Amid Film & TV Squeeze, California Still Dominates Advertising Shoots As Celebrity Pay Soars, Study Finds

EXCLUSIVE: After a 25% decline between 2019 and 2025, the volume of commercial production dipped just 2% in the first six months of 2026, according to a new study by ad firm XR Extreme Reach.

One big reason for that stability trend: California and its enduring draw for celebrities.

The Golden State has suffered well-documented losses of film and TV production in recent years, but it remains the dominant home for advertising shoots, accounting for 42% of the total, XR found. The picture is far gloomier in New York, longtime home of Madison Avenue, where production has fallen 10 percentage points since 2019 to give the state just 14% of the U.S. market.

The No. 3 state is now Texas, with 6.5% of production, with a 16% surge in volume in the past year alone. Florida, Illinois and Georgia control between 3% and 6% apiece.

XR based its study, Where Ads Are Made, on data it gets from its handling payroll, delivery, rights management and other aspects of commercial production for clients. The firm was founded in 2007.

Globally, overall spending on advertising has been on the rise after some belt tightening earlier this decade. In 2025, it rose nearly 9% to $1.14 trillion, according to an estimate by WPP Media. One component of that growth is celebrity endorsements, which have become de rigeur for many advertisers given the amplification potential across social media and popular culture.

Celebrity payments, according to XR, will reach $1.3 billion in 2026. Overall commercial talent payments, including scale actors, influencers, and celebrities, are expected to hit $2.06 billion, up nearly 70% from 2020.

“More celebrities are appearing in ads than ever before,” Frank DeVito, the president and COO of XR’s payroll subsidiary told Deadline in an interview. “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.”

The rise of artificial intelligence has been expected to dramatically reshape advertising, among many other industrial sectors. While AI is widely used in post-production, it has not taken a bite out of production volume, according to Graham McKenna, chief marketing officer of XR.

“Everyone sort of wants AI to be the bogeyman,” McKenna said in an interview. “It’s not showing up in our data yet.”

McKenna said California’s resilience came as a surprise. As to New York’s decline, he said the ambitions of neighboring New Jersey are one of the main culprits. With aggressive state tax incentives spurring investments in production infrastructure, voiceover work has nearly quintupled in the Garden State since 2019, XR found. Overall, New Jersey did not crack the top eight in XR’s state rankings, meaning it is below 1% market share.

“There is a proximity to New York and to creative agencies, big holdcos and talent,” McKenna said. “It’s not too hard to get across the bridge to go shoot or do voiceover work or post work in Jersey. I think it just comes down to economics.”