2020 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

38.4%

43.8%

45.5%

47.0%

51.9%

54.0%

"Non-employees" (1099 Prods/outsourced)

2.7%

3.4%

2.7%

3.1%

1.7%

1.7%

Total Payroll Benefits Payroll Taxes

41.0%

47.2%

48.2%

50.1%

53.7%

55.7%

3.0% 0.8% 2.4% 0.3% 6.5% 1.0% 0.8% 2.5% 4.2% 5.0% 0.3% 3.5% 0.9% 0.2% 1.2% 1.3% 0.5% 1.6% 1.0% 0.0% 0.3% 0.4% 0.2% 1.1% 0.0% 0.0% 0.0% 0.0% 1.1%

3.3% 1.2% 3.2% 0.1% 7.8% 1.1% 0.9% 1.5% 3.5% 4.7% 0.6% 2.9% 0.6% 0.2% 0.8% 0.9% 0.3% 1.3% 0.7% 0.0% 1.0% 0.4% 0.6% 0.6% 0.0% 0.0% 0.0% 0.0% 0.6%

3.0% 1.9% 3.7% 0.1% 8.8% 1.2% 0.6% 1.1% 2.9% 4.0% 0.3% 2.7% 0.6% 0.2% 0.8% 0.8% 0.4% 1.2% 0.8% 0.1% 0.4% 0.4% 0.2% 1.0% 0.0% 0.0% 0.0% 0.0% 1.0%

3.1% 1.5% 3.4% 0.2% 8.1% 1.2% 0.5% 1.3% 3.1% 4.0% 0.4% 2.4% 0.5% 0.2% 0.6% 0.9% 0.3% 1.2% 0.8% 0.1% 0.7% 0.3% 0.3% 0.7% 0.0% 0.0% 0.0% 0.0% 0.6%

3.0% 1.8% 3.2% 0.1% 8.2% 1.4% 0.4% 0.8% 2.6% 3.8% 0.3% 2.6% 0.5% 0.2% 0.5% 0.9% 0.3% 1.1% 0.8% 0.1% 1.4% 0.3% 0.2% 1.0% 0.0% 0.0% 0.0% 0.0% 1.0%

3.1% 2.0% 3.7% 0.2% 9.1% 2.1% 0.6% 0.9% 3.6% 3.5% 0.4% 2.2% 0.5% 0.2% 0.4% 0.7% 0.4% 1.1% 1.1% 0.1% 1.3% 0.4% 0.3% 1.0% 0.0% 0.0% 0.0% 0.0% 1.0%

Retirement Insurance

Other

Total Benefits

Total Compensation

47.5%

55.0%

57.0%

58.2%

61.8%

64.8%

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

16.4%

15.1%

12.9%

12.6%

12.8%

12.3%

Amortization of Intangibles

Officer Life

Interest

Other

Total Administrative

TOTAL EXPENSES (PRO FORMA)

69.2%

74.1%

73.8%

74.9%

78.3%

81.7%

PRO FORMA PRE-TAX PROFIT/LOSS

30.8%

25.9%

26.2%

25.1%

21.7%

18.3%

PRO FORMA EBITDA 2

31.9%

26.4%

27.2%

25.8%

22.7%

19.3%

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

 60