without improving your work processes can make things worse. Effective leadership and management require efficient procedures to handle the increased workload.
How much do researchers anticipate the marketing agency industry will gain by 2024?
Despite a minor setback in 2020 caused by concerns related to the coronavirus pandemic, researchers anticipate that the global marketing agency industry will grow and reach a total value of $769.9 billion by 2024. This anticipated growth is primarily being driven by advancements in artificial intelligence, which are enabling marketing organizations to make better use of consumer data and stay ahead in the competitive advertising industry.
These top players give insights into the size and diversity of the marketing agency industry, which is expected to continue its growth in the coming years.
How many marketing agencies discovered new clients through social media platforms?
About 68% of marketing agencies found new clients through social media platforms. The second most common source for gaining clients was events, with 55% of agencies reporting success. Referrals were also a significant source at 55%, and technology collaborations brought in new clients for 42% of agencies.
To ensure they have a steady stream of new clients, many agencies rely on multiple sources rather than just one. This diversification helps them stay in business and continue to grow.
BEST Multi-Billion Dollar Marketing Agencies
Let’s have a look at some of the best digital advertising agencies across the globe to drive revenue growth for your business using techniques such as lead generation, email marketing, blockchain, paid ads, PPC, SEO, etc.
Publicis Worldwide
Publicis Worldwide, a part of Publicis Group, is a global creative agency network founded in 1926 with headquarters in Seattle.
With 16,000 team members and an annual revenue of $5 billion, they excel in strategic marketing transformation through data and technology, offering services such as advertising, brand strategy, digital marketing, and more.
They’ve earned industry recognition, ranking as the 4th most creative network by Cannes Lions in 2021 and winning the Golden Drum Festival Agency of the Year, along with 36 Clio Awards in the same year, highlighting their creativity and excellence in advertising.
OMD Worldwide
OMD Worldwide, a part of Omnicom Group, is the world’s largest media agency network. They emphasize combining data-driven insights with empathy and inclusivity to drive growth and performance and maximize ROI. Based in New York and founded in 1996, they have approximately 13,000 team members and generate an annual revenue of around $4 billion. OMD has garnered industry recognition, including being the most awarded media agency at Cannes with 38 wins, named Adweek Global Ad Agency of the Year in 2021 and 2020, and earning the Media Leaders Awards Advertising/Media Technology of the Year.
VMLY&R
VMLY&R is a marketing and communications company, part of the global advertising and public relations group WPP. They specialize in services such as advertising, digital and social media, sales promotion, direct marketing, and brand strategy. Established in 1926 and headquartered in Kansas City, MO, they have around 13,000 team members and an annual revenue of about $4 billion. Notable recent achievements include winning the 2022 Pharma Choice Awards Gold in the video category, VMLY&R Mexico being named Agency of the Year at Circulo de Oro, and receiving a perfect score of 100 on the Human Rights Campaign Foundation’s 2022 Corporate Equality Index. They also have a strong presence on social media, with successful campaigns on platforms such as Facebook, Instagram, Twitter, and LinkedIn.
Mindshare
Mindshare is a worldwide company specializing in media and marketing services to help businesses gain a competitive edge in their marketing efforts. Their capabilities include performance marketing, media buying, communications planning, eCommerce consulting, ad operations, martech, and ad tech consulting, data integrity, reporting systems, and more.
Founded in 1997 and headquartered in London, they have approximately 10,000 team members and an annual revenue of around $3 billion. Recent recognitions include being named WARC Media’s #1 Media Agency Network in 2021 and 2020, MediaPost’s Agency of the Year in 2021, and winning 17 trophies at the 2021 Festival of Media Global Awards.
BBDO Worldwide
BBDO Worldwide is a comprehensive global network with over 200 locations worldwide, originally established in 1891 as Batten Company and later merged to become BBDO in 1928. Their services cover brand management, interactive marketing, direct marketing, campaign strategy, and design.
Headquartered in New York, they employ approximately 15,000 team members and report an annual revenue of about $3 billion. Recent accolades include being named Agency of the Year at the 2021 Cannes Lions, earning recognition as one of Fast Company’s World’s Most Innovative Companies from 2018 to 2021, and BBDO Dubai being ranked as the 5th most awarded agency in the WARC Rankings Creative 100.
Ogilvy
Ogilvy is a worldwide agency known for advertising, marketing, and public relations with a presence in 131 offices across 93 countries. They offer various services, including advertising, brand strategy, public relations, influencer marketing, digital transformation, and customer engagement.
