2024 Best Practices Study

Pro Forma Expenses (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

33.4%

39.1%

44.4%

46.6%

48.3%

53.5%

"Non-employees" (1099 Prods/outsourced)

2.0%

3.7%

1.4%

2.7%

2.8%

2.6%

Total Payroll Benefits Payroll Taxes

35.4%

42.8%

45.8%

49.3%

51.1%

56.1%

3.9% 0.8% 2.4% 0.2% 7.4% 0.8% 0.7% 2.0% 3.4% 4.8% 0.4% 3.6% 0.9% 0.2% 0.8% 0.7% 0.5% 1.6% 1.0% 0.0% 0.3% 0.3% 0.2% 0.3% 0.6% 0.4% 1.9% 0.0% 3.1% 64.8% 25.5% 27.5% 42.8% 15.5%

3.3% 1.3% 3.3% 0.2% 8.1% 0.5% 0.6% 1.3% 2.5% 4.2% 0.2% 3.2% 0.6% 0.1% 0.5% 1.1% 0.5% 1.4% 0.9% 0.1% 0.3% 0.4% 0.4% 0.6% 3.1% 0.1% 0.7% 0.6% 5.2% 72.4% 24.4% 28.8% 50.8% 14.0%

3.1% 1.8% 3.0% 0.1% 7.9%

3.3% 1.7% 3.2% 0.1% 8.3%

3.0% 1.3% 3.0% 0.2% 7.5%

3.0% 1.6% 3.5% 0.3% 8.4%

Retirement Insurance

Other

Total Benefits

Total Compensation

53.7%

57.6%

58.6%

64.5%

Selling Travel and Ent./Conventions

1.0% 0.5% 1.3% 2.9% 3.4% 0.2% 3.0% 0.5% 0.1% 0.8% 0.9% 0.4% 1.2% 1.0% 0.1% 0.5% 0.3% 0.4% 0.6% 1.4% 0.2% 0.6% 0.5% 3.3% 72.7% 26.5% 30.0% 12.7%

1.0% 0.5% 1.1% 2.5% 3.7% 0.4% 2.8% 0.4% 0.2% 0.5% 0.8% 0.4% 1.2% 0.7% 0.1% 0.6% 0.3% 0.4% 1.1% 1.3% 0.2% 0.8% 0.3% 3.8% 76.3% 22.5% 24.8% 12.4%

1.1% 0.4% 0.8% 2.3% 3.3% 0.2% 2.8% 0.3% 0.1% 0.3% 0.7% 0.3% 1.0% 0.8% 0.1% 1.4% 0.2% 0.5% 0.4% 2.4% 0.1% 1.1% 0.9% 5.0% 78.0% 21.3% 25.8% 12.2%

1.5% 0.4% 0.9% 2.7% 3.2% 0.2% 2.9% 0.3% 0.1% 0.3% 0.5% 0.3% 0.9% 0.9% 0.1% 1.1% 0.3% 0.4% 0.8% 2.8% 0.1% 2.0% 1.0% 6.7% 85.3% 14.7% 21.4% 11.4%

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

Amortization of Intangibles

Officer Life

Interest

Other

Total Administrative

TOTAL EXPENSES (PRO FORMA)

PRO FORMA PRE-TAX PROFIT/LOSS

PRO FORMA EBITDA 2

1 For firms that own their building and reported a much lower than peer expense load, we have normalized their occupancy expense. 2 Pro Forma EBITDA reflects normalized income and expenses after discretionary owner expenses are eliminated; excludes all administrative expenses.

Cross Category Comparison

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