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ADVERTISING INDUSTRY

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Christine Cavallaro

on 13 December 2014

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Transcript of ADVERTISING INDUSTRY

MAJOR COMPANIES

Omnicom Group Inc.
WPP PLC
Interpublic Group of Companies Inc.
Competitive Environment
INDUSTRY SIZE
The advertising industry is a 158.3 billion dollar industry.
The United States has the largest advertising market in the world.
TV, radio and digital is the largest subdivision of the advertising industry and is expected to generate up to 86.3 billion dollars in revenue by 2018.

"Topic: Advertising Industry in the U.S." Www.statista.com. N.p., n.d. Web. 03 Dec. 2014."










GROWTH TRENDS
The advertising industry represents more than 30% growth rate from 2010-2015.
Global advertising market growth forecasts at 5.3% for 2014 and 2015 aided by the growth in digital advertising and technology .
Internet advertising is closing in on TV advertising to become the largest entertainment and media segment and it has had a tremendous amount of growth the past few years.





INDUSTRY OVERVIEW
Advertising is a form of communication that attempts to persuade potential customers to purchase or to consume more of a particular brand of product or service than competing brands and services through the creation of a positive brand image
Also, it attempts to change consumer behavior.
Advertising agencies use their knowledge, skills, creativity and experience on behalf of their clients to drive consumption of their brands.
Major Mediums used to deliver "brand image": television, radio, cinema, magazines, newspapers, video games, the internet, direct mail, billboards, outdoor posters and sponsorship
ADVERTISING INDUSTRY
There is a low level of market concentration
The top 4 advertising agencies make up 31.9% of the market share
There is a current trend for the top corporations to go global to expand to new markets
IBIS states that competition is very high and is becoming more and more competitive every year
KEY INDUSTRY CHALLENGES

Ad Agency
Main Activities
Creating advertising campaigns
Providing advice and support covering most facets of the industry
Disbursement of advertising campaigns through available mediums, such as TV and periodicals

Major Products &
Services
Advertising services
Public relations services
Creative services
Media planning and buying
Media representation services
Omnicom Group Inc.
Market Share:
11%
Brand Names:
Goodby, Silverstein & Partners, GSD&M
Over 5,000 clients in 100 countries
Operates through three global agency networks (BBDO Worldwide, DDB Worldwide and TBWA Worldwide) and several US agencies
Offers advertising agency services, the company offers marketing consultation, market research, sales promotion, specialty communications, interactive and digital media, media buying services and public relations
Strategy:
Diversified advertising services across industries--allows Omnicom to generate revenue regardless of industry trends
Expected Growth:
annualized rate of 6.8% to $3.8 billion over five years
Industry
External Drivers
Total Advertising Expenditure
(an increase in total US advertising expenses leads to increase spending per company)
Consumer Spending
(as consumer spending increases, total advertising expenses increase for companies to increase brand awareness)
Corporate Profit
(increase in corporate profit leads to an increase in advertising expenditure)
Fear Index
(As investor uncertainty increases, companies may be less willing to incur nonessential expenditures, such as advertising)
Current Performance
Digital advertising campaigns have changed the industry landscape
This change has spurred revenue growth for the Advertising Agencies industry
Total advertising expenditure is expected to grow at an annualized rate of 4.5% within the next 5 years
Industry revenue is expected to grow at an annualized rate of 1.4% to $34.4 billion within the next 5 years
Emerging Trends
New developments of digital mediums, such as tablets and smartphones, provide new revenue streams
Viral Marketing is increasing due to social media- it allows the advertiser to gain more revenue with no additional cost
Tools for measuring digital media consumer demographics are being created in order to specifically target customers in the fragmented consumer market
Life Cycle
In the mature phase of its life cycle (Revenue grows at the same pace as the economy, stabilized company numbers, established technology & processes, and total market acceptance)
Several firms have expanded into global markets, signaling that market saturation has been reached
There are signs of consolidation
The industry's primary source of revenue, traditional media, is falling in popularity
The future role of agencies is uncertain as advertising techniques continue to change
Products & Services
Major Markets
Interpublic Group
of Companies Inc
Market

