iapi census report

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Industry Census 2013

Institute of Advertising Practitioners in Ireland

in association with Amárach Research

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

Forecasts for 2013 25

Factors of Influence 29

ContentsPage

IAPI Industry Census 20131

1 IAPI conducted a more limited industry census in 2007. 2 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 Ireland3 Since the research concluded, five new agencies joined IAPI.

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 LanguageMcCann Dublin MEC Global Mediacom Mediavest Mediaworks Mindshare Ogilvy Dublin OMD Ireland Owens DDB Parker PHDPierce Media Publicis Dublin Radical Rothco

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

Introduction to IAPI Census 2013The 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


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

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.

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.

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 There are less IAPI member agencies: 48 in 2007 compared to 43 in 2013.5 Marketing Institute of Ireland, Salary and Market Trend Report 2012-13.

Key Findings

Numbers employed

Growth

Age breakdown


Women in the industry – breakdown by gender

Confidence in the sector for the year ahead

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

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

• There’s a slight disparity between media and creative agencies. Creative agencies have 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.

• 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 IPA Industry Census 2012.


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.

Tania BanottiCEO

Institute of Advertising Practitioners in Ireland

September 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 LanguageMcCann Dublin MEC Global Mediacom

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


Profile of Sample

Min. Max.

2 137

3 96

2 137

0 6

0 4

0 6

0 25

0 25

0 3

Full timeTotal

Creative

Media

Part time

Freelance

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

Q. What type of advertising agency do you represent?

Agency Type

Average Number of Staff employed in each Agency

31

34

27

3

4

1

1

1

1

Creative and Media 3%

Creative including Digital 54%

Media including Digital 43%

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


Mean €

Median*€

Creative/Digital Agency 4,633,778 4,873,154

Media/Digital Agency 43,579,714 70,208,000

Average Agency Income/Billings

* 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

Scatter Graph Illustration of Advertising Industry by Gross Income/Billings

Creative Agency Gross Income

Media Agency Billings

00

1

2

3

4

5

6

7

8

9

10

Millions

5 10 15 20

Creative Agencies Turnover

00

20

40

60

80

100

120

140

160

Millions

5 10 15

Media Agencies Turnover

00

1

2

3

4

5

6

7

8

9

10

Millions

5 10 15 20

Creative Agencies Turnover

00

20

40

60

80

100

120

140

160

Millions

5 10 15

Media Agencies Turnover

€ M

illio

ns€

Mill

ions

*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.

Number of Agencies

Number of Agencies


Industry Census:Staff Turnover, Education & Demographics

Section 1

Chair/CEO/MD/Managing Partner

Other Executive Management

Account Management

New Business/Marketing/PR

Account/Strategic Planning

Research/Information

Media Planning and Buying

Search/SEO

Media Research

Other Media

Creative - Copywriters/Art Directors

Creative - Digital

Creative - Design

Other Creative/Studio

Creative Services incl. Art & Print Buying

Project Management

Digital Programmers/Web Designers

Digital Production

Digital Project Management

Digital UX/Information Architecture

Other Digital

TV/Cinema/Radio Production

Production Administration

Finance/Payroll/Cashiers

Human Resources/Training*

IT

PA/Secretaries

All other staff

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

Breakdown of Staff by Department

7%

1%

5%

1%

12%

4%

1%

2%

11%

3%

3%

1%

1%

2%

4%

2%

1%

1%

4%

2%

1%

8%

1%

1%

3%

3%

24%

30%5% 10% 15% 20% 25%

5%

7%

2%

2%

1%

1%

4%

2%

1%

8%

1%

1%

3%

3%


IAPI Census IPA Census**

Total % Male % Female % Total % Male % Female %Chair/CEO/MD/Managing Partner 5 87 13 3 78 22Other Executive Management 6 69 31 3 72 28Account Management 23 30 70 19 38 62New Business/Marketing/PR 1 42 58 2 28 72Account/Strategic Planning 4 43 57 5 56 44Research/Information 1 50 50 1 51 49Media Planning and Buying 12 50 50 13 46 54Search/SEO 3 50 50 4 60 40Media Research 1 - 100 1 40 60Other Media 2 55 45 2 45 55Creative - Copywriters/Art Directors 11 67 33 9 76 24Creative - Digital 2 70 30 1 82 18Creative - Design 2 71 29 3 75 25Other Creative/Studio 4 64 36 4 80 20Creative Services incl. Art & Print Buying * 67 33 1 46 54Project Management * 20 80 2 43 57Digital Programmers/Web Designers 2 90 10 2 85 15Digital Production 1 89 11 1 70 30Digital Project Management 1 50 50 1 39 61Digital UX/Information Architecture * 60 40 * 77 23Other Digital 3 50 50 3 56 44TV/Cinema/Radio Production 1 47 53 3 38 62Production Administration 1 29 71 1 34 66Finance/Payroll/Cashiers 7 33 67 6 36 64Human Resources/Training* * 15 85 1 10 90IT 1 86 14 1 87 13PA/Secretaries 2 - 100 3 4 96

All other staff 2 33 67 6 45 55

Total (%) Total (Number)

100 (1,281)

49 (629)

51 (652)

100 (20,491)

51 (10,449)

49 (10,042)

