Industry Census
Introduction Key Findings Sector Overview Agency Types Age Profile of Agency Staff Agency Income and Billings Staff Overview Breakdown by Department Breakdown by Gender Board of Directors Maternity Benefit Forecasts 2014 Agency Forecasts Energing Trends Perceived Challenges Percieved Opportunities
02 06 08 10 12 15 16 18 20 23 24 28 30 34 35 37
Introduction The Institu Practitioners in Ireland body representing adve across the spectrum: cr digital and full service. We commissioned Am conduct a survey of our key industry data. The r captured insights and f stakeholders in membe trends within the indus
ute of Advertising d (IAPI) is the trade ertising agencies reative, media,
mรกrach Research to r members to capture research also forecasts from senior er organisations on stry.
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Industry Census 2015
IAPI had 54 member agencies drawn from the Irish advertising industry in March 2015. This is the third year we have conducted the research allowing us to track progress. Of the 54 IAPI members invited to participate, data was submitted for 45 agencies, representing an excellent response rate of 83%.
IAPI participating members Full Service Chemistry DDFHB Epsilon Focus Gaffney McHugh ICAN In the Company of Huskies Javelin Rubicon Target McConnells Creative Atomic Bloom Boys & Girls Brando CawleyNea\TBWA Havas Irish International Isobar McCannBlue Ogilvy Owens DDB Persuasion Republic Publicis D Publicis Dublin Rothco Thinkhouse Media Carat Clear Blue Water Havas Media Ireland Initiative Universal McCann iProspect Maxus MEC Global Mediacom Mediaedge MediaVest MediaWorks Ltd Mindshare OMD PHD Media Radical Starcom Vizeum Zenith Optimedia
The survey was conducted online and the fieldwork took place March/April 2015 Of the 54 IAPI members invited to participate, data was submitted for 37 companies representing 45 agencies. Respondents self-identified as fullservice, creative or media agencies.
Creative and Full Service agencies have been combined under the heading ‘Creative’ for analysis purposes.
Industry Census 2015
Number of full time staff employed in creative and media agencies
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Industry Census 2015
IAPI’s Census 2015 points to a transformation in the fortunes of Ireland’s advertising industry in the last two years. Not only have members seen an improvement in their own performance, they are also much more bullish about prospects for the wider industry. Crucially, they are also reporting greater client confidence and investment. Most are staffing-up for recovery and growth. But there are a number of caveats to this otherwise positive picture. More competition for skilled staff both within the industry and from other industries, unceasing pressure on rates from clients, globalisation of the Irish market and the diminution of influence of Marketing Directors within client companies. Key findings Challenges and Opportunities There are similar issues across the spectrum of creative and media agencies: • Cost pressures and the need to increase hourly rates • Staff recruitment, retention and salary inflation • The investment required in new business pitches On a more positive note opportunities include: • Clients coming into investment mode • New areas of work for agencies • Delivering solutions in real time • Leveraging the power of data to demonstrate effectiveness. Numbers Employed Numbers directly employed by IAPI member agencies in 2015 was 1,611 full time staff compared to 1,545 in 2014.More people were hired in 2014 than 2013: 357 people hired, a significant increase over 2013.However, 162 of them were ‘movers’ in the industry, twice the number of movers than in 2012 indicating lots of movement of talent and ‘cost of talent’ pressures as a result. We are a young people’s business: 77% of people employed are under 40. The average age of employees in the industry is 36 in creative agencies and 33 in media agencies. Numbers Employed
2014
2013
Full–Time Staff
1,611
1,545
Industry Census 2015
Agency Income Gross creative income is down while media billings continue to rise. One reason for the fall in creative incomes may be global accounts being run from London and other centres. Other factors may include: media owners creating more content for media agencies, global use of content simply repurposed in Ireland and clients re-using existing creative materials. Gender A positive development is the number of women at CEO/ MD/ Managing Partner level has risen from 13% in 2013 to 18% in 2015. Boards are relatively small and women make up 22%, a slight drop on 2014. This compares favourably with the top Irish companies1. Every two years we ask agencies about gender breakdown of roles. While the industry is completely balanced, 50% male 50% female in overall terms, there are a number of ‘gendered areas’. There has been little change in the last two years. Account management is 71% female vs 29% male. Digital Programmers and Web Designers are 78% male vs 22% female. HR and training is 80+% female vs 20% male. Creative roles are the reverse – around 70% male vs 30% female. Maternity/paternity leave It is encouraging so many agencies offer some form of paid maternity leave and interesting to note the variety of practices in place. There has been a jump in the number of agencies offering paid maternity leave from 53% to 73% this year. The uplift can up attributed to a couple of factors. Some agencies who participated last year didn’t offer paid maternity in the 2014 survey but do this year. In addition, some of the new agencies taking part in the research in 2015 offer this benefit. A significant number of agencies also offer paid paternity leave. Tania Banotti CEO, IAPI June 2015
1
Irish Times Top 1000 companies survey May 2014 says 11% of those surveyed have a woman in a board role. The top 25 biggest companies have 25% female representation at board level.
