Iapi census final publication use

Institute of Advertising Practitioners in Ireland

Industry Census 2013 in association with Amรกrach Research

Contents

Page

Summary of Key Findings

3

Market Environment

7

Section 1 - Staff Turnover, Education & Demographics Staff Breakdown by Role and Gender

13

Age Profile and Level of Education

18

Section 2 - Forecasts for 2013

1

Forecasts for 2013

25

Factors of Influence

29

IAPI Industry Census 2013

Introduction to IAPI Census 2013 The Institute of Advertising Practitioners in Ireland (IAPI) is the trade body representing advertising agencies across the spectrum: creative, media, digital, and full service.

Introduction Amárach Research, in partnership with IAPI, hosted a survey for all member companies of IAPI, to establish useful industry information and to aid management in each member company.

This is the first time the industry has ever produced such a detailed census and yielded a wealth of data for us to learn from.1 An overall response rate of 88% was achieved for the survey. From a total number of 43 member agencies in IAPI, there were 30 completed surveys received, representing a total of 37 agencies.2 Each survey was conducted using an online methodology and the fieldwork was carried out between May and June of 2013. It was completed by either the Managing Director or the Financial Director of each agency.

IAPI members (as of May 2013)3 Bluecube Brando Brindley Campaign Carat Ireland Cawley Nea\TBWA Chemistry Clear Blue Water DDFH&B Eighty:Twenty Firstcom Gaffney McHugh GT Media Havas Dublin In the company of Huskies Initiative Irish International

Javelin Language McCann Dublin MEC Global Mediacom Mediavest Mediaworks Mindshare Ogilvy Dublin OMD Ireland Owens DDB Parker PHD Pierce Media Publicis Dublin Radical Rothco

Rubicon Shanley Media Southern Advertising Starcom Target McConnells The Media Bureau Vizeum Y&R Zenith

IAPI conducted a more limited industry census in 2007.

Some agencies responded as a group • Core Media completed on behalf of Clear Blue Water, Mediavest, Radical, Starcom and Mediaworks • Ogilvy completed on behalf of Ogilvy and Y&R • Aegis completed on behalf of Brindley, Vizeum and Carat Ireland 3 Since the research concluded, five new agencies joined IAPI. 1 2

2

IAPI Industry Census 2013

Key Findings The census paints a picture of an industry in transition and under financial pressure, yet optimistic about the future.

Numbers employed 1,281 people were directly employed by IAPI member agencies in 2012. Amazingly this is exactly the same number of people employed in IAPI member agencies in 2007. This indicates more stability than we expected. While some mergers and closures have taken place since the downturn,4 it demonstrates that staff reduction hasn’t been quite as bad as we feared.

There is a visible difference between the numbers of people employed in creative agencies: 787 people in total, compared to 494 people in media agencies. When compared to 2007, we found a decrease in creative agency staff numbers by 20% and a growth in media agencies by 69%. This would support the impression of significant growth on the media agency side.

Growth The number of full time jobs in the industry is high compared to part time/freelance positions. Two hundred and thirty people were hired in 2012. A third of all agencies expect staff levels to increase in 2013 indicating a confidence that the industry is expanding.

The industry attracts those with high levels of education; 66% had a degree or higher; 18.3% had a postgrad qualification.

Age breakdown The average age for employees in the industry is 35. The average age in the 2007 IAPI industry census was 34. This is in line with the client side where 42% of clients are aged 30 – 39 years old.5

4 5

3

There are less IAPI member agencies: 48 in 2007 compared to 43 in 2013.

Marketing Institute of Ireland, Salary and Market Trend Report 2012-13.

IAPI Industry Census 2013

Women in the industry – breakdown by gender •

omen make up 51% the workforce, men 49%. The reverse is the case for UK agencies: W 51% men and 49% women.6

•

omen make up 13% of the total at Chairperson/CEO/Managing Partner level. It was W only 9% in 2007. Irish advertising agencies lag behind our UK counterpart where women represent 22% at this level.

•

here’s a slight disparity between media and creative agencies. Creative agencies have T 17% women at Chairperson/CEO/Managing Partner level, compared to 10% in media agencies.

Some parts of the industry are dominated by women

• •

Project management: 80% women, 20% men.

Account management: 70% women, 30% men.

Others are dominated by men

• •

Creative areas (copywriters, arts directors, digital and design) 67% are men, 33% women.

