Introduction 02 Key Findings 06 Sector Overview 08 Agency Types Age Profile of Agency Staff Agency Income and Billings 15 Staff Overview 16 Breakdown

Transcription

1 Industry Census

2 Introduction 02 Key Findings 06 Sector Overview 08 Agency Types Age Profile of Agency Staff Agency Income and Billings 15 Staff Overview 16 Breakdown by Department Breakdown by Gender Board of Directors 23 Maternity Benefit 24 Forecasts Agency Forecasts Energing Trends Perceived Challenges 35 Percieved Opportunities 37

3 Introduction The Institute of Advertising Practitioners in Ireland (IAPI) is the trade body representing advertising agencies across the spectrum: creative, media, digital and full service. We commissioned Amárach Research to conduct a survey of our members to capture key industry data. The research also captured insights and forecasts from senior stakeholders in member organisations on trends within the industry.

4 4 Industry Census 2015 Industry Census IAPI had 54 member agencies drawn from the Irish advertising industry in March 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 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. 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 Number of full time staff employed in creative and media agencies

5 6 Industry Census 2015 Industry Census 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. 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 Boards are relatively small and women make up 22%, a slight drop on This compares favourably with the top Irish companies 1. 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 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. Numbers Employed Full Time Staff 1,611 1,545

6 Sector Overview There has been a very significant change in levels of confidence in the industry as a whole. The shift in the 3 years we have been doing this research is dramatic. In 2013 the first year of our research, nearly half of all agencies predicted a decrease in turnover. In 2015 no agency has. In fact 81% of agencies are predicting an increase in turnover.

7 10 Industry Census 2015 Industry Census 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. 1,095 Q What type of advertising agency do you represent? 516 Total Number of Full-Time Staff Employed Base: All IAPI member companies , , ,281 Q What is the total number of staff employed in your agency? Average Number of Full-Time Staff Employed Base: All IAPI member companies Creative Media Total % Creative & Full Service 32% Media 2015 Min Max Creative Media Total Number of full time employees by agency type Q What is the total number of full-time staff employed in your agency?

8 12 Industry Census 2015 Industry Census 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. Level of Staff Churn Number of Employees Creative Agencies Q What is the total number of staff employed in your agency? Media Agencies Number of Employees Age Profile of Agency Staff Creative Media Average Age Creative Media Hired Left to stay within industry Left to leave industry Let go/contract terminated Q In the year ending December 2014, how many of your staff were % Creative % Media % Total Under 21 * * * * Q What proportion of your staff fit into the following age categories?

9 14 Industry Census 2015 Industry Census Annual Gross Income Creative Media Gross Creative Income (in millions) Gross Creative income is defined as the total amount of fees, commission, markup s etc. earned during the year. Media billings is defined as the total amount of client investment put through your agency for the purchase of media/ media activities. 0 Creative Agencies 33,963, ,936,814 Media Billings (in millions) Average Creative Agency Turnover [in Millions] Average Media Agency Billings [in Millions] 0 Media Agencies Gross Income % Average Gross Creative Income* 2,936,814 3,330, Average Media Billings* 33,963,637 32,156,310 6 Total Gross Creative Income* 58,736,271 66,601, Total Media Billings* 407,563, ,875,715 6 * Average based on direct agency comparisons for 2014 and 2015 Agency income - creative and media agencies 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?

10 Staff Overview We are an industry of SMEs with the majority of agencies employing 50 people or less. Numbers directly employed by IAPI member agencies in 2015 was 1,611 full time staff compared to 1,545 in 2014, an increase of 4.1%. Three quarters of all agencies expect their staff levels to increase by the end of There has been the greatest level of new hires in the industry for the last 3 years; 357 people were hired.

11 18 Industry Census 2015 Industry Census Breakdown of Staff by Department Breakdown of Staff by Department Creative Media 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% Number % Number % Total % Chair/CEO)/MD/Managing Partner Other Executive Management Account Management New Business/Marketing/PR * 23 1 Account/Strategic Planning Research Information 4 * 2 * 6 * Media Planning & Buying Search/SEO 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% Media Research 1 * * Other Media 3 * * Creative - Copywriters/Art Directors Creative - Digital * 50 3 Creative - Design Other Creative/Studio Creative Services inc Art & Print Buying Project Management * 25 2 Digital Programmers/Web Designers Digital Production Digital Project Management Digital UX/Information Architecture Other Digital TV/Cinema/Radio Production Production Administration Senior Financial Staff Junior Financial Staff Human Resources/Training 2 * * IT 4 * PA/Secretaries All other Staff Q Please provide your breakdown of staff by each of the following departments Q Please provide your breakdown of staff by each of the following departments

