IAPI Census Forecast Shows Mixed Picture Facing Agencies In 2017

As the Irish advertising industry enters its latest period of recalibration keeping pace with global industry trends, a shift in confidence has been accompanied by a focus shift to respond to new opportunities, reports the newly released annual IAPI Industry Census report.  The Census, established five years ago by sector’s governing body, measures the pulse of the industry across a range of topics including agency revenue and billings, staffing, services and age/gender profile, by surveying senior stakeholders from IAPI member agencies.

Industry Profile

IAPI’s membership is a real mix. The smallest creative agency employs nine, the largest 150 people. The smallest media agency/group employs 23 people, the largest 281. We are a thriving and youthful industry. The age profile of the industry remains startlingly young with a majority of millennials - 45% of all agency employees are under 30. Only 6% are over the age of 51.  Employment in IAPI member agencies stands at 1,830, the highest since we began the research in 2013.

Agency Revenue / Billings

Trend data, based on 12 media agencies that participate annually in the research show media billings rose by 11% from €449.7 million in 2015 to €497 million in 2016 for these agencies.

Similarly, trend data for a basket of 13 creative agencies shows a 3% fall in the average Gross Creative Agency Income, down from €42.2 million to €40.8 million, €3.2M in 2015 to €3.1M in 2016.

Total Gross Creative income is reported at €96.3M. There’s huge variety within this with the smallest agency reporting income of €570,000 and the largest €22.6 million.

Agencies across creative and media are reporting that 27% of their income in 2016 came from International business, up from 11% in 2015.

Estimated Turnover Changes Forecast Year Ahead – Industry

There has been a change in levels of confidence for the industry. Those predicting turnover will ‘increase or strongly increase’ have dropped from 74% in 2016 to 58% in 2017, pointing to a more cautious outlook among agency owners.  

Opportunities Year Ahead - Own Agency

Even in this landscape, optimism remains, albeit it at a slightly lower level to 2016 findings, with 74% still forecasting growth for their own agency vs 77% in 2016, with the commentary pointing toward growth opportunities across media and creative agencies, including; new clients entering the market, internationalisation, revenue from programmatic, growth in demand for specialist services including PR, cross selling of services to existing clients. 

Gender Balance

The progressive working environment in the Irish advertising industry, championed by IAPI, is reflected in the positive developments around gender equality at senior level and the increase in agencies offering paid maternity leave, now 81%, up from 69% last year. Every two years we assess the gender balance of our industry, so our 2017 data is compared to 2015 data.  Overall the gender breakdown in agencies in industry is 52% female vs 48% male.

Women make up just 20% at CEO/MD/Managing Partner level. The positive news is this has risen by 7% since 2013. The equivalent figure in the UK IPA/Campaign 2017 survey is 27%. However when it comes to boards of Irish agencies, 28% of posts are held by women.

Good news for working Dads - Paternity Leave

The advertising industry has historically taken a progressive approach to paternity leave and as far back as 2014, IAPI Census data showed that 44% of agencies provided paid paternity leave in ranges from 1-3 days, up to 15 days.  2016 was a watershed year for working Dads in Ireland, with the government introduction of two weeks statutory paid leave, a step towards bringing Ireland in line with many of our European neighbour and OECD countries – and there is more good news for Dads in ad land this year.   69% of agencies now offer paid paternity leave, a rise of 12% on 2016 figures.  Of those surveyed who provide paid paternity leave, 41% provide 6-10 days with 18% offering over 15 days.

Job opportunities

41% of agencies report a skills gap. We are hiring. Digital skillsets – in the widest sense – are the most sought after. Irish advertising agencies are on the lookout for talent and are hiring. While 42% of agencies expect staff levels to increase this year, that’s down from 77% in 2016. Last year the industry hired 463 new staff. The challenge to keep hold of talented staff is something most agencies are experiencing, with 278 changing jobs in the last 12 months

Commenting on the launch of the 2015 IAPI Industry Census, Tania Banotti CEO said;   “This year’s Census gives a fascinating overview of agency land. While optimism remains and staff numbers are predicted to rise, agency directors and owners are adopting a more cautious outlook as we approach 2018.

 For a full copy of the report log onto http://census.iapi.ie/

Twitter handle: @IAPI_Updates #iapicensus17