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Institute of Advertising Practitioners in Ireland

Industry Census 2014in association with Amárach Research

Institute of Advertising

Practitioners in Ireland

8 Upper Fitzwilliam Street, Dublin 2.

(01) 676 5991

www.iapi.ie

www.adfx.ie

@IAPI_Updates

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Contents

Introduction 4

Overview of Sector 9

Agency Income and Billings 13

Board of Directors 16

Staff breakdown 21

Age profiles 24

Forecasts 2014 31

Emerging Trends 35

Perceived Opportunities 36

Perceived Challenges 37

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Summary of key findings: numbers employed, confidence levels, challenges and opportunities ahead.

Introduction

54 5

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.

Of the 49 IAPI members invited to participate, data was submitted by 45

agencies, representing an excellent response rate of 92%.*

Total Creative Media

Responses 32 22 10

Agencies Represented 45 23 22

The survey was conducted online. Fieldwork took place in April/May 2014.

Managing Directors or Financial Directors submitted the data.

IAPI had 49 member agencies in April 2014.

[IAPI has 52 members as of July 2014]

Acorn

Atomic

Bloom

Boys and Girls

Brando

Carat

Cawley Nea/TBWA

Chemistry

Clear Blue Water

DDFHB

Eighty Twenty

Firstcom

Focus Advertising

Gaffney McHugh

H+A Group

Havas

Havas Media Ireland

ICAN

In the Company of Huskies

Initiative

iProspect

Irish International

Javelin Group

Lucidity

Maxus

McCannBlue

MEC Global

Mediacom

MediaVest

MediaWorks Ltd

Mindshare

Ogilvy

OMD

Owens DDB

Parker Advertising

Persuasion Republic

PHD

Pierce Media and Advertising Ltd

Publicis Dublin

Publicis D

Radical

Real Nation

Rothco

Rubicon

Shanley Media Solutions

Southern Advertising

Starcom

Target McConnells

Thinkhouse

Vizeum

Zenith Optimedia

54 5

*Some agencies responded as a group

• Dentsu Aegis responded on behalf of Carat, iProspect, Lucidity and Vizeum.

• Core Media responded on behalf of Clear Blue Water, Mediaworks, Mediavest, Radical, Shanley Media and Starcom.

• Group M responded on behalf of Maxus, MEC, Mediacom and Mindshare.

• Ogilvy responded on behalf of Ogilvy and Y&R.

Since the research was concluded three new agencies, Thinkhouse, Real Nation

and Publicis D joined IAPI.

Key Findings

Numbers Employed

Numbers directly employed by IAPI member agencies in 2013 was

1,545, compared to 1,281 in 2012, an increase of 20.6%.

More people are employed in creative agencies (including digital creative),

964 vs media agencies 581.

More people were hired in 2013 than 2012 – an increase of 13.4% in new hires.

964 full time employees in creative agencies in 2013

vs 787 in 2012 = +22% increase in staff.

581 full time employees in media agencies in 2013

vs 494 in 2012 = +17% increase in staff.

This means we have exceeded pre-recessionary levels of employment,

based on our 2007 survey which showed 1,381 employed.

76 7

Age and Education Breakdown

The average age of employees in the industry is 35.

The profile of those working in the industry is changing, with higher numbers of

staff educated to Masters level. Anecdotally, this could be a mixture of new hires

and people who are working as well as studying a part-time masters programme.

Board Composition

We requested information on the composition of company boards for the first

time. Boards are relatively small with male to female ratio of 75:25.1

Maternity/Paternity Leave

This was also the first year that we surveyed members on the issue of

maternity/paternity leave. It is encouraging that many agencies offer some

form of paid leave and interesting to note that there are a variety of practices in

place. A significant number of agencies also offer paid paternity leave.

Confidence In The Sector For The Year Ahead

• There has been a very significant shift in levels of confidence in the industry as a whole. Optimism is up and pessimism is down.

• 78% of those surveyed estimated turnover for the industry as a whole will increase in 2014. This is a massive shift on 2012 when only 20% of agency heads predicted an increase.

• 72% forecast that their own business will grow in 2014 and the average growth expected is 13%.

• More than half of all agencies expect their staff levels to increase by the end of 2014.

1 This compares favourably with wider industry. Irish Times Top 1000 companies survey May 2014 says 11% of those surveyed have a female at board level. The top 25 biggest companies have 25% female representation at board level.

76 7

Challenges and Oppor tunities

There are similar issues across the spectrum of creative

and media agencies:

• Cost pressures – the need to maintain and increase hourly rates

• Staff recruitment and retention

• Investment in pitches – time and money

On a more positive note

• Returning confidence of clients

• Growth in digital billings and revenue

Conclusion

IAPI’s Census 2014 points to a transformation in the fortunes of Ireland’s

advertising industry.

