Advertising in 2014: More jobs, higher revenues but ‘less loyal’ clients

The love between advertising agencies and their clients does not always run smooth, as this year’s “industry census” by the Institute of Advertising Practitioners in Ireland (IAPI) points out.

Some 45 agencies – the majority of IAPI’s membership – participated in the survey, which pointed to newfound confidence in the industry but also highlighted pressure from clients to keep rates down.

One respondent from a creative agency told the census that clients were “much more aggressive and much less loyal”, adding that they were “aggressive on cost and expectation and less committed to supporting their agency in their efforts to deliver excellence”.

Another identified as an emerging trend “young, inexperienced clients who don’t really understand or value marketing or agencies and put way too much value on social media”, while a third noted there was “faster turnaround and scope creep” on campaigns.

One media agency respondent said clients appeared “to depend more heavily on agency services while being ever less willing to acknowledge these as legitimate agency costs”.

Short-term relationships

Another noted client relationships were less important than before, because of the culture within client companies: “Decisions are driven by procurement needs in many cases and agency relationships are viewed as short-term rather than long-term partnerships.”

However, despite these client-agency tensions, agencies also identified more positive trends such as opportunities to win business from clients’ ever- growing digital business, as well as the potential to diversify into new areas such as research, data and in-house broadcast production.

Almost four-fifths of advertising agencies expect turnover in the industry as a whole will increase in 2014, according to the survey, which Amárach Research conducted for IAPI in April and May. In the 2013 census only a fifth expected revenues to climb.

Some 1,545 people were employed full-time by IAPI member agencies in 2013 and the industry is now hiring “at pre-recession levels”, according to the representative body. More than half of the agencies surveyed expect their workforces to increase further this year, after a 20 per cent rise in employment levels last year. However, agencies report difficulties when it comes to the retention of skilled employees and say it is a challenge to attract key staff within the Irish market.

The advertising industry is a young one. The average age of an ad man or ad woman is 35, while a third of all employees are under the age of 30.

"It's encouraging that agencies are generally more positive in their outlook, not just for their own agencies but for the industry as a whole," said IAPI president Orlaith Blaney, who is chief executive of the agency McCannBlue Dublin.

“While there are undoubtedly real challenges to overcome, in particular the cost of pitching and retaining and recruiting talented staff, there are a lot of positives in this report.”