It’s even more pronounced in digital with some areas up to 90% male.

Confidence in the sector for the year ahead • • •

20% of those surveyed estimated turnover for the industry as a whole will increase.

33% of those surveyed estimated turnover for the industry as a whole will remain the same.

47% of those surveyed estimated turnover for the industry as a whole would decrease.

By contrast agencies were more bullish about their own agency’s prospects

• •

60% of those surveyed forecast growth for their agency in 2013.

33% of those surveyed predicted it would remain the same.

The apparent ‘disconnect’ between confidence in the industry vs. confidence in individual agency prospects is quite common. Historical data from different business sectors suggests that business owners and managers are likely to be more optimistic about their own business, whilst being less positive about the outlook for the industry as whole.

6

4

IPA Industry Census 2012.

IAPI Industry Census 2013

The Market Environment Agencies are really feeling the pressure on cost and time.

41% of clients use procurement departments to agree fees. Therefore it’s not surprising that the role of procurement in agency selection ranks third in terms of factors that pre-occupy agencies in 2013. Only time pressure and cost pressure supersede it.

Amárach completed a short statistical analysis of the findings from sentiment questions in order to explore the drivers of agency growth – and barriers – identified in the research. Using correlation analysis it identified the following key (statistically significant) relationships between performance, perceptions and expectations.

•

There is a strong, positive correlation between the agency growth outlook and hiring plans, one of the strongest in the data in fact.

•

Globalisation is strongly correlated with time pressures, and with the shift of decision making abroad.

•

The role of procurement in agency selection is negatively correlated with industry growth outlook and agency growth outlook, but positively correlated with the influence of management consultants.

Our survey and analysis point to a time of dynamic change in the world of marketing and communication agencies. The balance of opportunities and threats broadly favours a positive outlook at the individual agency level, if not at the aggregate industry level.

September 2013

Tania Banotti CEO

Institute of Advertising Practitioners in Ireland

5

IAPI Industry Census 2013

IAPI Members (as of May 2013) Bluecube Brando Brindley Campaign Carat Ireland Cawley Nea\TBWA Chemistry Clear Blue Water DDFH&B Eighty:Twenty Firstcom Gaffney McHugh GT Media Havas Dublin In the Company of Huskies Initiative Irish International Javelin Language McCann Dublin MEC Global Mediacom

6

Mediavest Mediaworks Mindshare Ogilvy Dublin OMD Ireland Owens DDB Parker PHD Pierce Media Publicis Dublin Radical Rothco Rubicon Shanley Media Southern Advertising Starcom Target McConnells The Media Bureau Vizeum Y&R Zenith

IAPI Industry Census 2013

Profile of Sample Agency Type

Creative and Media 3%

Media including Digital 43%

Creative including Digital 54%

Q. What type of advertising agency do you represent?

Average Number of Staff employed in each Agency Total

Min.

Max.

2

137

3

96

2

137

1

0

6

1

0

4

1

0

6

0

25

0

25

0

3

Full time

31

Creative

34

Media

27

Part time

Freelance

3 4 1

(Base: All IAPI member companies - 37) Q. What is the total number of staff employed in your agency?

Due to rounding some totals may not add up to 100% in this document.

7

IAPI Industry Census 2013

Average Agency Income/Billings

Mean â‚Ź

Median* â‚Ź

Creative/Digital Agency

4,633,778

4,873,154

Media/Digital Agency

43,579,714

70,208,000

* Median is the middle point between highest and lowest volume turnover Q. In order for us to determine what we as an industry contribute to the economy, please can you supply the following income details?

8

Creative Agencies Turnover Scatter Graph Illustration of Advertising Industry

by Gross Income/Billings 10 9 Creative Agencies Turnover 8 10

Creative Agency Gross Income

79 68

Millions € Millions

Millions

57 46 35 24 13 02 1 0

0

5

10

15

20

0

5

10

15

20

Number of Agencies

Media Agencies Turnover

Media Agency Billings

160 140

Media Agencies Turnover

Millions Millions

€ Millions

160 120 140 100 120 80

100 60

80 40 60 20 40 0

20 0 0

5

10

15

Number of Agencies

0 5 10 *Gross income is defined as the total fees, commission, mark-up’s etc. earned during the year. * Billings is defined as the total amount of client investment put through your agency for the purchase of media/media activities in the given 12 months.

