Annual Survey of Advertising and Related Services

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The advertising and related services industry soared to new heights in 2005, recording the largest revenue growth rate in recent memory. National operating revenues increased by 12.6%, as advertising businesses benefited from the red hot western economy and generally strong economic conditions.

Firms in the advertising and related services industry earned operating revenues of $5.6 billion in 2005. The large national growth was powered by Alberta and British Columbia, where the industry's revenues soared by nearly 25%. Ontario posted a strong year as well with 13.8% growth. For the third year in a row, Quebec's growth (+4.7%) was less than the national rate but revenue increases in each of the past two years suggest that the negative effect of the Gomery Inquiry is diminishing.

Advertising agencies, which account for 45% of total industry operating revenues, earned $2.5 billion in 2005, an increase of 14.8% over 2004. Operating revenues of the remaining specialized advertising industries, such as public relations, display advertisers and flyer distributors, were up a combined 10.8% to $3.1 billion.

Operating profit margins for advertising agencies fell from 10.2% to 9.1% between 2004 and 2005, due to a large increase in salary expenditures. Alberta and British Columbia recorded the largest growth in salary expenditures (46% and 51% respectively). Businesses classified to the remaining advertising industries posted operating profit margin gains, rising from 6.8% in 2004 to 7.9% in 2005.

There were 11,776 advertising and related services establishments in 2005, little changed from the previous year. Advertising agencies accounted for 5,247 of these establishments.

Despite rapid expansion in the West, the bulk of industry revenues were generated in Ontario (58%) followed by Quebec (24%), British Columbia (8%) and Alberta (6%).

Revenues from government clients rose 1.8% after two years of decreases but still remained 8.3% below the 2000 level. Foreign sales have doubled since 2000 and now account for 9.2% of operating revenues, up from 6.2% the previous year.

Results from the 2005 Annual Survey of Advertising and Related Services are now available.

These data provide information on the industry's revenue, expenditures, salaries and wages, profit margin, and the distributions of revenue earned by type of service and client base.

Data for 2004 have been revised to reflect more accurate coverage of the target population for this industry.

Note: This survey covers establishments classified as Advertising and Related Services (5418) according to the North American Industry Classification System (NAICS) during the reference year.

It comprises establishments primarily engaged in: creating mass-media advertising or public relation campaigns; placing advertising in media for advertisers or advertising agencies; selling media time or space to advertisers or advertising agencies for media owners; creating and implementing indoor or outdoor display advertising campaigns; creating and implementing direct mail advertising campaigns; delivering (except by mail) advertising materials or samples; creating and implementing specialty advertising campaigns; providing related services, such as sign painting and lettering, welcoming services and window trimming services.

This industry does not include advertising sales by newspapers, magazines, radio, television or internet, which accounts for the majority of the difference between results of this survey and calculations of total advertising spending in the Canadian economy.

Available on CANSIM: table 360-0003.

Definitions, data sources and methods: survey number 2437.

For additional information and to enquire about concepts, methods or data quality of this release, contact Paul McDonald (613-951-0665; paul.mcdonald@statcan.gc.ca), Service Industries Division.