23% revenue bump keeps Innocean USA tops in OC

OC Firms Surpass $1B in Revenue

Orange County advertising agencies continue to adapt to waves of evolving technology and media platforms as their clients show ongoing demand in the wake of that shift.

The region’s 18 largest agencies reported approximately $1.1 billion in 2022 revenue, up 15% from 2021 according to this week’s Business Journal list.

Last year’s list of companies had reported a 43% revenue jump following a challenging 2020.

The agencies’ OC headcount added up to 1,453 as of February, a 4.1% increase from a year ago. Companywide, the firms reported 1,906 employees.

“It’s about being ahead of the game when it comes to changes in the media marketplace,” Mark Weinfeld, senior vice president and managing director at Innocean USA, told the Business Journal.

The Huntington Beach-based firm topped the list again this year with $377 million in revenue, a 23% jump from the year prior.

Innocean also has the largest workforce in OC with 568 local employees, up 21% in the past year.

Weinfeld credits the agency’s ability to add “companies with great momentum,” to its existing portfolio of clients.

Agency Ingram Micro remains OC’s second largest ad agency with $293 million in revenue for 2022, up 17%.

Costa Mesa-based SCS, formerly Schiefer Chopshop, takes the No. 3 spot with $80.7 million in 2022 revenue, moving up a slot from its ranking last year with 18% growth.

The agency’s jump is due to acquisitions made last year, including Swarm in Atlanta.

Category Change

Many agencies acknowledge an ongoing shift among clients and their choices in advertising avenues.

The format of online television commercials, or connected TV (CTV), proved to be one of the main game changers in the media industry when the pandemic struck.

Agencies such as Channel Bakers and Brandtailers have previously noted that streaming television is the fastest-growing advertising sector over the past few years.

Channel Bakers debuted on this year’s list at No. 10 with 2022 revenue of $18 million. Brandtailers, ranked at No. 16, broke its prior record revenue, reporting $7.5 million in 2022—an 18% increase.

Innocean reported a decline in more traditional media, while a significant portion of its video advertising moves to streaming services.

“The old 30-second commercial used to be the currency of advertising, which has changed tremendously,” Weinfeld said. “The ratings have declined so we have to move where the audiences are.”

“Budgets are moving away from Google and Facebook,” SCS Chief Strategy Officer Jeff Roach told the Business Journal of the move to CTV. He added that new platforms like TikTok have also taken over.

“As consumers move into new areas, the clients are moving as well,” Roach said. “Connected TV has a huge opportunity for local companies with lesser budget.”

“Streaming is where you can buy your media more efficiently and effectively,” Gigasavvy’s Kyle Johnston told the Business Journal. The agency expanded its multimedia offerings through the addition of an in-house content creation studio, Studio4, last year to invest in longform video production.

Gigasavvy reported $13.9 million for 2022 revenue, falling 3.5% from a year prior and ranking No. 11. Johnston also noted that the agency had not lost a single client in the last three years.

Last year, the former IMW Agency merged with marketing firm Bastion Elevate to become a larger media office dubbed Bastion Amplify with IMW’s Chris Bretschger appointed CEO.

Bastion ended 2022 with a 55% increase in revenue to $10.1 million, the largest increase on the list.

Agency Growth

Innocean is known for its work with Hyundai Motor America Inc., Kia Motors America Inc. and Genesis Motor America Inc.

“We’re getting a wider range of assignments from our clients,” Weinfeld said. “We’re looking at much more technology in our offerings to our clients.”

It’s also diversifying its client portfolio, adding the University of Massachusetts Global last year to produce two TV spots for the online school while also starting work with advanced mobility companies like Motional, the developer of driverless vehicles.

“All the resources we’ve added over the years for our automotive clients, we can now offer to other industries,” Weinfeld said.

It said it will announce a new airline client in the next few months.

Gigasavvy reported an increase in demand from the business-to-business segment, which led to the addition of Brea-based hat maker FlexFit to help exclusively with social content. The agency also started working with Morinaga America Inc., the maker of Hi-Chew candy, to launch a new ad campaign in the U.S., as well as homebuilder D.R. Horton. ■