Industry Analysis & Industry Trends
The Advertising Agencies industry has endured a difficult five years. Since the downturn began in 2008-09, businesses have cut back sharply on their advertising expenses, causing revenue to contract in 2008-09 and 2009-10. The industry recovered temporarily in 2010-11, but remained stagnant in the following year as economic conditions weakened. The London Olympic Games increased demand in 2012-13, which enabled revenue to grow moderately. Despite the challenging conditions, online advertising revenue grew strongly during the past five years as consumers began assessing more media content online through tablets, smartphones and computers. However, the benefits to the industry were curtailed due to industry operators losing market share to firms operating outside the industry... purchase to read more
Industry Report - Industry Investment Chapter
Capital intensity is determined by comparing the human and capital equipment factors of production, using wages and depreciation costs as proxies. Comparatively high depreciation costs indicate high investment in depreciable assets like buildings and equipment, meaning high capital intensity. Conversely, comparatively high wage costs indicate high labour intensity.
The Advertising Agencies industry exhibits a low level of capital intensity. This is reflected by its capital-to-labour ratio of 1:9.19, indicating that for every £1 spent on capital equipment, an estimated £9.19 is spent on labour. Labour costs are estimated to account for 19.3% of industry revenue in 2013-14 and, after purchases, constitute the industry's largest cost component... purchase to read more