2021 Best Practices Study

Cross Category Comparison

Detailed Data for All Revenue Categories

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

Payrol l Employees

39.5%

42.0%

43.1%

47.2%

51.2%

54.5%

"Non-employees" (1099 Prods/outsourced)

4.1%

2.1%

5.1%

3.1%

1.9%

1.3%

Total Payroll Benefi ts Payrol l Taxes

43.6%

44.1%

48.2%

50.3%

53.2%

55.8%

3.2% 0.8% 2.4% 0.3% 6.6% 0.4% 0.6% 2.6% 3.6% 5.7% 0.3% 3.9% 0.8% 0.2% 1.4% 1.5% 0.5% 1.5% 1.4% 0.1% 0.5% 0.7% 0.1% 1.0% 0.1% 0.0% 0.0% 0.0% 1.1%

3.5% 1.2% 3.1% 0.1% 7.9% 0.6% 0.8% 1.7% 3.1% 4.4% 0.3% 3.0% 0.6% 0.2% 0.6% 1.0% 0.2% 1.4% 0.8% 0.1% 0.6% 0.3% 0.8% 1.3% 0.0% 0.0% 0.0% 0.0% 1.3%

3.0% 2.1% 3.5% 0.1% 8.7% 0.7% 0.7% 1.2% 2.5% 4.1% 0.4% 2.8% 0.6% 0.2% 0.8% 0.8% 0.4% 1.2% 0.9% 0.1% 0.6% 0.3% 0.0% 0.8% 0.0% 0.0% 0.0% 0.0% 0.8%

3.2% 1.4% 3.2% 0.2% 8.0% 0.5% 0.4% 1.0% 1.9% 3.9% 0.3% 2.7% 0.5% 0.2% 0.5% 0.8% 0.4% 1.2% 0.9% 0.1% 0.7% 0.2% 0.0% 0.6% 0.0% 0.0% 0.0% 0.0% 0.6%

2.9% 1.8% 3.4% 0.1% 8.2% 0.8% 0.4% 0.8% 2.0% 3.9% 0.4% 2.5% 0.5% 0.2% 0.5% 0.9% 0.4% 1.0% 0.9% 0.1% 1.4% 0.3% 0.1% 0.8% 0.0% 0.0% 0.0% 0.0% 0.8%

3.1% 2.0% 3.7% 0.2% 9.0% 1.0% 0.5% 0.7% 2.2% 3.4% 0.2% 2.5% 0.4% 0.2% 0.3% 0.7% 0.3% 1.0% 1.2% 0.1% 1.3% 0.3% 0.2% 1.0% 0.0% 0.0% 0.0% 0.0% 1.0%

Reti rement Insurance

Other

Total Benefits

Total Compensation

50.2%

52.0%

56.9%

58.3%

61.4%

64.8%

Sel l ing Travel and Ent./Conventions

Automobi le Expense Advertising/Promotions

Total Selling

Operating Occupancy Expenses 1

Office Equipment Expenses

IT Expenses Telephone

Postage

Suppl ies/Printing

Dues/Subscriptions/Contributions

Taxes/Licenses

Insurance

Professional Fees

Bad Debts

Outside Services Education/Training

Miscel laneous Total Operating Administrative Depreciation

18.1%

14.2%

13.0%

12.3%

12.9%

11.9%

Amortization of Intangibles

Officer Li fe

Interest

Other

Total Administrative

TOTAL EXPENSES (PRO FORMA)

73.0%

70.6%

73.3%

73.2%

77.1%

79.9%

PRO FORMA PRE-TAX PROFIT/LOSS

27.0%

29.4%

26.7%

26.8%

22.9%

20.1%

PRO FORMA EBITDA 2

28.1%

30.7%

27.5%

27.5%

23.7%

21.1%

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. Also excludes all administrative expenses.

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