12 20 Industry Census 2015 Industry Census Breakdown of Position by Gender - IAPI only ask for gender breakdown of staff every 2 years Male Female % 2015 % 2013 Chair/CEO)/MD/Managing Partner Base: All IAPI member companies providing gender breakdown 82% 18% 29% 71% 73% 27% 46% 54% Other Executive Management Account Management *Question changed in 2015 Chair/CEO)/MD/Managing Partner Account Management New Business/Marketing/PR Account/Strategic Planning New Business/Marketing/PR Account/Strategic Planning Research Information Media Planning & Buying Search/SEO Media Research Other Media Creative - Copywriters/Art Directors % 67% Research Information 65% 35% Search/SEO 74% 26% Copywriters/Art Directors 67% 33% Creative - Digital Creative - Digital Creative - Design Other Creative/Studio Creative Services inc Art & Print Buying Project Management Digital Programmers/Web Designers Digital Production % 29% 24% 76% 71% 29% 44% 56% Digital Project Management Creative - Design Project Management Digital Project Management Digital UX/Information Architecture Digital UX/Information Architecture Other Digital TV/Cinema/Radio Production Production Administration Senior Financial Staff * n/a n/a Junior Financial Staff * n/a n/a Human Resources/Training IT PA/Secretaries % 67% TV/Cinema/Radio Production 51% 49% Senior Financial Staff 17% 83% Human Resources/Training 80% 20% IT All other Staff Q Please provide your breakdown of staff by each of the following departments Breakdown of position by gender

13 22 Industry Census 2015 Industry Census Percentage Breakdown of Staff by Gender Base: All IAPI member companies providing gender breakdown Male Female Q Please provide your breakdown of staff by gender Board of Directors - Agencies Total with an Irish Board Yes - 89% No - 11% 78% Male 22% Female Percentage of Agencies with an Irish Board % Creative % Media % Total Yes No Creative Media Q Does your agency have an Irish board of Directors? Average Size of Irish Boards and Gender Breakdown Base: All IAPI member companies Percentage breakdown of board of directors 2015 % 2014 % Male Female Total Board Size Q How many people sit on your agency s Irish board of Directors?

14 24 Industry Census 2015 Industry Census Maternity Benefit - Incidence of providing maternity leave Base: All IAPI member companies Yes - 73% 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? 27% No 73% Yes Minimum Employment Period % Base: All who offer paid maternity leave More than 2 years Up to 2 years No minimum/depends on staff member Agencies providing maternity benefit Q What is the minimum employment duration that applies before a staff member qualifies for paid maternity leave?

15 26 Industry Census 2015 Industry Census Incidence of Paid Paternity leave Base: All who provide paid paternity leave Yes - 41% No - 59% Yes - 44% No - 56% Duration of Paid Paternity leave Base: All who provide paid paternity leave Caution small base Up to 3 Days 13% Days 10 Days 33% 47% Days Not specified N/A 7% Up to 3 Days 5 Days 10 Days 14 Days Not specified 7% 7% 7% 36% 43% Q How many days paid paternity leave do you provide to staff? Duration of paid paternity leave

16 Forecasts 2015 IAPI s Census 2015 points to a continued turnaround in the fortunes of Ireland s advertising industry. 86% believe industry turnover will increase in the year ahead and a similar level (78%) forecast growth for their own agency s turnover. 78% of agencies are forecasting that their own business will grow in 2015 and the average growth expected is 13%.

17 30 Industry Census 2015 Industry Census Changes for the Industry in the Year Ahead Base: All IAPI member companies Average expected growth/decline Base: All those who predict growth/decline 5% Growth Number of agencies that responded Increase 20% 33% 78% 19% 3% 81% 14% Strongly Increase Increase Remain the same Decrease Strongly Decrease Decline 16% 13% 13% 3.5% 2 15% Average percentage growth expected Average percentage decline expected Decrease 47% Q What percentage growth / decline do you expect for your agency in 2015? Expected staff levels for the year ahead Base: All IAPI member companies Q How do you think the turnover for the advertising industry will change in the year ahead? Forecast for my own agency Base: All IAPI member companies Grow 33% 56% 70% Grow 60% 34% 30% Remain the same Decline Grow 60% 72% 78% Decline 7% 9% Q Do you expect your staff levels to increase, remain the same or decrease? Grow 33% 22% 22% Remain the same 7% 6% Decline Average % of clients using procurement dept 2015 Decline % 39% 41% Q What is your personal forecast for your agency in 2015? Q What percentage of clients use a procurement department for agreeing fees?

18 32 Industry Census 2015 Industry Census Decline 0% Stay Same 22% Grow 78% 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.) Future forecast for my agency

19 34 Industry Census 2015 Industry Census Emerging Trends Over Past 2-3 Years Perceived Agency Challenges for 2015 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. 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. Move to consolidate agencies, more services coming from one agency. Procurement led negotiations. Marketing Directors now replaced by Commercial Directors. More movement to procurement negotiations and pitch doctors/ auditors driving down rates leading to agencies pitching at unrealistic media costs. 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. Media 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."

20 36 Industry Census 2015 Industry Census 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. 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. Increased focus and investment in new areas such as shopper marketing. Conversions across channels. "Clients slowly coming into investment mode..."

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