Valuing an Advertising Agency
Advertising in the United States over the past ten years has witnessed tremendous growth. But, over the past five years, the industry has seen an annualized growth rate of 4.4%, with advertising expenditures decreasing year over year. Such growth is influenced by the rise of technology and the Internet.
Moreover, the rise of social media is projected to account for 61.0% of all internet advertising revenues by 2022, and mobile is forecasted to be close to around 72.0% of online ad revenues. Needless to say, advertising agencies are experiencing an age of unprecedented growth in the U.S. For more information regarding advertising outlook, refer to PwC’s Global Entertainment & Media Outlook.
If you currently own an advertising agency, consider the possibility of selling. Current industry trends point to further growth; however, there are also more parties entering the space due to the lack of barriers to entry. The first step to selling your business is obtaining a business valuation. Whether you are looking to sell or hold on to your company, understanding the market value of your business is important. A valuation specialist will show you a range of values for your business and consult with you on how to increase the value of your business.
Over the past five years, I have provided business valuations for several advertising agencies for various valuation purposes. To give you an idea of each of those engagements, I will list out some of the key factors used in valuing an advertising agency. Keep in mind that the factors listed below are only a guide. Schedule a free consultation with Peak Business Valuation, business appraiser, today!