Breakdown of Department by Position and Gender

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


Chair/CEO/MD/Managing Partner

Other Executive Management

Account Management

New Business/Marketing/PR

Account/Strategic Planning

Research/Information

Media Planning and Buying

Search/SEO

Media Research

Other Media

Creative - Copywriters/Art Directors

Creative - Digital

Creative - Design

Other Creative/Studio

Creative Services incl. Art & Print Buying

Project Management

Digital Programmers/Web Designers

Digital Production

Digital Project Management

Digital UX/Information Architecture

Other Digital

TV/Cinema/Radio Production

Production Administration

Finance/Payroll/Cashiers

Human Resources/Training*

IT

PA/Secretaries

All other staff

Breakdown of Department By Position and Gender

30%

50%

100%

70%

67%

89%

50%

33%

100%

33%

69%

43%

50%

67%

64%

90%

60%

29%

86%

87% 13%

31%

70%

58%

57%

50%

50%

50%

45%

33%

30%

29%

36%

33%

80%

10%

50%

11%

40%

50%

53%

71%

67%

14%

85%

67%

42%

50%

55%

71%

20%

50%

47%

15%

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

Male Female


Breakdown of Staff by Discipline (Creative/Digital Agencies)

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

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 17Other Executive Management 40 5 30 75 10 25Account Management 190 24 54 28 136 72New Business/Marketing/PR 7 1 2 29 5 71Account/Strategic Planning 31 4 14 45 17 55Research/Information 1 * 1 100 0 -Media Planning and Buying 23 3 21 91 2 9Search/SEO 10 1 6 60 4 40Media Research 5 1 - - 5 100Other Media 14 2 8 57 6 43Creative - Copywriters/Art Directors 134 17 90 67 44 33Creative - Digital 29 4 20 69 9 31Creative - Design 23 3 15 65 8 35Other Creative/Studio 49 6 32 65 17 35Creative Services incl. Art & Print Buying 5 1 3 60 2 40Project Management 5 1 1 20 4 80Digital Programmers/Web Designers 17 2 15 88 2 12Digital Production 18 2 16 88 2 12Digital Project Management 7 1 3 43 4 57Digital UX/Information Architecture 5 1 3 60 2 40Other Digital 24 3 15 63 9 37TV/Cinema/Radio Production 15 2 7 47 8 53Production Administration 7 1 2 29 5 71Finance/Payroll/Cashiers 52 7 17 33 35 67Human Resources/Training* 3 * 1 33 2 67IT 6 1 6 100 0 -PA/Secretaries 12 2 0 - 12 100All other staff 26 3 9 35 17 65


Breakdown of Staff by Discipline (Media/Digital Agencies)

IAPI Total (Base: 494) IAPI Male (Base: 214) IAPI Female (Base: 280)


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 - - - - - -

Other Digital 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 100All other staff 2 * - - 2 100

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


Average IAPI Agency Age: 35

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

Average Age of Staff Working in IAPI Member Agencies

Profile of IAPI Staff by Age and Type of Agency

Average Creative Agency Age: 37

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

Average Media Agency Age: 34

Total Male Female


Under 21 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%

Total Creative Media


Under 21 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%


Degree

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

Average Level of Education achieved by those working in IAPI Member Agencies

Don’t Know 5%

Other 1%

Diploma 16.7%

Leaving Cert. 11.3%

Degree 47.7%

Masters 8.5%

Postgraduate 9.6%

Ph. D. 0.2%


Hired Left to move within the industry

Left the industry

Let go/contract terminated

Left to emigrate

152

78

4738

17 1224

175

30

85

41 35 29

230

Level of Staff Turnover in IAPI Agencies at Year Ended 2012

CreativeMedia

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


176 C

Industry Census:Forecasts for 2013

Section 2

Forecast 2013

We feel positive about the future

• 60% of agencies forecast growth

in their agency in 2013. • 33% expect staff levels to increase.

• Most posts in our industry are full-time.


Estimated Changes in Turnover for the Whole Industry in 2013

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?

IAPI CensusEACA* Data

47%

29%

-%

8%

33%

29%

34%

20%

-%-%

Strongly Increase

Increase Remainthe Same

Strongly Decrease

Decrease

60%

50%

40%

30%

20%

10%


Future Forecasts for My Agency in 2013

Growth

60%

33%

7%

Remain the Same Recession/Decline

EACA* Forecast for Industry in 2013

Growth

43%35%

22%

Remain the Same Recession/DeclineHistorical 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


Expected Levels of Growth/Decline for Agencies in 2013

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

Expected Staff Levels for 2013

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

Increase 33%

Remain Constant 60%

Decrease 7%

Decline Expected

Growth Expected

16% 3.5%


I N

11 59

Time pressure

Cost pressure

Pressure on smaller agencies

Procurement in the agency selection process

Clients thinking and acting short-term

Globalisation

Shift of decision making to abroad

Rising importance of e-business

Clients’ personnel turnover (marketing & CEO’s)

Expenditure on new business

Data based marketing communications

Prohibition/restriction on advertising

Business/management consultants

Lack of qualified staff

Mergers/co-operation among clients

Competition from lower cost economies/BRIC countries

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

EACA*Strong/very strong 4/5

80% 34%

83%

25%

46%

71%

42%

30%

42%

34%

42%

23%

9%

46%

21%

30%

76%

67%

64%

63%

60%

60%

53%

47%

43%

37%

33%

26%

24%

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?

*


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