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Sector Overview There h significant change in le in the industry as a who 3 years we have been do is dramatic. In 2013 the first year o nearly half of all agenci decrease in turnover. In has. In fact 81% of agen an increase in turnover.
has been a very evels of confidence ole. The shift in the oing this research
of our research, ies predicted a n 2015 no agency ncies are predicting r.
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Industry Census 2015
Profile of Sample – Agency Type
59% Creative Agencies 30% Media Agencies 11% Full Service Agencies
For the rest of the report Creative and Full Service agencies have been combined under the heading ‘Creative’ for analysis purposes.
Q What type of advertising agency do you represent?
Total Number of Full-Time Staff Employed 2015
1,611
2014
1,545
2013
1,281
Base: All IAPI member companies
Q What is the total number of staff employed in your agency?
Average Number of Full-Time Staff Employed 2015
2014
2013
Creative
38
38
34
Media
26
25
27
Total
33
31
31
Min
Max
Creative
2
125
Media
11
135
Total
2
135
2015
Q What is the total number of full-time staff employed in your agency?
Base: All IAPI member companies
Industry Census 2015
1,095
516
68% Creative & Full Service
32% Media
Number of full time employees by agency type
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12
Industry Census 2015
Number of Full-Time Employees by Agency Type
65% of Creative Agencies have 50 or less staff. 75% of Media Agencies have 50 or less staff.
Number of Employees
140 120 100 80 60 40 20 0 Creative Agencies
Media Agencies
Q What is the total number of staff employed in your agency?
Creative
Age Profile of Agency Staff
Media Average Age
2015
2014
2013
Creative
36
36
37
Media
33
34
34
% Creative
% Media
% Total
2015
2014
2015
2014
2015
2014
Under 21
*
1
0
0
*
*
21-25
10
10
17
14
12
12
26-30
24
22
33
32
27
26
31-40
39
43
35
35
38
40
41-50
21
17
10
13
17
15
51-60
6
7
4
4
5
6
61+
1
1
*
2
1
1
Q What proportion of your staff fit into the following age categories?
Industry Census 2015
13
2012
Level of Staff Churn
2013 2014
357
Number of Employees
261 230
162 127 85 69 55
Hired
Left to stay within industry
Q In the year ending December 2014, how many of your staff were‌
85
Left to leave industry
35
44
54
Let go/contract terminated
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Industry Census 2015
â‚Ź33,963,637 â‚Ź2,936,814 Average Creative Agency Turnover [in Millions]
Average Media Agency Billings [in Millions]
Agency income - creative and media agencies
Industry Census 2015
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Creative
Annual Gross Income
Gross Creative Income (in millions)
Media Gross Creative income is defined as the total amount of fees, commission, markup’s etc. earned during the year.
14 12
Media billings is defined as the total amount of client investment put through your agency for the purchase of media/ media activities.
10 8 6 4 2 0 Creative Agencies
160
Media Billings (in millions)
140 120 100 80 60 40 20 0 Media Agencies
Gross Income Average Gross Creative Income* Average Media Billings* Total Gross Creative Income* Total Media Billings*
* Average based on direct agency comparisons for 2014 and 2015
2015
2014
%
2,936,814
3,330,058
-12
33,963,637
32,156,310
6
58,736,271
66,601,163
-12
407,563,649
385,875,715
6
Q In order for us to determine how much our industry contributes to the economy, can you please supply your company’s gross creative income/mediabillings for 2014?