9

15

IAPI Industry Census 2013

Section 1

Industry Census: Staff Turnover, Education & Demographics

12

IAPI Industry Census 2013

Breakdown of Staff by Department

5%

Chair/CEO/MD/Managing Partner

10%

15%

24% 1%

Account/Strategic Planning

5% 1%

Media Planning and Buying

12%

Search/SEO Media Research Other Media

4% 1% 2%

Creative - Copywriters/Art Directors

11%

Creative - Digital

3%

Creative - Design

3% 4%

Other Creative/Studio Creative Services incl. Art & Print Buying

1%

Project Management

1%

Digital Programmers/Web Designers

2%

Digital Production

2%

Digital Project Management

1%

Digital UX/Information Architecture

1%

Other Digital TV/Cinema/Radio Production Production Administration

30%

7%

Account Management

Research/Information

25%

5%

Other Executive Management

New Business/Marketing/PR

20%

4% 2% 1%

Finance/Payroll/Cashiers

8%

Human Resources/Training*

1%

IT

1%

PA/Secretaries

3%

All other staff

3%

Q. Please provide your breakdown of staff by each of the following departments.

13

IAPI Industry Census 2013

Breakdown of Department by Position and Gender IAPI Census

IPA Census**

Total %

Male %

Female %

Total %

Male %

Female %

Chair/CEO/MD/Managing Partner

5

87

13

3

78

22

Other Executive Management

6

69

31

3

72

28

Account Management

23

30

70

19

38

62

New Business/Marketing/PR

1

42

58

2

28

72

Account/Strategic Planning

4

43

57

5

56

44

Research/Information

1

50

50

1

51

49

Media Planning and Buying

12

50

50

13

46

54

Search/SEO

3

50

50

4

60

40

Media Research

1

-

100

1

40

60

Other Media

2

55

45

2

45

55

Creative - Copywriters/Art Directors

11

67

33

9

76

24

Creative - Digital

2

70

30

1

82

18

Creative - Design

2

71

29

3

75

25

Other Creative/Studio

4

64

36

4

80

20

Creative Services incl. Art & Print Buying

*

67

33

1

46

54

Project Management

*

20

80

2

43

57

Digital Programmers/Web Designers

2

90

10

2

85

15

Digital Production

1

89

11

1

70

30

Digital Project Management

1

50

50

1

39

61

Digital UX/Information Architecture

*

60

40

*

77

23

Other Digital

3

50

50

3

56

44

TV/Cinema/Radio Production

1

47

53

3

38

62

Production Administration

1

29

71

1

34

66

Finance/Payroll/Cashiers

7

33

67

6

36

64

Human Resources/Training*

*

15

85

1

10

90

IT

1

86

14

1

87

13

PA/Secretaries

2

-

100

3

4

96

All other staff

2

33

67

6

45

55

100 (1,281)

49 (629)

51 (652)

100 (20,491)

51 (10,449)

49 (10,042)

Total (%) Total (Number)

*Less than 1% – No response **Source – Institute of Practitioners in Advertising (IPA) Agency Census 2012 www.ipa.co.uk Q. Please provide your breakdown of staff by each of the following departments.

14

IAPI Industry Census 2013

Breakdown of Department By Position and Gender

Male

Female

Chair/CEO/MD/Managing Partner

87%

13%

Other Executive Management

69%

Account Management

30%

New Business/Marketing/PR

42%

Account/Strategic Planning

43%

Research/Information

50%

50%

Media Planning and Buying

50%

50%

Search/SEO

50%

50%

Media Research

100%

Other Media

55%

Creative - Copywriters/Art Directors

67%

Creative - Digital

70%

Creative - Design

71%

Other Creative/Studio

64%

Creative Services incl. Art & Print Buying

67%

Project Management

20%

Digital Programmers/Web Designers

90%

10%

Digital Production

89%

11%

Digital Project Management

50%

Digital UX/Information Architecture

60%

Other Digital

50%

TV/Cinema/Radio Production

47%

Production Administration

29%

Finance/Payroll/Cashiers

33%

Human Resources/Training*

15%

IT

86%

PA/Secretaries

100%

All other staff

33%

31% 70% 58% 57%

45% 33% 30% 29% 36% 33% 80%

50% 40% 50% 53% 71% 67% 85% 14% 67%

Q. Please provide a breakdown of your staff by each of the following departments.

15

IAPI Industry Census 2013

Breakdown of Staff by Discipline (Creative/Digital Agencies) IAPI Total (Base: 787)