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 improvements in some hourly rates and

other indicators of growing customer demand, while most are looking to staff

– up for recovery and growth.

However, there are a number of caveats to this otherwise positive picture –

staff turnover is on the increase, reflecting more competition for skilled staff

both within the industry and from other industries. There remains significant

pressure on rates and the cost of new business pitching in Ireland

remains high.

Tania Banotti ceo

IAPI

July 2014

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Agency type, numbers employed, breakdown of staff by department, composition of Board of Directors,creative agency income and media agency billings.

Overview of the Sector

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IAPI Play

Bat for your team at the ping pong Summer Party. Become an informed critic at our monthly Film Club. Play for your life at Battle Of The Bands.

10 1111

Profile of Sample – Agency Type

28% Media Agencies (including Digital)

3% Full Service Agencies

69% Creative Agencies (including Digital)

What type of advertising agency do you represent?*Question changed in 2014

Average Number of Full-Time Staff Employed by X Agency Type

2014 2013

Min Max Min Max

Total 2 167 2 137

Creative 2 119 3 96

Media 7 167 2 137

What is the total number of staff employed in your agency?

(Base: All IAPI member companies)

1312 13

Number of Full-Time Employees X Agency Type

0

20

40

60

80

100

120

140

160

180

0 5 10 15 20 25

Num

ber

of E

mpl

oyee

sN

umbe

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Em

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ees

Number of Agencies

0

20

40

60

80

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180

0 5 10

Creative

Media

(Base: All IAPI member companies)

Number of Agencies

1312 13

Average Gross Creative Agency Income& Media Agency Billings

Average Gross Creative Income

€3,101,508

Average Media Billings

€39,696,672

Median* Gross Creative Income

€5,569,399

Median* Media Billings

€71,577,500

*The median is the middle point between highest and lowest volume turnover.

In order for us to determine what we as an industry contribute to the economy, please can you supply the following income details?

Creative agencies please supply gross income. (Gross income is defined as the total amount of fees, commission, mark-ups etc. earned during the year).

Media agencies please supply billings. (Billings is defined as the total amount of client investment put through your agency for the purchase of creative/media activities during the year).

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Annual Income

e M

illio

ns

Number of Agencies

0

2

4

6

8

10

12

0 5 10 15 20 25

e M

illio

ns

Number of Agencies

0

20

40

60

80

100

120

140

0 5 10

(Base: All IAPI member companies)

Creative AgencyGross Income

Media Agency Billings

*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 the agency for the purchase of media/media activities in the given 12 months.

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IAPI Advocate

The IAPI AAI Pitch Guidelines are the industry standard. We track pitches so members are protected.

CopyClear ensures that advertising standards are adhered to without compromising the quality of campaigns.

IAPI represent the industry to government and on the boards of the ASAI, JNRS and JNLR. We’re championing cross media integrated research in Ireland.

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Incidence of having a Board of Directors

Numbers with an Irish Board

Yes91%

No9%

Total

Yes95%

No5%

Creative

Yes80%

No20%

Media

Does your agency have an Irish board of Directors?*New question in 2014

There were 29 agency responses (21 Creative and 8 Media) in relation to having a board and the total number of board members recorded breaks down as follows:

Total Creative Media

Total Directors on Irish Boards 140 87 53

Male 106 66 40

Female 34 21 13

The average was calculated by dividing the above total by the relevant number of companies.

Average Size of Irish Boards

Total Creative Media

Board Size 4.8 4.1 6.6

Male 3.6 3.1 5.0

Female 1.2 1.0 1.6

The Irish Times Top 1000 survey suggests female participation on the boards of the top 25 companies is 13%.

How many people sit on your agency’s Irish Board of Directors? And how many of these board members are male/female?

(Base: All IAPI member companies)

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1918 19

1918 19

Breakdown of staff by department, age profile of employees, level of education, staff churn, maternity and paternity leave.

Main Findings

20 2121

20 2121

% Breakdown of Staff by Department

Chair/CEO/MD/Managing Partner 4 5

Other Executive Management 5 7

Account Management 22 24

New Business/Marketing/PR 1 1

Account/Strategic Planning 3 5

Research/Information 1 1

Media Planning & Buying 12 12

Search/SEO 2 4

Media Research * 0 1

Other Media 1 2

Creative – Copywriters/Art Directors 12 11

Creative – Digital 3 3

Creative – Design 4 3

Other Creative Studio 4 4

Creative Services inc Art & Print Buying 1 1

Project Management 1 1

Digital Programmers/Web Designers 3 2

Digital Production 1 2

Digital Project Management 1 1

Digital UX/Information Architecture 1 1

Other Digital 3 4

TV/Cinema/Radio Production 1 2

Production Administration 1 1

Senior Financial Staff 3 N/A

Junior Financial Staff 5 N/A

Human Resources/Training * 0 1

IT 1 1

PA/Secretaries 2 3

All other staff 1 3

2014 2013

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

5% 10%

15%

20%

25%

(Base: All IAPI member companies)

2323222222

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IAPI regularly run day courses designed for creatives, executives, or media folk aimed at tackling client procurement depts, perfecting the art of pitching, learning how to write killer creative briefs and selling creative work.