Share
: 9.7%
Brand

Names
: Draftfcb, Lowe Worldwide, McCann Worldgroup
IPG is global market provider in consumer advertising, digital marketing, communications planning and media buying
Serves 40 global accounts (includes Johnson & Johnson, Nestle, & Microsoft)
Strategy
: IPG focuses on growth from entering new markets rather than industry-relevant operations
Expected Growth
: annualized rate of 3.1% to $3.3 billion over the five years
WPP PLC
Market Share
: 7.1%
Brand Names
: Ogilvy Group, JWT, Young & Rubicam, Grey Group, United Network, Mindshare, Mediaedge:cia, Mediacom
Communications services organization operating in 110 countries
Strategy
: invests in developing markets, new media and consumer insight to grow revenues.
Expected Growth
: annualized rate of 6.5% to $2.4 billion
RESOURCES
Turk, Sarah. "Advertising Agencies in the US." Industry Report 54181 (2014): n. pag. IBIS World. Web. 30 Nov. 2014.
"27-1011.00 - Art Directors." 27-1011.00 - Art Directors. N.p., n.d. Web. 04 Dec. 2014.
"11-2011.00 - Advertising and Promotions Managers." 11-2011.00 - Advertising and Promotions Managers. N.p., n.d. Web. 03 Dec. 2014.
"Jobs by Found for Jobs by Found for 4 Jobs by Found for Jobs by Found for." Jobs for Art Directors. N.p., n.d. Web. 04 Dec. 2014.
"| Mullen.com." Mullencom RSS. N.p., n.d. Web. 04 Dec. 2014
"Media Planner Jobs in Massachusetts." Media Planner Jobs, Employment in Massachusetts | Indeed.com. N.p., n.d. Web. 04 Dec. 2014.
"Skills You Need for an Advertising Manager." Work. N.p., n.d. Web. 04 Dec. 2014.
"Growth of Advertising Spending Worldwide 2014 | Statistic." Statista. N.p., n.d. Web. 04 Dec. 2014.
"Topic: Advertising Industry in the U.S." Www.statista.com. N.p., n.d. Web. 03 Dec. 2014.
"Summary." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, n.d. Web. 04 Dec. 2014.
The Wall Street Journal. Dow Jones & Company, n.d. Web. 04 Dec. 2014.
Gregory, Jennifer G. "Challenges Facing Today's Advertising Company." OPEN Forum. N.p., 1 Mar. 2012. Web. 04 Dec. 2014
Goodwin, Tom. "Advertising Agencies Are Dying, Just as They Become Most Vital." The Guardian. N.p., 4 Sept. 2014. Web. 3 Dec. 2014.
"US TV Ad Spend and Influence (Updated #8211; Q3 2013 Data)." MarketingCharts. N.p., n.d. Web. 04 Dec. 2014.
"Radio & Television Business Report." Radio Television Business Report RSS. N.p., n.d. Web. 04 Dec. 2014.
Different subdivisions of the advertising industry are expected to expand and generate more revenue than others in the future.
Job Specific Research
Two Specific occupations in the advertising industry:
A Media planner
who is responsible for developing, executing and managing media plans best suited to meet client requirements and objectives. The ONet interest code is EAC (Enterprising, Artistic, Conventional)
An art director
who is responsible for the creation of general advertising campaigns and they coordinate design with production staff. The ONet interest code for an art director is AE (Artistic & Enterprising)
Entry level positions in the advertising industry include marketing assistants, assistant brand managers or advertising account coordinators. Salary: $30,000
After assisting one of these roles, people usually then advance to an account executive role. Salary: $45,612
After this, it is common people acquire a supervisor role being fully responsible for a client relationship, along with managing a team.
Salary: $71,598
Recommended Skills and Education:
Bachelors degree in marketing or advertising. Skills in the advertising industry include interpersonal and communication skills, creativity (visually and intellectually), teamwork, IT skills and commercial awareness.

