US advertising sector hits record job high—but some major holding companies drop their 2023 outlooks

The news: In the US advertising and public relations sector, total employment rose by 1,000 jobs in July, reaching 497,200—the highest level since 2001, as reported by the Bureau of Labor Statistics (BLS).

• US ad agency employment recorded an all-time high of 231,700 jobs in June, an increase of 1,900 from May.
• Media employment—which includes streaming services, social networks, and other media content providers—fell to 232,500 jobs in June, a decrease of 800 jobs from May. (Reporting for subcategories is delayed one month after top-level BLS data).

Yes, but: While July marked the 31st consecutive month of overall job growth in the US, the job increases in July (187,000) and June (185,000) were the lowest since January 2021.

• Advertising and public relations growth slowed from previous months, with 1,300 jobs added in June and 1,800 jobs added in May.

Furthermore: Just because agency hiring remains robust doesn’t mean all agencies are doing well.

• Advertising giant WPP’s shares fell up to 8% on Friday—their steepest drop in a year. The UK-based firm cited dwindling US revenues from its tech clientele, which led to the company slashing its annual revenue growth outlook down to 1.5% to 3% from 3% to 5%.
• WPP competitor Omnicom Group missed analysts' revenue forecast in its July earnings report, saying tech and telecom firms hit the brakes on their ad spend. Interpublic Group also cut its outlook.
• Publicis Groupe, by contrast, seems to have bucked the trend, surpassing estimates and upping its 2023 outlook. The company's strategy has been to prioritize investments in higher-margin data services over creative tools, mainly catering to European clients.

Our take: Despite a broader economic slowdown, the advertising and PR sector is demonstrating resilience with continued growth, albeit at a slower pace.

• While the data is inconclusive, the fact that some major holding companies are suffering at a time when agency jobs are at an all-time high could mean that smaller, independent agencies are faring better than large incumbents.
• The peak in ad agency employment suggests robust demand within this segment, contributing significantly to the broader sector's performance.
• The overall picture is complex, and it remains to be seen whether the advertising and PR sector can sustain its growth in the coming months.