Advertising Agencies in the UK Industry Market Research Report Now Updated by IBISWorld

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Advertising agencies have suffered under the strained conditions of the economic downturn, however as businesses recover the demand for agency services is expected to grow. For this reason, industry research firm IBISWorld has updated its report on the Advertising Agencies industry.

IBISWorld industry market research
The rise of digital content has changed the traditional advertising model

The Advertising Agencies industry has endured a difficult five years. Since the downturn began in 2008-09, businesses have cut back sharply on their advertising expenses, causing revenue to contract in 2008-09 and 2009-10. According to IBISWorld industry analyst Iyman Uvais, “The industry recovered temporarily in 2010-11, but remained stagnant in the following year as economic conditions weakened.” The London Olympic Games increased demand in 2012-13, which enabled revenue to grow moderately. In 2013-14, the industry is expected to continue this trend as economic conditions and business confidence levels gradually improve and allow businesses to slowly increase their marketing and advertising budgets. However, growth is estimated to be lower than in the previous year because of the inflationary effect of the London Olympics and other sporting events in 2012-13. Over the five years through 2013-14, revenue is expected to decline at a compound annual rate of 1.3%. It is forecast to rise by 0.5% to £17.6 billion in the current year.

Although the fall in the Advertising Agencies industry’s revenue is primarily attributable to weak economic conditions, media fragmentation and the growth in online advertising also affected the industry. “This was primarily because public relations firms and other companies not included in the industry captured a share of the market because they were better able to offer campaigns targeting niche markets,” added Uvais. The industry concentration level has increased over the past two decades, since there have been many mergers and acquisitions in the global marketing sector. The three largest players are global marketing and communications giants that have emerged from this period of consolidation: WPP, Publicis and Omnicom. Therefore, although the large players gained market share during the period, concentration in the industry remains low with many small players operating in the industry.

Over the next five years, a recovering economy is expected to raise marketing and advertising budgets. However, spending on advertising is forecast to rise slowly because businesses will remain cautious, especially in the short term. This will restrict industry growth over the coming period. Strong competition from public relations firms and other companies, coupled with the trend of businesses bypassing agencies, will also constrain growth. Firms that adapt to this new advertising world will perform best over the period. Industry revenue is forecast to increase over the next five years.

For more information on the Advertising Agencies industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.

IBISWorld industry Report Key Topics

Advertising agencies provide advice about, produce and place advertising material across a range of media, including TV, print, radio and the internet. They also advertise at the point of sale, on billboards and using direct mail promotional campaigns. The industry excludes public relations agencies, media sales representatives and market researchers.

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

About IBISWorld
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 many UK industries. 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 London, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.co.uk or call (020) 7222 9898.

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Danielle Goodman
IBISWorld
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