Creative Advertising
Market, Supplier, Risk and
Competitive Intelligence

Industry Outlook & Drivers

Creative Advertising Global Market Outlook

• The overall advertising spend is split into media planning and buying (65–90 percent) and creative advertising (10–35 percent)
• In 2019, the global ad spend was valued at $615.7 billion, it is forecasted that the impact of COVID-19 is expected to bring a decline of 8 percent approximately to the global ad spend in 2020. However, social media and online video are set to record a considerable rise in numbers

Creative Advertising Global Market Trends

• The major trends in global creative industry are rising digital spend (expected to reach a 50–51 percent of advertising spend), production decoupling and increasing customization of advertisements
• Suppliers are improving their supply capability by adopting performance-based metrics for evaluation and monitoring their performance

Creative Advertising Global Drivers and Constraints

The increasing importance of digital channels and major events (the US presidential elections, the Rio 2016 Olympics and Paralympics, as well as the UEFA EURO 2016 football championship) were the major drivers of the advertising industry.

Supply Market Outlook

High Maturity

• Countries: U.S., Germany, UK, France, Italy, Spain and Japan
• Suppliers: Established service providers have been providing bundled services to the clients, which eventually lowers their effort of searching for new providers for best-in-class technologies in the market

Medium Maturity 

• Countries: China, Indonesia, Australia, India, Canada, Russia and Mexico
• Suppliers: The majority of the market is held by local service providers who usually operate out of one country. Their services are customized to meet the demands of local buyers

Low Maturity

• Countries: Ireland, Portugal, Belgium, Morocco, Libya, Nigeria and Algeria
• Suppliers: Owing to lower demand, the creative advertising market is highly dispersed with local service providers that primarily provide tactical work for the advertisers

Creative Advertising Global Drivers and Constraints

Advertising market research shows that the digital medium is forecasted to witness growth in double digits and likely to contribute to more than half of the global ad sales.

Drivers

• Increasing Digital Spend: The increasing importance and penetration of smartphones and social media has encouraged the marketers to increase their ad spend in these channels to attract more consumers and to improve their brand loyalty. By 2020, the share of digital advertising is expected to account for nearly 51 percent of the total advertising.
• Increasing Penetration into Newer Markets: Marketers are increasing their focus on newer markets in APAC and Africa, which have higher growth expectations.

Constraints

• High Margins and Lack of Transparency: Network agencies continue to enjoy high profit margins due to their billing rates, which are skewed towards senior personnel. Therefore, clients face cost pressures since budgets are decreasing but agencies are unwilling to accommodate the reduced budgets.
• Dominance of Select Network Agencies: The top network agencies have dominated the market through strategic mergers and acquisitions, leading to a situation where the clients have less bargaining power