Melbourne, Australia (PRWEB) April 16, 2014
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; online advertising; podcasts; pay TV; new free-to-air TV channels; and social networking websites, such as Twitter, Facebook and YouTube. 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. IBISWorld industry analyst Alen Allday states “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 expects the industry to generate revenue of $1.9 billion in 2013-14, which is an increase of 2.1% from the previous year. This will come on the back of higher advertising demand as the economy continues to improve. 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 0.9% as business and consumer confidence 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 adjust to new mobile and online advertising spaces.”
The Advertising Agencies industry has a low level of market share concentration. The major industry players are holding companies that generally own many small individual and specialist advertising agencies. Many of these holding companies started as individual advertising agencies before merging with and acquiring other advertising agencies along with complementary marketing and communications businesses, such as public relations agencies, market research firms, web developers and digital agencies. This has occurred as clients increasingly seek marketing campaigns that integrate traditional media advertising with below-the-line methods to reach target audiences. Major players include STW Communications Group, Omnicon Media Group, Publicis Communication 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.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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 http://www.ibisworld.com.au or call (03) 9655 3886.