Traditional Advertising Agency Services Market

Market Overview

The global traditional advertising agency services market size generated a revenue of USD 234.58 billion in 2021 and is expected to be valued at USD 380.45 billion by 2030. The market is expected to grow at a CAGR of 5.52% during the forecast period (2017–2030). 

Advertising has been in the market since old ages when businesses used to advertise their products and services to attract customers. It also served as a brand recognition element in the earlier days. It all started with newspaper advertising way back in the 19th century. When we go through the current advertising industry, we can see the massive changeover in the advertising industry.

Traditional marketing is an interruptive form of marketing where marketers can reach out to their potential customers anytime and anywhere. These interruptive ads can be newspaper ads, TV commercials, billboards, radio ads, emails, etc. The traditional marketing approach allows marketers to pitch their services directly to their customers regardless of their willingness to see or read the advertisement.

It does impact the overall marketing campaigns of a company as people can’t ignore a forced advertisement in a newspaper or while watching TV. It is a tried and tested method as people have to go through the ad whenever they watch TV or read a newspaper, they might overlook the ad, but at least they will remember the brand name or the product that catches their attention.

Market Dynamics

Traditional Advertising Agency Services Market Drivers

• Intense Marketing Competition Leading to New Appointments of Advertising Agencies

The global advertising industry is a sector that generates a billion dollars of revenue across multiple regions. Recently various segments of the global advertising industry have witnessed an impressive growth of start-ups that provide marketing and advertising services that create a challenging and competitive ecosystem in the global traditional advertising agency services market growth. Such advertising agencies help companies reach their target audience through multi-channel marketing campaigns with effective advertising strategies and ad placements to find qualified customers.

With industries evolving at a tremendous rate, the advertising market is highly volatile. The standards of brand marketing and product advertising are at the highest level as the companies don’t compromise on their branding and advertising. Companies need their advertisements to be the best to attract more customers and increase their revenue. This has led to increased competition in the global traditional advertising agencies as the global advertising standards have reached the next level of marketing.

• Cost-Effective Advertising Campaigns Compared to In-House Marketing

Traditional advertising agency services have a strong point that their operations are cost-competitive compared to any marketing campaigns. Most companies operate with a restrained marketing budget with their in-house marketing team. For this reason, most companies are turning their heads toward traditional advertising agency services to empower their marketing campaigns to reach maximum customers with the interruptive advertising techniques at the most competitive price.

• Outsourcing Model for Advertising & Marketing Brings Forth New Opportunities for Traditional Advertising Agencies

Companies are now hiring experts from the advertising industry to guide their in-house staff on how to progress and attract potential customers for their business. For this, global traditional advertising agency services are at the forefront of such companies who are looking to outsource their advertising and branding with interruptive ads that will help create their brand awareness.

Traditional Advertising Agency Services Market Restraints

• Prioritization of Clients by Advertising Agencies

Such traditional advertising agencies often serve multiple clients at a time. According to a study, such advertising agencies work for 17 clients simultaneously, which creates chances for small human errors. But the fact is, the traditional advertising agencies serve their clients following the revenue associated with it. Clients are prioritized by the revenue they contribute to the agency's business, and the more revenue-generating clients are treated with more value than the clients that contribute in lesser ratios. This prioritization system from the advertising agencies can hamper the client relationship. It can create an extension in deadlines and the quality of the content produced for the marketing material. This is where companies can re-think outsourcing traditional advertising agency services for their marketing and advertising needs.

• Constrained Experience in Serving Niche Clients

Advertising is the need of the hour for every business to succeed in this highly volatile global market. Many advertising agencies operate in a niche market of serving a specific industry and branding for them on selected advertising channels or sources. This offers a commendable experience of running high-performing advertising campaigns in the said niche market but creates a barrier when needed to expand their services to other industrial segments.

Considering the Covid outbreak, there has been a significant increase in the television viewing hours, which helped brands attract new customers, leading to the need for traditional advertising agency services market. So, the agencies must have a blended experience serving clients in various industrial segments.

Traditional Advertising Agency Services Market Opportunities

• Television Escalation as an Advertising Medium

Traditional advertising comes under interrupting ads as these are shown so that readers can't ignore their ads. For example, if your customers are watching a cricket match and during the innings break, an ad comes, and people have to see it as they can't ignore it. This makes the consumers recognize the brand as the ads keep interrupting their streaming services now and then. There is no control over the audience set while projecting an advertisement on TV. Still, these ads can increase the reach to the entire region irrespective of the target audience and has the potential of attracting a potential customer with the wide range of sales funnel opened with such interruptive ads.

• Customer Success Stories Boosting Traditional Advertising Services

Every business runs with a strong customer base, and to have such a customer base, the business needs to earn the trust of its consumers. This is where the customer success stories play a vital role. This can attract numerous potential customers who can conduct business transactions with traditional advertising agency services. Many traditional advertising agencies often publish their client testimonials publicly on a website, a newspaper or magazine ad, hoardings, etc.

