Agency Report: Revenue Slumps 7.5%, Jobs at 16-Year Low

http://adage.com/agencynews/article?article_id=143467

First the good news: The agency business is starting to see at least tepid growth. Analysts expect 2010 combined worldwide revenue for the top four agency companies to rise about 2% on an organic basis, factoring out currency shifts and acquisitions.

Now the bad news: Revenue for U.S. marketing-communications agencies -- advertising, marketing services, media, health care, public relations -- tumbled 7.5% to $28.4 billion in 2009, according to the Ad Age Agency Report.

That's the sharpest revenue decline in the 66 years

U.S. digital agencies eked out a 0.5% revenue gain in 2009, according to the Agency Report. Health-care agency revenue slipped 1.6%. Fortunes sank in every other agency sector.

Revenue for traditional ad agencies dropped 9.3%, mirroring an 8.9% decline last year in U.S. ad agency employment. Media agency revenue plunged 10.3% in a year when U.S. measured media spending (as tracked by WPP's Kantar Media) fell 12.3%.

Revenue for customer-relationship-management/direct-marketing agencies declined 7.4%, outperforming ad agencies as marketers put more emphasis on data-driven marketing.
Promotion-agency revenue tumbled 13.1%, depressed by lower spending on event marketing.