Advertising Agencies in Australia Industry Market Research Report Now Updated by IBISWorld

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Media fragmentation driven by digital and new media has changed the face of advertising and marketing. For this reason, industry research firm IBISWorld has updated its report on the Advertising Agencies industry in Australia.

IBISWorld Market Research

IBISWorld Market Research

Rapid changes to digital and new media are leading to shifts in advertising agency structure.

The Advertising Agencies industry is sensitive to changes in economic conditions, which affect the level of advertising and promotional spending by clients. In the five years through 2013-14, the relatively high cost of main media advertising and fragmentation of consumer media viewing habits have prompted clients to include a greater proportion of below-the-line communication in marketing campaigns, negatively affecting the industry. Media fragmentation has been driven by the emergence of digital and new media, including web-enabled smartphones and tablets; faster and cheaper internet connections; iPods and podcasts; pay TV; new free-to-air TV channels; and social networking websites, such as Twitter, Facebook and YouTube. IBISWorld industry analyst Alen Allday states “this is providing a challenging and fragmented media environment for advertising agencies to operate in and causing many agencies to reinvent themselves by moving away from their traditional roles.” For example, all of the major industry players are now diversified marketing communications holding companies after acquiring complementary businesses, such as public relations agencies, market research firms, digital advertising agencies and web developers.

IBISWorld forecasts the industry to generate revenue of $1.3 billion in 2013-14, which is an increase of 1.9% from the previous year. This will come on the back of higher advertising demand as the economy continues to improve from 2010-11. During previous years, clients cut advertising budgets amid weaker consumer spending, particularly on highly discretionary and big-ticket items. Over the five years through 2013-14, industry revenue is expected to increase by an annualised 0.8% as business and consumer confidence continues to increase. In the five years through 2018-19, the industry will continue to reinvent its services to be more in line with increasing media fragmentation. According to Allday, “increasing competition from similar services such as marketing and public relation firms will eat into potential revenue sources, while greater investment will be required to continue to adjust to new mobile and online advertising spaces.”

The Advertising Agencies industry has a low level of market share concentration. Consolidation of marketing communications businesses has also occurred on a global scale, as increasing globalisation of clients necessitates the provision of services on a global basis. Further consolidation is expected over the next five years, as the major players acquire emerging digital agencies. Over time, the mid-size independent agency is expected to become rarer, with most firms operating at the extremes of the spectrum. There will be large firms operating under the holding company model, and small firms serving niche and emerging markets. The industry’s major players include STW Communications, Dentsu Australia, Clemenger and Enero Group. For more information, visit IBISWorld’s Advertising Agencies report in Australia industry page.

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IBISWorld industry Report Key Topics

Companies operating in the industry provide advertising services, such as the creation of advertising campaigns and materials, to clients.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit or call (03) 9655 3886.

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Gavin Smith
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