The global traditional advertising agency services market was valued at USD 270.3billion in 2019 and is expected to grow at a 5.5% CAGR during the forecast period.
Traditional Advertising Agency Services Market: A Powerful Tool Which Provides Businesses the Ability to Reach Potential Customers
Traditional advertising agency service provides an interruptive form of marketing that allows companies and marketers to reach out to consumers wherever and whenever they wish to. It can occur in many different forms, including newspaper ads, magazine ads, billboards, radio ads, television ads, and direct mailings. Traditional marketers push their marketing messages in front of a large number of people, regardless of whether or not they are interested in the messages. In a locally-oriented business, traditional advertising holds great promise. It lands directly in front of people in their community and targets a specific group that may find value in knowing about what you offer.
For example, advertising a client’s services to a rural community can create tremendous success. You can be very specific with your messaging and create a strong local presence. These communities have limited options compared to city dwellers, so simply being top of mind can lead to lots of new business for you. In general, traditional advertising can give a client’s business a presence that speaks from a local standpoint.
Cost Effective Advertising as Compared to In-House Marketing Operations
Several companies operate with a limited marketing budget and cannot sustain an in-house advertising and marketing team for managing their advertising and public relation operations. Traditional advertising agency services assist these companies in cost-effectively procuring professional marketing services. Deploying an experienced and skilled advertising agency to oversee the advertising operations prove effective as the client company can leverage advanced marketing tools and use industry-specific data provided by the advertising agency to design the most suitable and optimized marketing campaigns.
With an in-house advertising and marketing department, the company needs to incur a substantial amount on the training, infrastructure, and fixed salary of the employees in the marketing team. Additionally, with an in-house team, an organization may find it extremely difficult to achieve marketing scalability. The company may need to hire and train staff to augment advertising operations and also need to lay off staff to scale down operations during off-season operations.
Proliferation of Television as a Medium for Advertising
Increasing television viewership and a substantial surge in the broadcasting channels across different regions are creating numerous opportunities for advertising agencies to pitch in their services to clients. In order to increase the reach of a campaign, several agencies form advertisement campaigns that are showcased on the channels of a particular broadcaster on a primetime slot. Assessing the similarities between the channel audience and potential customer base of the client can result in devising a sound advertising strategy and enhances the reach of client business to a wider audience base.
Additionally, after the COVID 19 outbreak, the average television viewing hours have witnessed a notable increment, which has propelled the efficacy of television advertisements and helped brands to garner increased popularity by investing in such advertisements displayed on the TV. Many advertising agencies are now trying to tie-up with the major broadcasters to provide them with advertisers and are also attracting clients by promoting their brands on a prime-time slot through TV channels that top the TRP charts in the target region.
COVID-19 Impact: The Pessimistic Approach of Customers from the Demand Side and Evident Disruptions in Supply Chain Operation Hindering the Market Operations
A considerable reduction in the cash liquidity in the market and reduced disposable income of the end-users decreased the revenue generation of the market players operating in multiple industries within the value chain. Additionally, the problems in the supply chain operations or some causes severe breakdown of the value chains catalyzed the problems from the demand side. This reduction in the market operations subsequently resulted in reduced revenue generation for many market players especially, those who were operating in non-essential commodities. Thus, manufacturers decided to cut off their expenses and reduced operational cost to mitigate the financial crises.
The company decided to scale down its advertising operations, reduced the spending on the marketing operations, and pushed the traditional advertising agency market towards negative growth.
Traditional advertising includes billboard advertising and business flyer distribution in public spaces. After the outbreak of the COVID-19 pandemic, restrictive regulations such as social distancing and brief closures of the public spaces have decreased the demand of these platforms for advertising and reduced the effective mediums to execute traditional advertising agencies' marketing campaigns.
The Offline Services Segment Is Projected to Attain a Noteworthy Share in the Global Market
The offline segment accounted for USD 208.72 in 2019 and is projected to grow at a rapid pace over the forecast period. This segment primarily comprises newspaper, magazine, TV, Radio, and outdoor advertising, also categorized as a print, broadcast, direct mail, and telephone marketing.
