Published on 10/02/2016 by Punchmedia

Superbowl Surge Reflects Oz Ad Agency Confidence

The NFL’s superbowl is watched by millions and millions of people worldwide but sometimes the game itself is somewhat overshadowed by the anticipation of what the advertisers will come up with ``this year’’. Ads shown throughout the superbowl coverage are some of the most watched television advertisements each year and advertisers are forever trying to outdo each other over the 5 hour coverage. Deploying a combination of humour, celebrities and plenty of animals and several commercials with more serious, socially conscious messages advertisers paid approximately $US5 million each for the opportunity to try and gain the attention of the massive audience. Those hoping for celebrity sightings were certainly not disappointed, some 40 stars appeared in commercials during the game. T-Mobile went with hip-hop star Drake, a spot for Kia starred actor Christopher Walken, while one for Bud Light featured Seth Rogen, Amy Schumer and Paul Rudd. According to staff, Red Lobster’s sales jumped 33 per cent on Sunday and increased ``well into the double digits’’ on Monday after mega star Beyoncé mentioned the seafood chain in her new song, Formation. Superbowl aside, it seems advertising agencies in Australia have generally benefited from steady demand over the past five years from client companies seeking to reach increasingly fragmented markets. During this time, an increased focus on targeted and measurable below-the-line advertising has emerged, as clients have looked to control costs and limit spending on ineffective advertising. This has resulted in industry revenue increasing at a moderate rate over the five years through 2015-16.

Revenue Drivers

After several years of low growth or revenue declines, the industry expanded moderately in 2011-12 due to higher client demand. Stronger revenue prevailed in 2012-13 and 2013-14 as internet advertising levels surged. In 2014-15 and 2015-16, revenue is projected to grow at even stronger rates, to reach $2.1 billion, as business confidence remains relatively high. As a result, industry revenue is expected to increase at an annualised 2.6% over the five years through 2015-16. This includes projected growth of 3.3% in 2015-16.

Moving online

Advertising agencies are best suited to creating marketing tools for traditional media, which the majority of the Australian population still uses in combination with online media. However, success with ads that use traditional media formats is not always guaranteed, as consumers can now easily ignore TV and print advertising. There has been increased use of online advertising techniques, and greater advertising on smartphones, tablets and other mobile devices. These advertisements are generally less sophisticated and tend to be part of larger cross-platform ad campaigns. Higher levels of consumer spending and greater internet usage have hastened the move towards online advertising, which is often a cheaper alternative to traditional mass media.

Integrated Campaigns and Fees

The shift online has emphasised the trend towards integrated marketing campaigns that use a combination of above- and below-the-line communication. This technique known as through-the-line advertising. The wider trend of integrated campaigns has been motivated by clients' perception that solely using mass media advertising may mean the message is lost among the myriad of other advertisements, or ignored by an audience that has become increasingly wise to advertising techniques. In response to these trends, major advertising agencies have been acquiring and merging with complementary businesses such as public relations agencies, media-buying companies, market research firms and communications specialists. As a result, many firms have become one-stop shops for marketing and communications. The major players in the industry all operate under this integrated model, to provide clients with a complete suite of services.

Agency Restructuring

The trend towards greater integration and specialisation in differing advertising media has prompted agencies to undergo restructuring. There is now a need for employees with digital and quantitative skills, which have not traditionally been present in the industry. As a result, there has been a rise in industry employment over the five years through 2015-16. Due to limited needs and budgets, some clients have unbundled service requirements and sought specialists in each area. This has provided growth for small, niche and specialist advertising agencies, despite the dominance of high-overhead, long-established agencies. Many small and newly established creative agencies, built by former employees of large agencies, are actively competing against the larger and more established firms. Some of these smaller agencies can guarantee that senior staff will be assigned to, and actually work on, clients' accounts, and are therefore more responsive to clients' needs.  

punchmedia

Curtis is a leading expert in the business-for-sale industry, serving as a senior content creator at anybusiness.com.au.

With a career spanning over fifteen years, Curtis has accumulated extensive knowledge in the domain of business sales, acquisitions, and valuations. His deep understanding of market dynamics and his ability to translate complex industry jargon into accessible insights make him a trusted resource for entrepreneurs and business owners looking to buy or sell businesses.

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