Advertising agencies are service-type businesses concerned with originating, development and managing advertising for a client. Advertising agencies are autonomous and are thus able to maintain an independent and outside point of view while attempting to sell the customer's services or products. Advertising agencies can also prepare and present all strategies to promote and market brands or products.

Advertising dates back almost to prehistoric times with petroglyphs and cave art boasting about successful hunts, and Egyptian and Greek papyrus documents promoting commercial products or events. Mass advertising—where a large number of people are targeted through advertising agencies campaigns is fairly recent in history. The use of advertising agencies to develop and manage such campaigns was almost unheard of prior to the mid 1800s.

In the United States, the first advertising agency was that of Volney Potter, established in 1843 in the city of Philadelphia. Originally, advertising agencies were just concerned with selling excess newspaper ad space, but by the beginning of the 20th century, they were involved in content of the advertisements as well as distribution. In the UK, R. F. White was one of the first agencies to create its advertisements for clients rather than just buy space.

Typical clients of advertising agencies are corporations, business, non-profit agencies and governmental units. Just as clients come in all sizes, so do advertising agencies, from small one to two person agencies to multinational corporations. The quality of the advertising produced by the agency is not necessarily a reflection of its size. Advertising agencies may provide full range services for the client, or may specialize in a particular field, such as retail advertising, or a particular media, such as print.

Advertising agencies usually are formed with two or more separate groups involved. The creative group, who actually create the ads are the core of the agency. Creative teams often consist of an art director and copywriter reporting to a creative director.

In addition to the creative department, there is another major department within advertising agencies known as creative services. These are the people who actually deal with the suppliers of the creative media. A third department within advertising agencies is the traffic department. The traffic department is responsible for increasing efficiency and profitably through managing workflow, producing cost estimates and sharing information as needed.

It remains to be seen how the changes in advertising due to the influence of the internet, will affect the work done by advertising agencies. It is more than likely, however that advertising agencies will increase in creative force to meet the challenges of the new type of media advertising.