2019 Best Practices Study

(expressed as a percentage of pro forma net revenues)

AGENCIES WITH REVENUES OF:

<$1.25M $1.25-$2.5M $2.5-$5M $5-$10M $10-$25M >$25M

Compensation

Payroll Employees

39.1%

40.1%

44.9%

47.9%

52.2%

53.0%

"Non-employees" (1099 Prods/outsourced)

3.3%

5.2%

3.0%

2.5%

1.3%

1.9%

Total Payroll Benefits Payroll Taxes

42.4%

45.3%

47.9%

50.4%

53.5%

54.9%

2.8% 0.7% 2.7% 0.3% 6.7% 1.2% 0.9% 2.4% 4.5% 5.4% 0.4% 2.8% 0.9% 0.3% 1.1% 1.1% 0.3% 1.7% 1.0% 0.0% 0.3% 0.5% 0.3% 1.2% 0.0% 0.0% 0.0% 0.0% 1.3%

3.2% 1.0% 2.5% 0.2% 6.9% 1.2% 0.7% 1.7% 3.6% 4.7% 0.3% 2.5% 0.7% 0.2% 0.7% 1.0% 0.4% 1.2% 0.8% 0.0% 0.4% 0.4% 1.0% 0.7% 0.0% 0.0% 0.0% 0.0% 0.7%

3.1% 2.1% 3.7% 0.1% 9.0% 1.2% 0.7% 1.2% 3.0% 3.9% 0.4% 2.5% 0.6% 0.3% 0.9% 1.0% 0.4% 1.3% 0.8% 0.1% 0.5% 0.3% 0.1% 1.0% 0.0% 0.0% 0.0% 0.0% 1.0%

2.9% 1.5% 3.3% 0.2% 7.8% 1.2% 0.6% 1.1% 2.9% 3.8% 0.5% 2.3% 0.5% 0.2% 0.6% 0.7% 0.3% 1.2% 0.8% 0.1% 0.7% 0.3% 0.4% 0.7% 0.0% 0.0% 0.0% 0.0% 0.7%

3.0% 1.8% 3.2% 0.2% 8.2% 1.2% 0.6% 0.9% 2.6% 3.7% 0.3% 2.1% 0.4% 0.2% 0.5% 0.7% 0.4% 1.1% 0.7% 0.1% 1.5% 0.3% 0.1% 1.3% 0.0% 0.0% 0.0% 0.0% 1.3%

3.0% 2.1% 3.6% 0.2% 8.9% 2.0% 0.5% 1.2% 3.7% 3.5% 0.4% 2.0% 0.5% 0.2% 0.5% 0.7% 0.3% 1.0% 1.2% 0.1% 1.3% 0.4% 0.3% 1.0% 0.0% 0.0% 0.0% 0.0% 1.1%

Retirement Insurance

Other

Total Benefits

Total Compensation

49.0%

52.2%

56.9%

58.3%

61.7%

63.9%

Selling Travel and Ent./Conventions

Automobile Expense Advertising/Promotions

Total Selling

Operating Occupancy Expenses 1

Office Equipment Expenses

IT Expenses Telephone

Postage

Supplies/Printing

Dues/Subscriptions/Contributions

Taxes/Licenses

Insurance

Professional Fees

Bad Debts

Outside Services Education/Training

Miscellaneous Total Operating Administrative Depreciation

16.3%

14.5%

13.1%

12.4%

12.1%

12.1%

Amortization of Intangibles

Officer Life

Interest

Other

Total Administrative

TOTAL EXPENSES (PRO FORMA)

71.1%

71.1%

74.0%

74.3%

77.8%

80.8%

PRO FORMA PRE-TAX PROFIT/LOSS

28.9%

28.9%

26.0%

25.7%

22.2%

19.2%

PRO FORMA EBITDA 2

30.2%

29.6%

27.0%

26.4%

23.5%

20.3%

1 For firms that own their building and reported a much lower than peer expense load, we have normalized their occupancy expense.

 64