More companies will look to digital advertising as internet traffic volume increases
Los Angeles, CA (PRWEB) May 16, 2013
The Digital Advertising Agencies industry has enjoyed strong growth from an improving economy and new trends in online media. Over the past five years, industry revenue increased at an average annual rate of 6.3% to $12.6 billion in 2013. The recovering economy and labor market over the past five years have provided consumers with buying power and businesses with higher profit, allowing them to invest in future growth through digital advertising. “Consumers are switching from newspapers, magazines, radio and TV to online news outlets, websites, podcasts and video streaming services, providing an opportunity for digital advertising agencies to promote products and services online,” says IBISWorld industry analyst Andrew Krabeepetcharat. The improving economy and growth in online platforms are expected to increase industry revenue 8.6% in 2013 alone.
Market share concentration is expected to be low in the Digital Advertising Agencies industry, but over the past five years it has increased due primarily to the growing demand for digital advertising. As a result, multinational players quickly ramped up their digital advertising operations whether by acquiring smaller companies or developing partnerships. “Over the past five years, both the level of M&A activity within the industry and the number of establishments increased,” Krabeepetcharat, “which suggests that while larger players were acquiring smaller companies, the industry's considerable growth over the period prompted many more start-ups.” For example, industry player Pereira & O'Dell entered the industry in 2008, and although it is relatively small, it has grown considerably over the period and even expanded internationally. Current industry leaders include Publicis Groupe SA, WPP PLC and The Interpublic Group of Companies Inc.
As internet traffic volume increases over the next five years, more companies will want to expose their businesses to consumers through online media. Social media outlets, such as Facebook and Twitter, have paved the way for new methods of advertising that allow users to spread the word instead of the businesses directly targeting the consumers. Streaming video and music services, like YouTube and Spotify, have also provided new ways for businesses to reach potential customers through online ads. As internet use increases, more businesses are expected to seek the expertise of digital advertising agencies to develop marketing materials.
Over the next five years, industry revenue is forecast to continue growing. Corporate profit and the consumer sentiment index are projected to increase over the next five years, increasing the demand for digital advertising. Growing popularity in online media streaming services and social media are expected to continue and increase the percentage of digital advertising in total advertising expenditure. For more information, visit IBISWorld’s Digital Advertising Agencies in the US industry report page.
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IBISWorld industry Report Key Topics
Businesses in this industry create advertising campaigns and place the advertisements across digital media outlets. Through in-house capabilities or subcontracting, the agencies provide advice, creative services, account management, production of advertising material, media planning and buying.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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