IAPI Male (Base: 415)

IAPI Female (Base: 372)

Number

%

Number

%

Number

%

Chair/CEO/MD/Managing Partner

29

4

24

83

5

17

Other Executive Management

40

5

30

75

10

25

Account Management

190

24

54

28

136

72

New Business/Marketing/PR

7

1

2

29

5

71

Account/Strategic Planning

31

4

14

45

17

55

Research/Information

1

*

1

100

0

-

Media Planning and Buying

23

3

21

91

2

9

Search/SEO

10

1

6

60

4

40

Media Research

5

1

-

-

5

100

Other Media

14

2

8

57

6

43

Creative - Copywriters/Art Directors

134

17

90

67

44

33

Creative - Digital

29

4

20

69

9

31

Creative - Design

23

3

15

65

8

35

Other Creative/Studio

49

6

32

65

17

35

Creative Services incl. Art & Print Buying

5

1

3

60

2

40

Project Management

5

1

1

20

4

80

Digital Programmers/Web Designers

17

2

15

88

2

12

Digital Production

18

2

16

88

2

12

Digital Project Management

7

1

3

43

4

57

Digital UX/Information Architecture

5

1

3

60

2

40

Other Digital

24

3

15

63

9

37

TV/Cinema/Radio Production

15

2

7

47

8

53

Production Administration

7

1

2

29

5

71

Finance/Payroll/Cashiers

52

7

17

33

35

67

Human Resources/Training*

3

*

1

33

2

67

IT

6

1

6

100

0

-

PA/Secretaries

12

2

0

-

12

100

All other staff

26

3

9

35

17

65

*Less than 1% – No response Q. Please provide your breakdown of staff by each of the following departments.

16

IAPI Industry Census 2013

Breakdown of Staff by Discipline (Media/Digital Agencies) IAPI Total (Base: 494)

IAPI Male (Base: 214)

Number

%

Number

%

Number

%

Chair/CEO/MD/Managing Partner

29

6

26

90

3

10

Other Executive Management

39

8

24

62

15

38

Account Management

106

21

35

33

71

67

New Business/Marketing/PR

5

1

3

60

2

40

Account/Strategic Planning

23

5

9

39

14

61

Research/Information

13

3

6

46

7

54

Media Planning and Buying

129

26

55

43

74

57

Search/SEO

30

6

14

47

16

53

Media Research

2

*

-

-

2

100

Other Media

8

2

4

50

4

50

Creative - Copywriters/Art Directors

8

2

5

63

3

37

Creative - Digital

1

*

1

100

-

-

Creative - Design

4

1

4

100

-

-

Other Creative/Studio

3

1

1

33

2

67

Creative Services incl. Art & Print Buying

1

*

1

100

-

-

Project Management

-

-

-

-

-

-

Digital Programmers/Web Designers

3

1

3

100

-

-

Digital Production

-

-

-

-

-

-

Digital Project Management

3

1

2

67

1

33

Digital UX/Information Architecture

-

-

-

-

-

-

16

3

5

31

11

69

TV/Cinema/Radio Production

-

-

-

-

-

-

Production Administration

-

-

-

-

-

-

Finance/Payroll/Cashiers

40

8

10

25

30

75

Human Resources/Training*

4

1

-

-

4

100

IT

8

2

6

75

2

25

PA/Secretaries

17

3

-

-

17

100

All other staff

2

*

-

-

2

100

Other Digital

IAPI Female (Base: 280)

*Less than 1% – No response Q. Please provide your breakdown of staff by each of the following departments.

17

IAPI Industry Census 2013

Average Age of Staff Working in IAPI Member Agencies Total

Male

Female

Number

%

Number

%

Number

%

4

1%

-

-

4

100%

21-25

144

11%

60

42%

84

58%

26-30

364

28%

152

42%

212

58%

31-40

494

39%

244

50%

250

50%

41-50

198

15%

116

59%

82

41%

51-60

66

5%

50

76%

16

24%

61+

11

1%

7

64%

4

36%

Total

1281

100%

629

100%

652

100%

Under 21

Average IAPI Agency Age: 35

What proportion of your staff fit into the following age categories?