Staff Overview We are a with the majority of age people or less. Numbers by IAPI member agenci full time staff compared increase of 4.1%. Three quarters of all a staff levels to increase There has been the grea hires in the industry for people were hired.
an industry of SMEs encies employing 50 s directly employed ies in 2015 was 1,611 d to 1,545 in 2014, an
agencies expect their by the end of 2014. atest level of new r the last 3 years; 357
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Industry Census 2015
Breakdown of Staff by Department
Creative
Media
Chair/CEO)/MD/Managing Partner
3%
6%
Other Executive Management
5%
7%
Account Management
22%
18%
New Business/Marketing/PR
2%
–
Account/Strategic Planning
6%
3%
Research Information
–
–
Media Planning & Buying
1%
41%
Search/SEO
1%
6%
Media Research
–
1%
Other Media
–
1%
Creative - Copywriters/Art Directors
19%
0%
Creative - Digital
4%
–
Creative - Design
6%
0%
Other Creative/Studio
4%
0%
Creative Services inc Art & Print Buying
1%
0%
Project Management
2%
–
Digital Programmers/Web Designers
3%
1%
Digital Production
2%
0%
Digital Project Management
1%
0%
Digital UX/Information Architecture
1%
0%
Other Digital
1%
3%
TV/Cinema/Radio Production
2%
0%
Production Administration
2%
0%
Senior Financial Staff
3%
2%
Junior Financial Staff
4%
4%
Human Resources/Training
–
1%
IT
–
1%
PA/Secretaries
2%
2%
All other Staff
2%
4%
Q Please provide your breakdown of staff by each of the following departments
Industry Census 2015
Breakdown of Staff by Department
Creative Media
Number
%
Number
%
Total
%
Chair/CEO)/MD/Managing Partner
33
3
29
6
62
4
Other Executive Management
57
5
37
7
94
6
242
22
94
18
336
21
New Business/Marketing/PR
21
2
2
*
23
1
Account/Strategic Planning
65
6
13
3
78
5
Research Information
4
*
2
*
6
*
Media Planning & Buying
10
1
209
41
219
14
Search/SEO
10
1
30
6
40
2
Media Research
1
*
5
1
6
*
Other Media
3
*
3
1
6
*
204
19
0
0
204
13
Creative - Digital
48
4
2
*
50
3
Creative - Design
68
6
0
0
68
4
Other Creative/Studio
40
4
0
0
40
2
Creative Services inc Art & Print Buying
8
1
0
0
8
1
Project Management
23
2
2
*
25
2
Digital Programmers/Web Designers
37
3
3
1
40
2
Digital Production
19
2
0
0
19
1
Digital Project Management
14
1
0
0
14
1
Digital UX/Information Architecture
9
1
0
0
9
1
Other Digital
11
1
17
3
28
2
TV/Cinema/Radio Production
27
2
0
0
26
2
Production Administration
17
2
0
0
17
1
Senior Financial Staff
31
3
8
2
39
2
Junior Financial Staff
41
4
21
4
62
4
Human Resources/Training
2
*
5
1
7
*
IT
4
*
6
1
10
1
PA/Secretaries
24
2
9
2
33
2
All other Staff
22
2
19
4
41
3
Account Management
Creative - Copywriters/Art Directors
Q Please provide your breakdown of staff by each of the following departments
19
20
Industry Census 2015
Breakdown of Position by Gender - IAPI only ask for gender breakdown of staff every 2 years % 2015
Male Female
% 2013
Chair/CEO)/MD/Managing Partner
82
18
87
13
Base: All IAPI member companies providing gender breakdown
Other Executive Management
54
46
69
31
*Question changed in 2015
Account Management
29
71
30
70
New Business/Marketing/PR
73
27
42
58
Account/Strategic Planning
46
54
43
57
Research Information
33
67
50
50
Media Planning & Buying
43
57
50
50
Search/SEO
65
35
50
50
Media Research
67
33
0
100
Other Media
50
50
55
45
Creative - Copywriters/Art Directors
74
26
67
33
Creative - Digital
67
33
70
30
Creative - Design
71
29
71
29
Other Creative/Studio
70
30
64
36
Creative Services inc Art & Print Buying
50
50
67
33
Project Management
24
76
20
80
Digital Programmers/Web Designers
78
22
90
10
Digital Production
65
35
89
11
Digital Project Management
71
29
50
50
Digital UX/Information Architecture
44
56
60
40
Other Digital
61
39
50
50
TV/Cinema/Radio Production
33
67
47
53
Production Administration
47
53
29
71
Senior Financial Staff *
51
49
n/a
n/a
Junior Financial Staff *
23
77
n/a
n/a
Human Resources/Training
