Advertising Agencies 2000
Strategic Market Intelligence for the Professional
Market Assessment International
The information in this publication, although believed to be accurate at the time of writing, is not guaranteed.
ISBN 1-86111-XXX-X
MAI Strategic Market Report
ADVERTISING AGENCIES 2000
Published by Market Assessment International February 2000
CONTENTS
1. INTRODUCTION.................................................................................................... 1 1.1 METHODOLOGY ................................................................................................... 2 2. DEFINITION ........................................................................................................... 3 3. EXECUTIVE SUMMARY ..................................................................................... 4 3.1 MARKET SECTORS: ............................................................................................. 5 3.2 VALUE AND GROWTH: ....................................................................................... 5 3.3 LARGEST SECTORS: ............................................................................................ 5 3.4 SIGNIFICANT PLAYERS: ..................................................................................... 6 3.5 REGULATORY FACTORS: ................................................................................... 6 3.6 CONSUMER ATTITUDES ..................................................................................... 6 4. FORECAST .............................................................................................................. 7
Table 1. - Advertising Expenditure Forecast 1999-2004 ........................................................................................... 8
5. STRATEGIC OVERVIEW .................................................................................... 9 5.1 MARKET DEFINITIONS ....................................................................................... 9 5.2 MARKET SIZE AND SEGMENTATION ............................................................ 10
Table 2. - Spending on all Advertising 1994-98 ...................................................................................................... 10
5.3 ADVERTISING BY MEDIA TYPE ...................................................................... 12
Table 3. - UK Advertising Spends on Main Media 1994-98 ................................................................................... 13 Table 4. - Growth in UK Advertising Spends on Main Media 1994-98 .................................................................. 14 Table 5. - Proportion of UK Advertising Spends on Main Media 1994-98 ............................................................. 15 Table 6. - Advertising Costs: Indices of Prices for Press and Television 1994-98 .................................................. 16
5.4 NEW MEDIA AND ADVERTISING .................................................................... 16 5.4.1 Survey Results: Use of Advertising on the Internet ............................................ 17
Table 7. - Internet: Connection and Advertising Content Usage January 2000 ...................................................... 17
5.5 ADVERTISING AND MARKET RESEARCH: BALANCE OF TRADE 1997 ... 18
Table 8. - Advertising and Market Research: Exports and Imports by Value .......................................................... 18
5.6 ADVERTISING BY MAJOR PRODUCT CATEGORIES ................................... 19
Table 9. - Leading Sectors by Advertising Spend 1996-98...................................................................................... 20 Table 10. - Top Ten Advertisers 1998 ..................................................................................................................... 21 Table 11. Top Ten Advertised Brands 1998 ............................................................................................................ 22 Table 12. - Advertising to Sales Ratios 1997 ........................................................................................................... 24
6. COMPETITIVE STRUCTURE: ADVERTISING AGENCIES....................... 25
Table 13. - Leading International Agencies by Gross Global Income 19998 .......................................................... 25 Table 14. - The Number of Agencies in the UK 1997-99 ........................................................................................ 27 Table 15. - London versus the Rest.......................................................................................................................... 28
Table 16. - Foreign Ownership of Top UK Agencies .............................................................................................. 30 Table 17. - Major Group Structures and Access to Other Media Services (e.g. PR) .............................................. 31
7. SECTOR SUMMARY: AGENCIES BY TYPE ................................................. 33 7.1 FULL SERVICE..................................................................................................... 33 7.2 ‘CREATIVE’ AGENCIES ..................................................................................... 34 7.3 MEDIA INDEPENDENTS .................................................................................... 34 7.4 INTEGRATED MARKETING .............................................................................. 34 7.5 SECTOR ANALYSIS: FULL SERVICE AGENCIES .......................................... 35 7.5.1 Summary of Sector: Full Service/Integrated Agencies ....................................... 35
Table 18. - Rationale for Agency Selection 1999 .................................................................................................... 36 Table 19. - ‘Top Agencies’ 1999 ............................................................................................................................. 37 Table 20. - Top ‘Creative’ Agencies 1999 ............................................................................................................... 38 Table 21. - Top Ten UK Agencies by Billing September 1999 ............................................................................... 39 Table 22. - Top UK Advertising Agencies by Recorded Turnover Latest Year ....................................................... 40 Table 23. - UK Quoted Agency Groups ................................................................................................................... 41 Table 24. - Top UK Independent Regional Advertising Groups .............................................................................. 42
7.5.2 Share and Profitability Shifts .............................................................................. 42 7.5.3 Corporate Strategies ............................................................................................ 42 7.6 SECTOR ANALYSIS: MEDIA INDEPENDENTS .............................................. 43 7.6.1 Summary of Sector: ............................................................................................ 43
