California keeps 42% of U.S. shoots even as the industry shrinks 2%

A new report from ad‑production firm XR Extreme Reach shows that U.S. commercial production fell only 2 % in the first half of 2026, after a 25 % drop between 2019 and 2025. The study—called *Where Ads Are Made*—draws on payroll, delivery, rights‑management data collected by XR since its founding in 2007.

While overall spending on advertising climbed almost 9 % to $1.14 trillion in 2025, the production side has tightened more than a decade ago.

California remains the dominant location for shoots, accounting for 42 % of all U.S. commercial production. The Golden State’s draw keeps it firmly in the lead despite a well‑documented decline in film and television output over recent years.

New York, once the heart of Madison Avenue, has slipped to just 14 % of the market, a 10‑percentage‑point drop since 2019.

Texas now ranks third, contributing 6.5 % of production and experiencing a 16 % surge in volume during the past year. Florida, Illinois and Georgia each hold between three and six percent of the national share.

New Jersey’s aggressive tax incentives have spurred a near quintupled rise in voice‑over work since 2019, but its overall market share stays below one percent.

## Background & Context

XR’s *Where Ads Are Made* study compiled data from the firm’s handling of payroll, delivery and rights management for clients across the country. The firm had been in business since 2007, giving it a long‑term view of industry trends.

The analysis highlighted that global advertising spending has steadily increased, with an estimated $1.14 trillion spent in 2025 .

Celebrity endorsements have become a key driver of that growth. XR projects celebrity payments to reach $1.3 billion in 2026, while total commercial‑talent payouts—including scale actors, influencers and celebrities—are expected to hit $2.06 billion, a rise of almost 70 % from 2020.

## What People Are Saying

Frank DeVito, president and COO of XR’s payroll subsidiary, told that “More celebrities are appearing in ads than ever before.” He added that the industry is shifting from long‑term brand loyalty to multi‑brand endorsements.

“It’s really interesting that unlike in the past, when celebrities would tend to stick to one brand as a trusted source, you’re now seeing celebrities supporting multiple brands,” DeVito said.

Graham McKenna, XR’s chief marketing officer, dismissed concerns that artificial intelligence would curtail production volume. “Everyone sort of wants AI to be the bogeyman,” he said.

“It’s not showing up in our data yet.” He also noted that California’s resilience surprised analysts, while New Jersey’s tax incentives explain the surge in voice‑over work but not a top‑ten market share. McKenna said proximity to New York and creative agencies makes it easy for crews to cross into Jersey for shooting or post‑production.

## What Happens Next

Industry observers expect the 2026 advertising season to continue reflecting California’s dominance, with the state still expected to hold the largest share of production volume. Celebrity remuneration is projected to climb, and overall talent payments are forecasted to approach $2 billion as brands expand their social‑media reach.

Meanwhile, AI’s influence may become more pronounced in post‑production workflows, but XR’s data indicates it has yet to alter shooting schedules or location decisions.

With production volumes holding steady and California solidifying its status as the advertising epicenter, the industry faces a paradox: while film and television output wanes elsewhere, brands are investing more heavily in celebrity‑driven campaigns.

The next few months will reveal whether this trend persists or yields to new technological disruptions.