Revenue for U.S. marketing-communications agencies jumped 8.8% to $28.2 billion in 2006, the strongest growth since ad spending began to rebound from recession in 2002.
The hot growth came from marketing services, fueled by digital. Traditional ad agencies, grappling with a shift from old media, saw tepid growth.
In 2006, U.S. agencies collectively generated less than half of their revenue -- 46.4% -- from traditional advertising and media planning/buying, with the rest coming from a range of marketing services including digital/interactive, direct marketing, sales promotion, health care and PR. Marketing services grabbed 53.6% of U.S. marketing-communications agency revenue. That was up from 51.5% in 2005, the first year that marketing services topped advertising/media.
What's behind the change? No surprise: the internet. U.S. interactive-agency revenue rocketed 23.1%, driving the increase in marketing services. But digital is more than interactive shops; it's an integral part of marketing services from direct to promotion. "Interactive is huge," says Chris Weil, chairman-CEO of Momentum Worldwide, a promotions agency owned by Interpublic Group of Cos. "If anybody in marketing is not a big part of interactive, they won't be around much longer."
Traditional advertising under pressure. The 4.2% U.S. revenue growth for traditional advertising/media agencies roughly tracks with ad spending: U.S. measured spending on traditional media last year grew a soft 3.2%, according to TNS Media Intelligence data.
Submitted by aki - 2007-04-30 06:48:40
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