17
83
15
85
IT
80
20
86
14
PA/Secretaries
3
97
0
100
All other Staff
46
54
33
67
Q Please provide your breakdown of staff by each of the following departments
Industry Census 2015
82%
18%
Chair/CEO)/MD/Managing Partner
33%
67%
29%
Account Management
65%
Research Information
71%
29% Creative - Design
33%
71%
35%
76%
Project Management
67%
TV/Cinema/Radio Production
51%
27%
46%
49%
Senior Financial Staff
54%
New Business/Marketing/PR
Account/Strategic Planning
74%
67%
26%
Copywriters/Art Directors
Search/SEO
24%
73%
21
71%
29%
Digital Project Management
17%
83%
Human Resources/Training
Breakdown of position by gender
33% Creative - Digital
44%
56%
Digital UX/Information Architecture
80%
20% IT
22
Industry Census 2015
78% Male
22% Female
Percentage breakdown of board of directors
Industry Census 2015
Percentage Breakdown of Staff by Gender 2015
2013
Male
50
49
Female
50
51
Base: All IAPI member companies providing gender breakdown
Q Please provide your breakdown of staff by gender
Board of Directors - Agencies with an Irish Board
Total Yes - 89% No - 11%
Percentage of Agencies with an Irish Board
Creative Media
% Creative
% Media
% Total
2015
2014
2015
2014
2015
2014
Yes
88
95
91
80
89
91
No
12
5
9
20
11
9
Q Does your agency have an Irish board of Directors?
Average Size of Irish Boards and Gender Breakdown
Base: All IAPI member companies
2015
%
2014
%
Male
3.7
78
3.6
76
Female
1.1
22
1.2
24
Total Board Size
4.8
4.8
Q How many people sit on your agency’s Irish board of Directors?
23
24
Industry Census 2015
Maternity Benefit - Incidence of providing maternity leave 2014
2015
Yes - 73%
Base: All IAPI member companies
No - 27%
Yes - 53%
No - 47%
Maternity Benefit - Implementation
Base: All who offer paid maternity leave
% 2015 Paid a portion of salary and keeps social welfare payment
56%
Paid full salary and refunds social welfare payments to company
33%
Paid full salary and keeps social welfare payments
0%
Paid a portion of salary and refunds social welfare payment
19%
Q Which of the following best describes how you implement paid maternity leave?
Minimum Employment Period %
Base: All who offer paid maternity leave
2015
2014
More than 2 years
30
35
Up to 2 years
48
47
No minimum/depends on staff member
22
18
Q What is the minimum employment duration that applies before a staff member qualifies for paid maternity leave?
Industry Census 2015
27% No
73% Yes
Agencies providing maternity benefit
25
26
Industry Census 2015
Incidence of Paid Paternity leave
Base: All who provide paid paternity leave
2014
2015
Yes - 41%
No - 59%
Yes - 44%
Duration of Paid Paternity leave Up to 3 Days
Base: All who provide paid paternity leave Caution small base
13%
2015
5 Days
47%
10 Days
33%
14 Days Not specified
Up to 3 Days
7% N/A
7%
5 Days
43%
10 Days
36%
14 Days
7%
Not specified
7%
No - 56%
Q How many days paid paternity leave do you provide to staff?
2014
Industry Census 2015
Duration of paid paternity leave
27
Forecasts 2015 IAPI’s C to a continued turnarou Ireland’s advertising in industry turnover will in ahead and a similar leve growth for their own ag 78% of agencies are fo own business will grow average growth expecte
Census 2015 points und in the fortunes of ndustry. 86% believe ncrease in the year el (78%) forecast gency’s turnover. orecasting that their w in 2015 and the ed is 13%.
Industry Census 2015
Changes for the Industry in the Year Ahead
Base: All IAPI member companies
Increase →
5%
78%
81%
20%
Strongly Increase Increase
33%
19%
14%
Remain the same Decrease
← Decrease
3%
Strongly Decrease
47%
2013
2014
2015
Q How do you think the turnover for the advertising industry will change in the year ahead?
Grow →
Forecast for my own agency
60%
72%
Base: All IAPI member companies
78%
Grow 33%
22%
22%
2013
2014
Remain the same Decline
6% 7% ← Decline
30
2015
Q What is your personal forecast for your agency in 2015?