According to surveys conducted, the majority of the advertising agencies are selected based on their client testimonials and customer success stories.

Regional Analysis

The global traditional advertising agency services market share are categorized into five regions: North America, Asia-Pacific, Europe, Middle-East & Africa. The North American region is the most dominant one, with a sales figure of USD 66.05 billion. The market in the region is expected to reach USD 109.89 billion by 2030 at a CAGR of 5.82%.

Europe is one of the highly fragmented markets for traditional advertising agencies. About 97% of the companies in the European region seek assistance from such advertising agencies to market their brand and create awareness among the consumers.

The Asia-Pacific (APAC) region is soaring to new heights in the global traditional advertising agency services market as the need for a unique and result-oriented marketing approach is in demand in the region with the evolution of new industries in one of the most developing countries like India and China. Of which India is the most dominant, with a share of USD 19.22 billion in 2021 and generating USD 33.16 billion at a CAGR of 6.25% by 2030.

Segmental Analysis

The global traditional advertising agency services market share is classified into type and end-use. When classified into types, the market is divided into online and offline services. The online service segment dominated the global market with a sales figure of USD 56.01 billion in 2021. The segment is expected to be valued at USD 97.47 billion by 2030 at a CAGR of 6.35%.

Online services are a mixture of traditional and modern advertising methods, which can be referred to as a tactical evolution of tried and tested strategies of the traditional marketing approach. The best practices of traditional marketing like product, promotion, price, and place also apply to current online marketing services.

Traditional marketing can be integrated effortlessly into online marketing for branding and positioning in the market. Traditional online service includes data analytics and surveys, and the evolution of online channels like e-magazines and e-newspapers has gained much popularity in recent times. Advertisers have found creative ways to capitalize on online services and the traditional advertising strategy. Nowadays, traditional advertising agencies utilize advanced online technologies such as analytics, email marketing, data acquisition, etc.

The offline services primarily comprise newspapers, magazines, TV, radio, and outdoor advertising. Also, these offline services are categorized as a print, broadcast, and telephone marketing. Print marketing is the oldest form of traditional advertising and has been in use since ancient times, considering the overall offline services. Today, print marketing usually refers to advertising in newspapers, magazines, flyers, pamphlets, etc.

Despite the emergence of digital marketing strategies, offline advertising services such as printed news and banner ads still account for almost 80% of the revenue. Along with this, telemarketing is also one of the proven marketing strategies in offline services, where customers are convinced to buy the company's products or services through cold calls from the sales executives.

When categorized with respect to the end-use, it is further classified into government and enterprise use. Compared to the two, the enterprise module has more share than the government use with a sales figure of USD 138.94 billion and is expected to reach USD 232.94 billion at a CAGR of 5.91% by 2030, which is 2% higher than the government use category. Governments use traditional advertising services for awareness campaigns, public welfare works, job notifications, national information, etc.

Most of the time, the government employs such traditional advertising agencies to promote their governance and the nation's vision. Taking one of the recent examples of Indian Railways, the said department of the central government has installed about 1000 digital screens across 2175 railway stations to promote the rail services, which is expected to generate a revenue of USD 1.76 billion.

The enterprise model also uses the traditional advertising approach to create brand awareness and attract potential customers into its sales funnel. Enterprises primarily focus on their target audience to get them into their sales channel, and for this, interruptive advertising is the best and the most cost-competitive way.

Impact of covid-19

The disruption of the global supply chain caused a considerable reduction in the cash liquidity in the market, and the reduced income of the end-users affected the revenue generation of several market leaders. A subsequent decrease in the market operations resulted in a reduced revenue generation for many leading companies globally. With the Covid-19 outbreak, the traditional advertising, including billboard ads and the distribution of business flyers in public places, got restricted due to the preventive measures of the Covid-19, which decreased the demand for such advertisement platforms.

The pandemic has impacted television viewership by 40% since April 2020, but it saw a steep decrease in the number of advertisers as it dropped from 1378 to 1021 in the said period. This reduced number of advertisers dropped the revenue generation from the television advertisement. Due to this, many marketers are shifting their branding and marketing to a digital platform with digital marketing.

Recent Developments

• In September 2020, Epilson launched new products for loyalty solutions for mid-size brands expanding industry-leading capabilities. 
• In July 2020, 360I contracted with Dentsu Aegis Network as its first integrated media agency to look after advertising and brand marketing.
• In February 2021, Cox media signed an agreement with AT&T to provide CMG-owned local broadcast stations to customers across the US.
• In February 202, MDC Partners expanded its services with an affiliated program that will fast-track its presence in the emerging markets without taking an immediate risk.