Table 25. - ‘Top Media Agencies’ 1999 .................................................................................................................. 44
7.6.2 Top Media Independents by Scale of Operation ................................................. 44
Table 26. - Top Ten UK Media Independents by Billing September 1999 .............................................................. 45 Table 27. - Top UK Quoted Media Buying Groups ................................................................................................. 45
7.6.3 Share and Profitability Shifts .............................................................................. 46 7.6.4 Corporate Strategies ............................................................................................ 46 8. CONSUMER ISSUES AND DYNAMICS ........................................................... 47 8.1 NOP SURVEY DATA ON ATTITUDES TO ADVERTISING ............................ 47
Table 28. - Survey Questionnaire ............................................................................................................................ 48
8.2 SURVEY FINDINGS ............................................................................................ 48 8.2.1 Attitudes to Advertising by Sex .......................................................................... 49
Table 29. - Attitudes to Advertising by Sex ............................................................................................................. 50
8.2.2 Attitudes to Advertising by Age ......................................................................... 50
Table 30. - Attitudes to Advertising by Age ............................................................................................................ 52
8.2.3 Attitudes to Advertising by Socio-Economic Groups......................................... 52
Table 31. - Attitudes to Advertising by Socio-Economic Groups ............................................................................ 53
8.3 FUTURE PROSPECTS ......................................................................................... 54 8.3.1 Trends and Developments................................................................................... 54 8.3.2 The Mass Market ................................................................................................ 54 8.3.3 Payment by Results ............................................................................................. 55 9. EXTERNAL INFLUENCES................................................................................. 57 9.1 UK REGULATION, LEGAL AND VOLUNTARY .............................................. 57 9.2 THE INFLUENCE OF THE EU............................................................................. 57 9.3 REGULATORY BODIES AND THEIR CODES .................................................. 58 9.3.1 Advertising Association ...................................................................................... 58 9.3.2 The ASA ............................................................................................................. 59
Table 32. - ASA, Number of Complaints 1996-98 .................................................................................................. 60 Table 33. - ASA, Total Number of Individual Advertisements Investigated ........................................................... 61 Table 34. - ASA: Subjects Receiving the Most Complaints .................................................................................... 62 Table 35. - ASA Special Surveys re Code Compliance ........................................................................................... 63 Table 36. - CAP Copy Advice, Number of Enquiries 1996-98................................................................................ 63
9.3.3 The CAP Code .................................................................................................... 64
9.3.4 CAP Code: Principles ......................................................................................... 64 9.3.5 CAP Code of Advertising - Detailed List of Topics ........................................... 65 9.3.6 CAP: Areas with Specific Rules ......................................................................... 66 9.4 THE ITCA AND BROADCAST CLEARANCE ................................................... 66 9.5 PRIVACY AND DATA COLLECTION LEGISLATION..................................... 68 9.5.1 CAP Specific Rules, List and Database Practice ................................................ 68 10. SUPPLIER DYNAMICS ..................................................................................... 71 10.1 MEDIA COMPANIES: TV, NEWSPAPERS, MAGAZINES............................. 71
Table 37. - ITV Franchises and Ownership 2000 .................................................................................................... 72 Table 38. - Cable and Satellite Development 1995-99 ............................................................................................ 73 Table 39. - Daily Viewing Hours per Individual 1994-98 ....................................................................................... 75 Table 40. Annual % Shares of Viewing (Individuals) 1990-98 ............................................................................... 76 Table 41. - Press Circulation Figures 1994-98 ........................................................................................................ 76 Table 42. - Leading Newspaper and Media Groups ................................................................................................. 77
10.2 ADVERTISING ON THE NEW MEDIA ............................................................ 78
Table 43. - ‘Dot Com’ Advertising Agencies - Divisions of Major Agency Groups ............................................... 80 Table 44. - New Media Agencies: Specialists Total Turnover in 1998 .................................................................... 80
10.3 CONSUMER DATABASES ............................................................................... 81 10.4 BRITAIN’S ROLE IN CREATIVE ADVERTISING: PRODUCTION HOUSES AND CRAFT TRAINING ........................................................................................... 82 11. OTHER SOURCES OF INFORMATION ........................................................ 83 12. GLOSSARY OF TERMS .................................................................................... 85 12.1 ABOUT THE SOURCES USED ......................................................................... 86 12.2 PROBLEMS IN CALCULATING ....................................................................... 88