Print marketing is the oldest form of traditional marketing. Loosely defined as advertising in paper form, this strategy has been in use since ancient times when Egyptians created sales messages and wall posters on papyrus. Today, print marketing usually refers to advertising space in newspapers, magazines, newsletters, and other printed materials intended for distribution. Despite the emergence of the digital platform for news, printed news revenue still accounts for about 86% of news publishers’ revenue. These factors are propelling the growth of printed media as a prominent channel for advertising.
North America Caters to a Significant Portion of the Market
The traditional advertising agency market is considered an established market across the North American region. According to our analysis, U.S. is expected to spearhead the revenue generation in the region due to the extensive presence of advertising agencies within the country. The operations of more than 13.5 thousand advertising agency service providers and a collective workforce of around 189,000 in these agencies are expected to provide substantial development to the market.
Association of National Advertisers (ANA) of the U.S. states that the advertising industry in the country observed a turnover of USD 5 trillion and accounted for 20% of the total economic operations in the country. The preference of many brands operating in diverse industry segments towards traditional media services for its brand promotion and effective end-user reach can augment the traditional advertising agency services in North America. The proliferation of printed media and Television based media across the region is also expected to be the reason behind its hefty market share across the region.
Asia-Pacific Is Anticipated to Develop at a Rapid Pace across the Global Market
Asia-Pacific market is expected to progress at a substantial pace post the COVID-19 resurgence throughout the forecast. Asia-Pacific market is expected to soar to new heights in the traditional advertising agency services market over the forecast period. Adoption of international marketing strategies in the regional markets across Asia is expected to be the driving factor for the market.
The traditional advertising market has witnessed exponential growth in the developing economies of the region before the outbreak of the COVID-19 pandemic.However, the post-pandemic pessimistic market scenario, decreased revenue generation of many market brands compelled these organizations to slash their annual spending on the marketing budget. This reduction in advertisement spending is forecasted to limit the market growth projections in the region.
Asia-Pacific market is home to diverse cultures, ethnic groups, and diverse social ecosystems. Thus, the traditional advertising system and promotion of the brands using advertising strategies to increase the regional appeal of the brands can provide significant market growth opportunities. Additionally, the traditional advertising agency is expected to target South Asian countries in the Indian subcontinent and Far East Asian countries like China, Japan, and South Korea, differently owing to a massive difference in the social structure in these two regions of Asia.
Players operating in this market include Epsilon, Televerde, 360I, COX Media LLC, MDC Partners, Fred & Farid Group, 451 Agency, Fuse LLC, WPP, and IPG (MullenLowe) among others. In order to help its clients to execute a robust and effective marketing strategy, prominent market players are the Outsourcing model which establishes a collaborative learning experience for employees of client organization across the regions.
Additionally, to increase presence outside their domestic market companies are working hard to finalize acquisitions and partnerships in different regions. For instance, in 2019, WPP and TikTok, a leading destination for short-form mobile video, announced an innovative global partnership to enable WPP agencies and clients to tap into the culture-shaping impact and reach of the platform. After the pandemic, the companies are focusing on building a strong reputation for having exceptional customer service. Rather than spending money and time on new customers company prefers to focus on customer retention by identifying key tactics and projects to retain the customer.
Traditional Advertising Agency Services Market: Segmentation
- Online Services
- Offline Services
- North America
- South America
- The Middle East and Africa
Frequently Asked Questions (FAQs)
The global traditional advertising agency services market was valued at USD 270.3 billion in 2019 and is expected to grow at a 5.5% CAGR during the forecast period.
Increasing television viewership and a substantial surge in the broadcasting channels are the key factors expected to drive Traditional Advertising Agency Services Market during the forecast period.
North America is expected to hold the highest market share in Traditional Advertising Agency Services Market.
Epsilon, Televerde, 360I, COX Media LLC, MDC Partners, Fred & Farid Group, 451 Agency, Fuse LLC, WPP, and IPG are the top players in Traditional Advertising Agency Services Market.
In 2019 Global Traditional Advertising Agency Services Market was valued at SD 270.3 billion.
Offline Service Segment is expected to be the leading segment in Traditional Advertising Agency Services Market during the forecast period.
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