Industry Census 2015
Average expected growth/decline
31
Base: All those who predict growth/decline
Growth →
18
16%
23
29
13%
13%
Number of agencies that responded
Average percentage growth expected Average percentage decline expected
3.5% 15% ← Decline
2 2 2013
2014
2015
Q What percentage growth / decline do you expect for your agency in 2015?
Grow →
Expected staff levels for the year ahead
33%
56%
Base: All IAPI member companies
70%
Grow 60%
34%
7%
9%
2013
2014
Remain the same
30%
← Decline
Decline
2015
Q Do you expect your staff levels to increase, remain the same or decrease?
Average % of clients using procurement dept 39% 35%
2015 2014 2013
41% Q What percentage of clients use a procurement department for agreeing fees?
32
Industry Census 2015
Decline 0%
Stay Same 22%
Grow 78%
Future forecast for my agency
Industry Census 2015
2015 & Beyond IAPI’s Census 2015 points to a transformation in the fortunes of Ireland’s growing advertising industry There has been strong growth in the number of staff hired in 2014 and this is set to continue in 2015 with 7 in 10 agencies expecting their headcount to grow by the end of the year. Procurement remains a thorny issue - 39% of agency clients use a procurement department, a process that is widely believed to have a negative knock-on effect within the industry (i.e. margins, client relationships, service demands/ delivery etc.)
33
34
Industry Census 2015
Emerging Trends Over Past 2-3 Years Creative “Disconnect. The significant value of personal relationships are lost in the electronic world.” “More strict procurement. Longer credit terms." “Clients more procurement led. Clients still unwilling to take calculated risks, still very cautious. Imbalance in relationship still exists – supplier vs. partner." “Client service being expected to be ‘always on’.” "Younger marketing executives.” “Move to consolidate agencies, more services coming from one agency. Marketing Directors now replaced by Commercial Directors.”
Media “Short term planning for media spend (quarterly) gradually giving way to longer term planning (1+ years).” “Much more centralisation and globalisation of the Irish market with more and more accounts being awarded and controlled from outside the State. Convergence is also rapidly changing our client businesses and the services they require from agencies.” “Procurement led negotiations.” “More movement to procurement negotiations and pitch doctors/ auditors driving down rates leading to agencies pitching at unrealistic media costs.”
Industry Census 2015
Perceived Agency Challenges for 2015 Media Creative “Recruiting great staff. Higher overheads including rents, wages etc. Continuing pressure from procurement on rates.” “Pressure on hourly rates, increased competition in the creative space from traditionally non-creative agencies.” “War for talent especially as the economy improves, wages will rise. Increased tendency for clients to go to pitch as procurement departments continue to rise in power & seek to justify their existence. Increasing complexity for clients around the various offerings & services other agencies claim to provide." “A lot of work is moving out of the Irish economy (KBC Bank, Aer Lingus) and a lot of global clients are streamlining services to take place in other markets with small local adapts to global creative being used.”
“To continue to meet the demands from our clients while maintaining our margins. Retaining key staff in a very competitive employment market.” “To break through client & intermediary inertia and get them to look beyond the existing media agency hierarchy when considering which agencies to pitch for business.” “Increased focus on digital procurement. Margin pressures. Staff retention.” “Salary rates added to lack of suitably qualified digital staff.” “Increased client focus on digital. Availability of good quality digital staff. "Pressure on digital staff retention/salaries due to Google/ Facebook/LinkedIn presence. Continuing influence of procurement. Continued margin pressure."
35
36
Industry Census 2015
"Clients slowly coming into investment mode..."
Industry Census 2015
Perceived Agency Opportunities for 2015 Media Creative “Indigenous growth. Clients slowly coming into investment mode. Opportunity to make better content in digital environment.” “Leveraging the power of data to inform KPIs for clients and improve client retention. Deliver creative and innovative solutions that can evolve in real time in the digital eco-system.” “Our main opportunity is to go back to being a niche specialist agency working on a more consultancy basis.” “Increased focus and investment in new areas such as shopper marketing. Conversions across channels.”
“Advertising revenues increasing so new business and increased revenue from existing and new services.” “Programmatic. Data analysis and visualisation. Content creation.” “Data and technology advances. New business drive based on past experience. Growth of digital and data offerings. Growth of social.” “Grow existing client base. Embrace digital growth. Additional global networks wins.”
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Institute of Advertising Practitioners in Ireland 12 Clanwilliam Square, Dublin 2 01-6765991 www.iapi.ie @iapi_Updates