Founded in 1948 and headquartered in New York, they have a team of about 10,000 members and an annual revenue of approximately $3 billion. Recent achievements include being recognized as one of the Best Places to Work for LGBTQ Equality for eight consecutive years, and they were named among the WARC Creative 100 World’s Most Creative Agencies in 2021. Additionally, they received the 2021 LIA Network Global Network of the Year award.
TBWA
TBWA is an independent advertising agency that specializes in creating advertising campaigns for global brands. It operates as a subsidiary of Omnicom Group and offers a range of services, including advertising, brand strategy, social media marketing, media and public relations, content marketing, and creative strategy.
Established in 1970 and headquartered in New York, the agency has approximately 11,300 team members and reports an annual revenue of around $3 billion. Recent recognitions include being named Fast Company’s Most Innovative Ad Agency in 2022, and they’ve earned a place among Fast Company’s World’s Most Innovative Companies in 2021, 2020, and 2019. Additionally, they were recognized as Adweek’s Global Agency of the Year in 2021 and 2018.
DDB Worldwide
DDB Worldwide is a marketing communications network that’s part of Omnicom Group, Inc. They are known for their creative and unexpected approach. Their capabilities encompass strategic planning, research, account and project management, creative strategy, design, and multimedia production. Established in 1949 and based in New York, they have around 11,000 team members and an annual revenue of approximately $3 billion. Recent achievements include being named the D&AD 2021 Network of the Year, the ADC Annual Awards 2021 Network of the Year, and winning five Gold ANDY Awards in 2021.
McCann Worldgroup
McCann Worldgroup is a prominent global marketing services company with an extensive network of advertising agencies in more than 120 countries. They offer a wide range of services, including advertising, media planning, retail and commerce marketing, PR, influencer marketing, integrated marketing, technology consulting, and more.
Established in 1930 and headquartered in New York, they have about 10,000 team members and an annual revenue of approximately $2 billion. Recent recognitions include being named ACHAP Festival’s Agency of the Year in 2021, the 2021 Epica Awards Agency Network of the Year, and The One Show’s 2021 #1 Network of the Year.
Epsilon
Epsilon is a global marketing services provider that focuses on “outcome-based marketing,” and it operates under its parent company, Publicis Groupe. They offer various services such as data intelligence, customer insights, digital advertising, media planning and buying, digital business transformation, and strategic consulting.
Established in 1969 and headquartered in Irvine, Texas, they have around 8,000 team members and report an annual revenue of approximately $2 billion. Notable recent achievements include winning Media Post’s Best in Show award in 2021, being the highest-ranked agency in “The Forrester Wave™ Customer Database and Engagement Agencies, Q1 2021,” and receiving the 2021 AdExchanger Awards for Best Demand Side Technology.
Starcom
Starcom is a renowned media communications agency that leverages media, technology, and data to deliver effective marketing strategies. It operates within Publicis Media, a division of Publicis Groupe. Starcom’s diverse capabilities include media planning and buying, search engine marketing, social media marketing, mobile marketing, martech architecture, data governance, business analytics, influencer marketing, eCommerce, and shopper marketing, among others.
Established in 2000 and headquartered in Chicago, Starcom is one of the leading digital marketing agencies in the United States. They have a team of about 7,000 members and generate an annual revenue of around $2 billion. Recent accolades include being named the AlconU Marketing Awards 2021 Agency of the Year, winning three awards at the 2021 Internationalist Awards for Innovative Digital Marketing Solutions, and securing the top spot in the WARC Media 100 as the #1 Agency in the World in 2020. Starcom also has offices in Canada, further expanding its reach and impact in the digital marketing industry.
Conclusion
To sum up, the marketing agency industry in the United States is highly competitive, with a vast number of agencies catering to various clients and industries. The net profit margin of a marketing agency can vary, but it is generally a profitable business. The value of a marketing agency depends on factors such as revenue, client base, and reputation.
Looking ahead, researchers anticipate substantial growth in the marketing agency industry by 2024 and 2025. With the increasing prominence of social media platforms, many marketing agencies are discovering new clients and expanding their reach through these channels.
In terms of the best multi-billion dollar marketing agencies, names like Publicis Worldwide, OMD Worldwide, VMLY&R, Mindshare, BBDO Worldwide, Ogilvy, TBWA, DDB Worldwide, McCann Worldgroup, Epsilon, and Starcom stand out for their expertise and success in the industry.
Whether you are an aspiring marketer or a business owner looking for marketing services, the diverse landscape of marketing agencies in the US offers a wide range of options to choose from.