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Belch: Advertising and
Promotion, Sixth Edition
II. Integrated Marketing
Program Situation Analysis
3. Organizing for
Advertising & Promotion
© The McGraw−Hill
Companies, 2003
Many major companies use an advertising agency to assist them in
developing, preparing, and executing their promotional programs. An
ad agency is a service organization that specializes in planning and
executing advertising programs for its clients. Over 13,000 U.S. and international agencies
are listed in the Standard Directory of Advertising Agencies (the “Red Book”);
however, most are individually owned small businesses employing fewer than five people.
The U.S. ad agency business is highly concentrated. Nearly two-thirds of the
domestic billings (the amount of client money agencies spend on media purchases and
other equivalent activities) are handled by the top 500 agencies. In fact, just 10 U.S.
agencies handle nearly 30 percent of the total volume of business done by the top 500
agencies in the United States. The top agencies also have foreign operations that generate
substantial billings and income. The top 25 agencies, ranked by their U.S. gross
incomes, are listed in Figure 3-6. The table shows that the advertising business is also
geographically concentrated, with 20 of the top 25 agencies headquartered in New York
City or the surrounding area. Nearly 40 percent of U.S. agency business is handled by
New York–based agencies. Other leading advertising centers in the United States
include Boston, Chicago, Los Angeles, Detroit, San Francisco, and Minneapolis. 10
Advertising Agencies
During the late 1980s and into the 90s, the advertising industry underwent major
changes as large agencies merged with or acquired other agencies and support organizations
to form large advertising organizations, or superagencies. These superagencies
Gross Income
Rank Agency Headquarters (Millions)
1 Grey Worldwide New York $581.0
2 J. Walter Thompson New York 565.5
3 McCann-Erickson Worldwide New York 528.1
4 Leo Burnett Worldwide Chicago 472.1
5 BBDO Worldwide New York 458.9
6 Y&R Advertising New York 432.2
7 DDB Worldwide Communications New York 428.9
8 Euro RSCG Worldwide New York 418.2
9 Ogilvy & Mather Worldwide New York 384.8
10 Foote, Cone & Belding Worldwide New York 376.3
11 D’Arcy Masius Benton & Bowles New York 316.8
12 TMP Worldwide New York 227.9
13 Campbell-Ewald Warren, MI 214.0
14 TBWA Worldwide New York 206.1
15 Deutsch New York 202.5
16 Arnold Worldwide Boston 193.8
17 CommonHealth Parsippany, N.J. 190.8
18 Lowe & Partners Worldwide New York 184.9
19 Saatchi & Saatchi New York 176.0
20 Bates U.S.A. New York 154.5
21 Publicis U.S.A. New York 139.6
22 Nelson Communications Worldwide New York 131.9
23 Hill, Holliday, Connors, Cosmopulos Boston 125.0
24 Low Healthcare Worldwide Parsippany, N.J. 124.0
25 Campbell Mithun Minneapolis 118.0
Source: Advertising Age, Apr. 22, 2002, p. S-4.
Figure 3-6 Top 25
agencies ranked by U.S.
gross income, 2001
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Chapter Three Organizing for Advertising and Promotion