Agency profits fall as clients put squeeze on ad budgets
24 Nov 2011 | by Ian Darby
The profitability of UK marketing services agencies nose-dived by more than 50 per cent during the first half of 2011.
Agency salaries have increased 7.7% year on year with planners seeing the biggest percentage increase in wages, according to Marketing Agencies Association research.
The profitability of UK marketing services agencies nose-dived by more than 50 per cent during the first half of 2011.
LONDON - ISBA's latest annual Paying For Advertising report has exposed record client dissatisfaction with agencies over costs and transparency, and a continued downward trend in the average rates paid by clients to agencies.
The media sector has consolidated its position as one of the most productive, efficient and profitable of the marketing and communications sector. Media buyers are well placed to deal with a significant downturn but will need all of their experience and resources to manage their way through.
The digital sector grew income more than any of the other marketing services disciplines, but struggled to convert this into operating profits. Gross income across the Top 30 agencies increased by 18 per cent, continuing the sector's trend for year-on-year growth.
Kingston Smith W1's latest annual survey on financial performance promises to be the final set of encouraging results before the full effects of the recession are revealed.
The Top 40 DMSP agencies reported modest total growth in gross income of 3.7 per cent in their most recent filed accounts. Anecdotal evidence suggests that the majority of even this modest growth was achieved in the earlier part of 2008.
Welcome to the first incarnation of a new element in Campaign in which we invite experts to burrow beneath the surface of the catch-all that is "digital". Google, Isobar Mobile, JWT London, LBI and MBA share their insights on mobile.