Profile of IAPI Staff by Age and Type of Agency Total

Creative

Media

Number

%

Number

%

Number

%

4

1%

4

1%

-

-

21-25

144

11%

75

10%

69

14%

26-30

364

28%

202

26%

162

33%

31-40

494

39%

318

40%

176

36%

41-50

198

15%

142

18%

56

11%

51-60

66

5%

39

5%

27

5%

61+

11

1%

7

1%

4

1%

Total

1281

100%

787

100%

494

100%

Under 21

Average Creative Agency Age: 37

Average Media Agency Age: 34

What proportion of your staff fit into the following age categories?

18

IAPI Industry Census 2013

Average Level of Education achieved by those working in IAPI Member Agencies Ph. D. 0.2% Postgraduate 9.6% Masters 8.5% Degree 47.7% Diploma 16.7% Leaving Cert. 11.3% Don’t Know 5% Other 1%

Degree

Q. Please state the percentage breakdown of the highest level of education achieved by your staff.

19

IAPI Industry Census 2013

Level of Staff Turnover in IAPI Agencies at Year Ended 2012

Hired

230

Left to move within the industry

Left the industry

Let go/contract terminated

Left to emigrate

85 41

35

29

152

Creative Media

78 47

38 24

17

30 5

17

12

Q. In the year ending December 2012, how many staff were‌ 20

IAPI Industry Census 2013

21

IAPI Industry Census 2013

176

C

Section 2

Industry Census: Forecasts for 2013

e We feel positive about the futur • 60% of agencies forecast growth in their agency in 2013. .

• 33% expect staff levels to increase me.

• Most posts in our industry are full-ti

Forecast 2013

24

IAPI Industry Census 2013

Estimated Changes in Turnover for the Whole Industry in 2013 IAPI Census EACA* Data

60%

50%

47%

40% 34%

33% 29%

30%

29%

20%

20%

10%

8% -%

-%

-%

Strongly Increase

Increase

Remain the Same

Decrease

Strongly Decrease

Historical data suggests that business owners, managers and stakeholders are likely to be optimistic about their own business whilst being less than positive about the outlook of their industry. *‘European Association of Communications Agencies (EACA) Euro Barometer 2013 survey on current trends in agencies across Europe. www.eaca.be’ Q.How do you estimate the turnover for the whole industry will change for the year 2013?

25

IAPI Industry Census 2013

Future Forecasts for My Agency in 2013

60% 33% 7% Growth

Remain the Same

Recession/Decline

EACA* Forecast for Industry in 2013

43%

35%

22%

Growth

Remain the Same

Recession/Decline

Historical data suggests that business owners, managers and stakeholders are likely to be optimistic about their own business whilst being less than positive about the outlook of their industry. * European Association of Communications Agencies (EACA) Euro Barometer 2013 survey on current trends in agencies across Europe. www.eaca.be 26

IAPI Industry Census 2013

Expected Levels of Growth/Decline for Agencies in 2013

Growth Expected

16%

Decline Expected

3.5%

Q. What percentage growth do you expect for your agency in 2013?

Q. What percentage decline do you expect for your agency in 2013?

Expected Staff Levels for 2013

Increase 33%

Remain Constant 60%

Decrease 7% Q. By the end of 2013 do you expect staff levels to increase, decrease, remain the same when compared to current levels?

27

IAPI Industry Census 2013

11 59

IN

Factors of Influence on Agencies in 2013 IAPI Strong/very strong 4/5

EACA* Strong/very strong 4/5

Time pressure

80%

Cost pressure

83%

76% 67%

Pressure on smaller agencies Procurement in the agency selection process

64%

Clients thinking and acting short-term

63%

Globalisation

60%

Shift of decision making to abroad

60%

Rising importance of e-business

25% 46% 71% 42% 30%

53%

Clients’ personnel turnover (marketing & CEO’s)

42% 34%

47%

Expenditure on new business

30%

43%

Data based marketing communications

42%

37%

Prohibition/restriction on advertising

33%

Business/management consultants

26%

Lack of qualified staff

23% 9%

24%

Mergers/co-operation among clients Competition from lower cost economies/BRIC countries

34%

46% 21%

20% 3%

* European Association of Communications Agencies (EACA) Euro Barometer 2013 survey on current trends in agencies across Europe. www.eaca.be

Q. How strongly will the following factors influence and/or preoccupy agencies in 2013?

29

IAPI Industry Census 2013

IN

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