The current failure rate for new businesses is 28.67% but the prospects for advertising agencies are slightly worse, with 34% closing in the first five years. In this article, we explore the best and worst cities to open an advertising agency.

The Worst Cities to Open an Advertising Agency

If you want to have a thriving agency, location is a key consideration. After all, where your company is based can influence your operational costs, client acquisition and even growth opportunities. Here are the cities where advertising agencies have less than favourable prospects.

1. Sunderland

Sunderland has the highest failure rate, with just over half of the new advertising agencies having closed their doors (51.85%). Out of the 54 companies that opened in the last 5 years, 28 have closed.

2. Plymouth

Plymouth ranks as the second-worst city to open an advertising company, with 50.87% of new agencies that launched going into administration, liquidating, or dissolving.

3. Crawley

Crawley takes the third spot, with an agency mortality rate of 50%.

The Best Cities For New Advertising Agency

On the opposite end of the scale, agencies in some cities have more favourable odds. Here are the top three cities where new advertising agencies are thriving.

1. Southampton

Southampton has been crowned as the best city for new advertising agencies, with a success rate of 80.33%.

2. Newport

Newport ranks as the city with the second most successful new advertising agencies at 77.97%. In the last five years, 59 agencies have opened in the city and only 13 have closed.

3. Norwich

Norwich rounds off the top 3, with a business survival rate of 73.53%.

Key Takeaway

Our research suggests that there is a clear link between location and the success rate of new advertising agencies. If you want your agency to thrive, you need to think long and hard about where you set up shop.

Methodology

Avid Panda (avidpanda.com) analysed data from Companies House to find the number of businesses registered under the SIC code 73110 for advertising agencies in the UK’s 50 most populated cities (excluding London boroughs). The team looked at companies that were incorporated between January 2019 and December 2023 and compared that to the number that have gone into administration, liquidation, or are now dissolved.

Full Dataset

Rank	City	Number of HR Firms Closed	Number of HR Firms Opened	Percentage Closed
1	Sunderland	28	54	51.85185185
2	Plymouth	30	59	50.84745763
3	Crawley	23	46	50
4	Portsmouth	28	58	48.27586207
5	Walsall	34	71	47.88732394
6	Aberdeen	27	61	44.26229508
7	Bournemouth	63	148	42.56756757
8	Bradford	77	183	42.07650273
9	Dudley	17	41	41.46341463
10	Blackpool	38	93	40.86021505
11	Leicester	119	294	40.47619048
12	Slough	70	173	40.46242775
13	Sheffield	102	256	39.84375
14	Wigan	26	66	39.39393939
15	Cardiff	430	1120	38.39285714
16	Milton Keynes	66	172	38.37209302
17	Reading	59	154	38.31168831
18	Coventry	78	204	38.23529412
19	Preston	68	180	37.77777778
20	Stoke-on-Trent	28	76	36.84210526
21	Luton	54	147	36.73469388
22	Leeds	153	422	36.25592417
23	Newcastle upon Tyne	63	177	35.59322034
24	Nottingham	100	281	35.58718861
25	Kingston upon Hull	34	96	35.41666667
26	Peterborough	43	122	35.24590164
27	Manchester	449	1276	35.18808777
28	Glasgow	169	483	34.98964803
29	Birmingham	262	749	34.9799733
30	Derby	51	146	34.93150685
31	Edinburgh	95	274	34.67153285
32	Mansfield	13	38	34.21052632
33	London	3303	9889	33.40074831
34	Birkenhead	9	27	33.33333333
35	Liverpool	124	379	32.7176781
36	Northampton	52	160	32.5
37	Warrington	48	151	31.78807947
38	Swansea	19	60	31.66666667
39	Cambridge	35	114	30.70175439
40	Swindon	22	73	30.1369863
41	Oxford	30	100	30
42	Bristol	110	375	29.33333333
43	Doncaster	26	91	28.57142857
44	Belfast	38	133	28.57142857
45	Southend-on-Sea	13	46	28.26086957
46	Ipswich	26	93	27.95698925
47	Wolverhampton	26	94	27.65957447
48	Norwich	45	170	26.47058824
49	Newport	13	59	22.03389831
50	Southampton	71	361	19.66759003

If you have any questions about our findings or methodology, get in touch with lance@avidpanda.com.