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Industry Insight Report: Advertising & PR Agencies Q2-2025

Advertising & PR Industry Insight Report Cover

The advertising and public relations industry finds itself at a crossroads this quarter, with major players moving in dramatically different directions and macroeconomic shifts reshaping client behavior. While overall industry growth remains healthy, the divide between traditional agency models and data-driven, AI-augmented firms continues to widen—impacting client retention, hiring trends, and investor confidence.

Key Trends This Quarter

  • Leadership Shakeups Signal Strategic Pivoting
    Industry heavyweight WPP has announced it will part ways with long-time CEO Mark Read after years of declining market share and major client losses, including Coca-Cola and Starbucks. Meanwhile, competitor Publicis has surged ahead, becoming the largest ad agency globally by embracing AI, e-commerce, and data analytics faster than its peers.

  • Tech Giants Disrupting the Agency Model
    Platforms like Google are increasing their foothold in creative ad services through AI tools, allowing brands to bypass traditional agencies entirely. This direct competition—combined with tighter ad budgets caused by inflation and tariff-related cost pressures—is forcing agencies to prove their value beyond media buying.

  • Stagnant Labor Metrics and Slower Wage Growth
    Employment in the sector declined by 2% year-over-year as of May, with long-term growth trends lagging behind the broader private sector. While average hourly wages rose slightly to $37.07, this growth remains below inflation and significantly behind other private-sector benchmarks. These trends suggest a cautious hiring environment and pressure to do more with leaner teams.

Market Outlook

Despite internal disruptions, the long-term outlook for advertising and PR agencies remains cautiously optimistic. The industry is projected to grow at a 4.35% compound annual rate from 2025 to 2029, keeping pace with the broader U.S. economy. Agencies that successfully integrate AI, automation, and first-party data strategies are expected to capture the lion’s share of future growth, especially as clients demand more measurable ROI.

For Business Owners Considering Exit

If you own an independent agency that’s been impacted by client consolidation, AI adoption, or margin compression, now may be an ideal time to explore your strategic options. Buyers are still active in the sector, particularly for niche agencies with strong client relationships or specialized vertical expertise.

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  • Lion Business Advisors’ quarterly industry insights incorporate data and trends sourced from internal deal flow and buyer activity, Vertical IQ, and market comparables from platforms such as Axial and BVR (Business Valuation Resources).