General employment outlook:
Careers in marketing and advertising are expected to grow at an average rate through 2022. The job outlook from 2012-22 is 12%.
Occupations
Changes in Competitive Environment
Actual Job Posting
for Art Director
Tasks
-design and execute integrated, cross-channel advertising initiatives using Photoshop -collaborate with creative directors, copywriters, designers, and other key members of our creative team to produce industry-leading work. -Develop campaigns
Qualification
- Four-year degree, Two years of strong digital design work experience/agency experience, Expert-level experience with Photoshop, Illustrator, and InDesign, Strong design portfolio with combination of print and Web, and Experience with strategic brainstorming, campaign development, creative brief development, and creative execution
Found on link to http://www.myskillsmyfuture.org from http://www.onetonline.org/
Digitas: A global marketing and technology agency that transforms businesses for the digital age-located in Boston, MA
Actual Job Postings for
Media Planner
Qualifications
-
researching, planning and purchasing online media experience - minimum of 1 yr working in digital media required
knowledge of how digital advertising works and what trends are hot
experience providing optimization and insights to clients based on media buys
proficient in Excel, PowerPoint and Outlook Email
branding experience
4 year degree
found on www.indeed.com
Always Keep in Mind...
based off of informational interviews
Always Learn as much as you can
Don't be afraid to speak up
There is more than one avenue to get to where you want to be
Advertising is trending to a more personal market
The client is considered an idiot, they want a solution, but they do not know what the solution should be.

The larger players in the market are expected to enhance their product portfolio of digital services
The companies that cannot adapt to the new digital structure of the industry will collapse
IBIS forecasts that the top competitors in the industry will take a larger market share within the next five years
Technology
As technology further advances it's becoming a possible threat to privacy, attracts scammers, and has the ability to analyze data before it's actually "analyzable."
Technological advancements also increase the client demand for strategies involving social media.

Social Media
Using social media to make money for clients, convincing clients that incorporating social media into campaigns will be more effective, and then successfully using social media for clients have become challenges for the advertising industry.
The internet and social media have changed the role print advertising plays in a company's campaign. Now advertising agencies have to see the role print advertising will play, if it'll play a role at all.
Key Industry Challenges
Brand Marketing
One of the dominant advertising strategies
Challenges:
Assessing the performance of this type of advertising and then convincing the client of the return on investment of brand marketing.
Agencies also need to master this strategy and be able to measure the increased revenue to clients.
Need to focus more on customer than on the client itself.
Key Industry Challenges
General
Campaigns are increasingly getting smaller budgets, shorter lifespans, and decreasing in goals, which is making them pointless.
The agencies aren't really changing, and if they are then they're becoming less ambitious, less valuable, and more strategic.

