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

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Media fragmentation has provided a challenging and fragmented media environment for advertising agencies and has prompted many agencies to reinvent themselves by moving away from their traditional roles. For this reason, industry research firm IBISWorld has updated its report on the Advertising Agencies industry in Australia.

IBISWorld Market Research

IBISWorld Market Research

The fragmentation of consumer media viewing habits has prompted clients to include a greater proportion of below-the-line communication in marketing campaigns

The Advertising Agencies industry is sensitive to changes in business confidence and media demand, which influence advertising spending by clients and advertising volumes on TV, radio, websites and in newspapers and magazines. However, over the past five years, the relatively high cost of mass media advertising and the fragmentation of consumer media viewing habits has prompted clients to include a greater proportion of below-the-line communication in marketing campaigns, negatively affecting the industry due to the diminished role of advertising firms. According to IBISWorld industry analyst Alen Allday, “media fragmentation has been driven by the emergence of technological innovations and new media, including smartphones and tablets, faster and cheaper internet connections, online advertising, pay TV providers, new free-to-air TV channels and social networking websites, such as Twitter, Facebook and YouTube.” This has provided a challenging and fragmented media environment for advertising agencies and has prompted many agencies to reinvent themselves by moving away from their traditional roles. For example, all of the major industry players have become diversified marketing communications holding companies, after acquiring complementary businesses like public relations agencies, market research firms, digital advertising agencies and web developers.

IBISWorld expects the industry to generate revenue of $2.0 billion in 2014-15, with an increase of 1.8% from the previous year. “This is expected to occur in line with moderate advertising demand, as economic conditions have remained mixed due to higher consumer spending being offset by some employment uncertainty,” says Allday. During the previous five years, some clients cut advertising budgets amid weaker consumer spending, particularly for highly discretionary and big-ticket items. Over the five years through 2014-15, industry revenue is expected to increase by an annualised 1.7%, as business and consumer confidence increase. In the five years through 2019-20, the industry will continue to reinvent its services to bring them in line with increasing media fragmentation. Increasing competition from similar services, such as those offered by marketing and public relations firms, will eat into potential revenue, and greater investment will be required to adjust to new mobile and online advertising spaces. IBISWorld expects industry revenue to increase over the five years through 2019-20, as demand for advertising services increases at a steady rate.

The Advertising Agencies industry has a low concentration level. 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 have increasingly sought marketing campaigns that integrate traditional media advertising with below-the-line methods to reach target audiences.

For more information, visit IBISWorld’s Advertising Agencies industry in Australia report page.

Companies in the industry provide advertising services, such as the creation of advertising campaigns and materials, to clients. Industry revenue relates to revenue received from developing and producing advertising campaigns, rather than from client billings.

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IBISWorld industry Report Key Topics

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 http://www.ibisworld.com.au or call (03) 9655 3886.

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Gavin Smith
IBISWorld
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