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% Breakdown of Staff by Department – Creative & Media

Total Staff (1545) Creative (964) Media (581)

Number % Number % Number %

Chair/CEO/MD/Managing Partner 63 4% 27 3% 36 6%

Other Executive Management 82 5% 42 4% 40 7%

Account Management 346 22% 264 27% 82 14%

New Business/Marketing/PR 9 1% 4 * 5 1%

Account/Strategic Planning 46 3% 37 4% 9 2%

Research/Information 20 1% 3 * 17 3%

Media Planning & Buying 192 12% 10 1% 182 31%

Search/SEO 31 2% 7 1% 24 4%

Media Research 2 * 0 0% 2 *

Other Media 19 1% 8 1% 11 2%

Creative – Copywriters/Art Directors 186 12% 175 18% 11 2%

Creative – Digital 41 3% 33 3% 8 1%

Creative – Design 67 4% 59 6% 8 1%

Other Creative Studio 55 4% 53 5% 2 *

Creative Services inc Art & Print Buying 12 1% 11 1% 1 *

Project Management 14 1% 11 1% 3 1%

Digital Programmers/Web Designers 46 3% 31 3% 15 3%

Digital Production 14 1% 14 1% 0 0%

Digital Project Management 16 1% 9 1% 7 1%

Digital UX/Information Architecture 10 1% 9 1% 1 *

Other Digital 54 3% 14 1% 40 7%

TV/Cinema/Radio Production 19 1% 19 2% 0 0%

Production Administration 10 1% 10 1% 0 0%

Senior Financial Staff 47 3% 28 3% 19 3%

Junior Financial Staff 72 5% 40 4% 32 6%

Human Resources/Training 6 * 3 * 3 1%

IT 13 1% 8 1% 5 1%

PA/Secretaries 34 2% 22 2% 12 2%

All other staff 19 1% 13 1% 6 1%

Please provide your breakdown of staff by each of the following departments. *less than 1% / no response

(Base: All IAPI member companies)

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(Base: All IAPI member companies)

24

Age Profile of Agency Staff X Type of Agency

(Base: All IAPI member companies)

Average Age

2014 2013

Creative 36 34

Media 34 34

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

Highest Level of Education Achieved by Those Working in Member Agencies

PHD 0.4% 0.2%

Masters 14% 8.5%

Postgraduate 9.1% 9.6%

Degree 43.1% 47.7%

Diploma 13.6% 16.7%

Leaving Cert 11% 11.3%

Other 1.4% 1%

Don’t Know 10.5% 5.2%

2014 2013

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

Total % Creative % Media %

2014 2013 2014 2013 2014 2013

Under 21 - 1 1 1 - -

21-25 12 11 10 10 14 14

26-30 26 28 22 26 32 33

31-40 40 39 43 40 35 36

41-50 15 15 17 18 13 11

51-60 6 5 7 5 4 5

61+ 1 1 1 1 2 1

25

24 25

Level of Staff Churn for Y/E 2013

261

230

127

8569

41 4435

Hired Left to stay within the industry

Left to leave the industry

Let go/contract terminated

2014 2013 2014 2013 2014 2013 2014 2013

Creative 146 152 85 47 44 24 33 30

Media 115 78 42 38 25 17 11 5

(Base: All IAPI member companies)

2014 2013

In the year ending December 2013, how many of your staff were…

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Maternity/Paternity Benefits within IAPI Member Agencies

Incidence of providing paid Maternity leave

No47%

Yes53%

Incidence of providing paid Paternity leave

No56%

Yes44%

(Base: All IAPI member companies)

How is paid maternity leave implemented?

Varies/depends on seniority of staff member 47%

Paid a portion of salary and keeps social welfare payments 35%

Paid full salary and refunds social welfare payments to company 18%

Paid full salary and keeps social welfare payments 12%

Paid a portion of salary and refunds social welfare payments to company 12%

Which of the following best describes how you implement paid maternity leave? Tick all that apply.

(Base: All who offer paid maternity leave)

59%of companies provide paid maternity leave. The 2013 IBEC Maternity Benefit report

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28 29

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Our effectiveness hub www.adfx.ie provides information on the most effective advertsing in Ireland.