Turk, Sarah. "Advertising Agencies in the US." Industry Report 54181 (2014): n. pag. IBIS World. Web. 30 Nov. 2014.
Turk, Sarah. "Advertising Agencies in the US." Industry Report 54181 (2014): n. pag. IBIS World. Web. 30 Nov. 2014.
Turk, Sarah. "Advertising Agencies in the US." Industry Report 54181 (2014): n. pag. IBIS World. Web. 30 Nov. 2014.
Turk, Sarah. "Advertising Agencies in the US." Industry Report 54181 (2014): n. pag. IBIS World. Web. 30 Nov. 2014.
Turk, Sarah. "Advertising Agencies in the US." Industry Report 54181 (2014): n. pag. IBIS World. Web. 30 Nov. 2014.
Turk, Sarah. "Advertising Agencies in the US." Industry Report 54181 (2014): n. pag. IBIS World. Web. 30 Nov. 2014.
Turk, Sarah. "Advertising Agencies in the US." Industry Report 54181 (2014): n. pag. IBIS World. Web. 30 Nov. 2014.
Turk, Sarah. "Advertising Agencies in the US." Industry Report 54181 (2014): n. pag. IBIS World. Web. 30 Nov. 2014.
Turk, Sarah. "Advertising Agencies in the US." Industry Report 54181 (2014): n. pag. IBIS World. Web. 30 Nov. 2014.
Turk, Sarah. "Advertising Agencies in the US." Industry Report 54181 (2014): n. pag. IBIS World. Web. 30 Nov. 2014.
Turk, Sarah. "Advertising Agencies in the US." Industry Report 54181 (2014): n. pag. IBIS World. Web. 30 Nov. 2014.
Goodwin, Tom. "Advertising Agencies Are Dying, Just as They Become Most Vital." The Guardian. N.p., 4 Sept. 2014. Web. 3 Dec. 2014.
Gregory, Jennifer G. "Challenges Facing Today's Advertising Company." OPEN Forum. N.p., 1 Mar. 2012. Web. 04 Dec. 2014
Gregory, Jennifer G. "Challenges Facing Today's Advertising Company." OPEN Forum. N.p., 1 Mar. 2012. Web. 04 Dec. 2014.
"| Mullen.com." Mullencom RSS. N.p., n.d. Web. 04 Dec. 2014
"Media Planner Jobs in Massachusetts." Media Planner Jobs, Employment in Massachusetts | Indeed.com. N.p., n.d. Web. 04 Dec. 2014.
Goodwin, Tom. "Advertising Agencies Are Dying, Just as They Become Most Vital." The Guardian. N.p., 4 Sept. 2014. Web. 3 Dec. 2014.
"Jobs by Found for Jobs by Found for 4 Jobs by Found for Jobs by Found for." Jobs for Art Directors. N.p., n.d. Web. 04 Dec. 2014
"US TV Ad Spend and Influence (Updated #8211; Q3 2013 Data)." MarketingCharts. N.p., n.d. Web. 04 Dec. 2014.
Hoelzel, Mark. "THE SOCIAL-MEDIA ADVERTISING REPORT: Growth Forecasts, Market Trends, And The Rise Of Mobile." Business Insider. Business Insider, Inc, 13 Nov. 2014. Web. 04 Dec. 2014.

"Advertising Market Reports 2014." Advertising Industry Market Research Reports, December 2014. N.p., n.d. Web. 04 Dec. 2014.
"Omnicom Group - Home." Omnicom Group - Home. N.p., n.d. Web. 04 Dec. 2014.
Turk, Sarah. "Advertising Agencies in the US." Industry Report 54181 (2014): n. pag. IBIS World. Web. 30 Nov. 2014.
"Radio & Television Business Report." Radio Television Business Report RSS. N.p., n.d. Web. 04 Dec. 2014.
"Growth of Advertising Spending Worldwide 2014 | Statistic." Statista. N.p., n.d. Web. 04 Dec. 2014.
"Advertising Industry Careers." Advertising Industry Careers. N.p., n.d. Web. 04 Dec. 2014.
"Homepage | IPG." Homepage | IPG. N.p., n.d. Web. 04 Dec. 2014.
Turk, Sarah. "Advertising Agencies in the US." Industry Report 54181 (2014): n. pag. IBIS World. Web. 30 Nov. 2014.

"Skills You Need for an Advertising Manager." Work. N.p., n.d. Web. 04 Dec. 2014.
The Wall Street Journal. Dow Jones & Company, n.d. Web. 04 Dec. 2014.
Turk, Sarah. "Advertising Agencies in the US." Industry Report 54181 (2014): n. pag. IBIS World. Web. 30 Nov. 2014.
"About Us - Information about the WPP Parent Company and Our Companies - WPP." About Us - Information about the WPP Parent Company and Our Companies - WPP. N.p., n.d. Web. 04 Dec. 2014.
"Summary." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, n.d. Web. 04 Dec. 2014.

The Wall Street Journal. Dow Jones & Company, n.d. Web. 04 Dec. 2014.
Gregory, Jennifer G. "Challenges Facing Today's Advertising Company." OPEN Forum. N.p., 1 Mar. 2012. Web. 04 Dec. 2014
Christine Cavallaro
Natalia Babula
Nicholas Becker
Caroline Casey
Conor Burns
Full transcript