 |
Print this page |
News
European agencies see growth in 2010, but feel time & cost pressures
10 June 2010 -Brussels, 10 June 2010: Following a poor year in 2009, commercial communications agencies across Europe are reporting a more stable business environment with many expecting to see their markets grow in 2010, despite difficult trading conditions, according to a new pan-European survey of agency prospects by EACA, the European Association of Communications Agencies.
Based on responses from all 31 of its National Association members, the EACA survey covers 3 main topics: a business barometer for 2009, changes in client behaviour as result of the recession and development prospects for 2010.
Overwhelmingly, 2009 was a disappointing year for the sector, with 71% of respondents reporting poor results, 23% just average and only 6% (Cyprus & Switzerland) seeing any growth. The impact of the crisis was felt across the spectrum, regardless of geographical location or market size, with classical advertising the hardest hit category.
As a direct result of the recession, the key client demands are for ‘more services for the agreed fee’ (100%), ‘lower fees for the same work’ (100%) and ‘extra free services’ (89.7%). Other client reactions are ‘creating more engagement by agencies’, ‘new remuneration models’, ‘more short term activities and last minute decisions’, ‘account reviews to drive down costs’ and ‘more pressure to decrease media tariffs, including major discounts of up to 80% on list price’.
Agencies also report a deterioration in pitch conditions, with increased demand for flexible, quick, effective solutions (100%) and cost-efficient solutions (100%), but less emphasis on strategic consultancy (77.8%) and creative solutions (74.1%).
Overall, EACA’s National Associations report that as a direct result of the economic climate, communication has become clearly more orientated towards price offers (100%), more aggressive in its appeal to purchasers (39%) and more competitive (25%).
Among clients, the most popular measures taken in reaction to the downturn are ‘cutting investment in advertising’ (100%), ‘looking for cheaper communications solutions’ (90%), or ‘concentrating on only one, or a very few, communications disciplines’ (45%) – conversely, only one country reported that clients were investing more to win market share during the recession.
For 2010, the outlook is more positive, with 32% of respondents forecasting an increase in agency turnover, 40% predicting a stable business environment and around a third still expecting a decrease. Forecasts range widely, from a high of +15% in Turkey to a low of -25% in Cyprus, with a small majority of markets predicting growth of between 3 & 10%.
Within those overall growth predictions, the big loser is seen as mass media, with 54% of respondents expecting negative development in 2010. Elsewhere, stability is widely predicted in such diverse sectors as brewing, small ads, special direct mail, pharmaceuticals and chocolate/confectionery, Banking, telecommunications & trade are forecast to be the biggest growth sectors this year.
EACA’s members believe that integrated communications strategies (57%) and more efficient campaigns (57%) will be the most important factors for agencies in 2010, with new, interactive media (42%) & creativity (37%) not far behind. Factors such as changing consumer behaviour, strategic planning or specialisation are seen as least important.
Agencies see themselves as being most affected by cost & time pressures this year, with short term thinking by clients and expenditure on new business also of concern.
“The recession hit the agency business in Europe very hard,” said Olivier Fleurot, President of EACA & CEO, MS&L Group. “We are only now beginning to see some gradual signs of recovery, although the pressure on agencies to provide more service for less remuneration is still intense. This survey underlines the shift that has occurred in the way agencies & clients work together; agencies are resilient to change, but we must ensure that the strategic thinking and creativity that are at the heart of great advertising are not buried by short term, cost-driven expediency.”
Click here to see the presentation: http://www.eaca.be/_upload/ppt/Euromonitor.ppt
For further information, please contact:
Dominic Lyle
Director-General EACA
Tel: + 32 2 740 0711
E-mail: dominic.lyle@eaca.be
Florence Chalot
EU Affairs Manager EACA
Tel: + 32 2 740 0715
E-mail: florence.chalot@eaca.be
The European Association of Communications Agencies (EACA) is a Brussels-based non-profit organisation whose mission is to represent full-service advertising and media agencies and agency associations in Europe. EACA aims to promote honest, effective advertising, high professional standards, and awareness of the contribution of advertising in a free market economy and to encourage close co-operation between agencies, advertisers and media in European advertising bodies.
The EACA National Associations participating in this survey are:
Austria – WKO Belgium – ACC Bulgaria - ARA
Croatia – HURA Cyprus – CAAA Czech Republic - AKA
Denmark – DRRB Finland – MTL France - AACC
Germany – GWA Greece – HACA Hungary - MAKSZ
Iceland – SIA Ireland – IAPI
Italy – AssoComunicazione Latvia – LAA Lithuania - KOMA
Luxembourg – MarkCom Netherlands – VEA Norway - Kreativt Forum
Poland – SAR Portugal – APAP Romania - RAAA
Russia – RACA Slovakia – KRAS Slovenia - SOZ
Spain – AEACP Sweden – Komm Switzerland - bsw
Turkey – TAAA UK - IPA
 |
| The European Association of Communications Agencies (EACA) is a Brussels-based organisation whose mission is to represent full-service advertising and media agencies and agency associations in Europe. EACA aims to promote honest, effective advertising, high professional standards, and awareness of the contribution of advertising in a free market economy and to encourage close co-operation between agencies, advertisers and media in European advertising bodies. |
|