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Turnover Changes, Growth & Decline, Challenges, Opportunities and Trends

Forecast for 2014

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Estimated Turnover Changes for the Industry in the Year Ahead

How do you think the turnover for the advertising industry will change in 2014?

Future Forecast for My Agency

Historical data suggests that business owners, managers and stakeholders are likely to be optimistic about their own business whilst being less positive about the outlook of their industry. (Base: All IAPI member companies)

Gro

wD

eclin

e

And what is your personal forecast for your agency in 2014?

2014

2013

Rem

ain

the

sam

e 22%

33%

72%

60%

6% 7%

2014

2013

2014

2013

2014

2013

2014

2013

19%33%

3%

47%

Incr

ease

Stro

ngly

Incr

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Dec

reas

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rong

ly

Dec

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2014

2013

2014

2013

2014

2013

78%

20%

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Expected Levels of Growth/Decline in 2014

Average % Growth Expected

Expected Staff Levels for Year Ahead Will ....

Average % Decline Expected

Base: (All those who predict either growth/decline)

*N=number of agencies that responded.

By the end of 2014, do you expect your agency staff levels to increase, remain the same or decrease compared to current levels?

What percentage growth do you expect for your agency in 2014?

What percentage decline do you expect for your agency in 2014?

2014

2013Gro

wRe

mai

n th

e sa

me

Dec

line

34%

60%

56%

33%

9% 7%

2014

2013

2014

2013

16%

2013

15%

2014

2013

3.5%

N=2*

2014

13%

N=23* N=18* N=2*

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Emerging Trends Over Past 2-3 years

“Placing more emphasis on the role

of media in total communications

planning. Clients being persuaded

by pitch doctors to tender business,

to drive prices down.”

“Client relationships are no longer

as important as before. Decisions

are driven by procurement needs

in many cases and agency

relationships are viewed as

short term rather than long term

partnerships.”“Clients appear to depend more

heavily on agency services

while being ever less willing to

acknowledge these as legitimate

agency costs.”

“Faster turnaround and scope

creep. Also continuous

focus on digital channels.”

“Reduction in loyalty. More project

driven relationships. Very price

sensitive. More inclined to work with

other agencies.”

“Increased need for specialist

services.”

Creative Agencies

Media Agencies

“Much more aggressive and much

less loyal. Aggressive on cost and

expectation and less committed to

supporting their agency in their

efforts to deliver excellence.”

“Young, inexperienced clients who

don’t really understand or value

marketing or agencies and put way

too much value on social media.”

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Perceived Opportunities for 2014

“To challenge the existing media

agency hierarchy and to win

business from them.”

“Growing business particularly in

the digital arena.”

“Strong pipeline for new business.

Growth in our digital team billings

and revenues.”

“Diversification into new areas –

sponsorship, data, learning/

development. Also to grow our

research business.”

“Growth in scope of services and

redefining the agency’s proposition.”

“Organic growth plus benefits and

fall-out of mergers and acquisitions.

A returning confidence in existing

clients.”

“Growing our revenue from clients

outside of Ireland.”

Creative Agencies

Media Agencies

“Digital expansion. International

opportunities with existing clients.

In-house broadcast production.”

“Increased digital spends. Winning

more through-the-line clients

and increasing our traditional

credentials. More and more clients

need to understand the need for

digital media and creative to be

under one roof to be really effective

and efficient.”

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3736 37

Perceived Challenges for 2014

“Increasing hourly rates productivity

improvements.”

“Salary costs/remuneration

packages. Pressure on fees and

trying to reduce our media costs.”

“Economic environment and

pressure on costs.”

“Staff retention, pressure on staff

costs. Client pressure on margins.”

“Public procurement &

tendering process.”

“Managing growth of agency. Staff

retention. Client profitability.”

“The decline in advertising in Ireland

from clients with international

brands and the increasing reliance

on Irish brands.”

“Gearing up and the strain that

may put on cashflow.”

Creative Agencies

Media Agencies

“Maintaining a reasonable hourly

rate so accounts can be staffed

with experienced people.”

“Attracting key staff within the Irish

market. Adapting our model quickly

enough to technology changes

within our industry. Continuing

investment required for pitching

for new business. Pressure to

reduce rates within industry from

procurement and other agencies.”

38 3938

IAPI Provoke

Rabbit on, or raise awareness at Rant Night. Give your opinion of winning campaigns at Cannesalysis, or sing your pet peeve in adland’s first ever Complaints Choir.

38 3938

Created and Designed by

All Photography: Finn Richards

Except the Pineapple image courtesy

of Charlotte Audrey Owen-Meehan

Illustrations: Markus Magnusson

Designed and Created by:

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II

Institute of Advertising

Practitioners in Ireland

8 Upper Fitzwilliam Street, Dublin 2.

(01) 676 5991

www.iapi.ie

www.adfx.ie

@IAPI_Updates