Ad Agencies Expect Improved 2011 Economic Conditions

Agencies were pleasantly surprised by the rebound in the ad market in 2010. Recovery in the auto and finance industries along with a contentious election cycle boosted ad expenditures and demand for creative services. Analysts are looking for trend to continue into 2011.

Research shops vary a bit in their outlook for this year when it comes to the global ad market. For example, GroupM is looking for a 5.8% growth rate while ZenithOptimedia says a 4.6% increase is more likely. For the U.S. market, GroupM believes a 3.7% increase is achievable, pumping another $5 billion into the economy.

High-​growth economies will snag much higher ad spending increases this year. In many cases, U.S.-based marketers will be spending these funds, but the beneficiaries of this activity will be the BRIC counties. Advertising growth will soar into the double-​digits in Brazil, Russia, India and China.

Despite the growth in the ad market, agencies in the U.S. may find it challenging to maintain customer relationships. Once the downturn started, marketers began looking for more creative and inexpensive ways to launch campaigns. These marketers are now working with smaller agencies who have lower expense profiles. Susan Gianinno, CEO Publicis Worldwide U.S.A. notes that  agencies must understand the metrics of the new world and that there was a ‘salary inflation that we’re never going back to.”

Agencies will be reinventing themselves to serve clients in new ways and with new technologies in 2011.

[Source: O’Leary, Noreen. AdweekMediaForecast 2011 – Agency. Adweek​.com. 12 Dec. 2010. Web. 4 Jan. 2011] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.