Industry Analysis & Industry Trends
The industry has grown overall during the past five years after declining in 2011-12. Demand was adversely affected by weak business confidence levels at the start of the period, which resulted in operators restricting their marketing budgets. The fall in real disposable income also dampened demand as pressure on household spending generally reduces the ability of advertising campaigns to attract more customers. The industry returned to growth in 2012-13, as the 2012 London Olympic Games stimulated demand. Revenue growth strengthened in the latter part of the period as economic conditions improved and business confidence levels began to rebound, allowing businesses to expand spending on advertising activities... 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 1:9.5, indicating that for every £1.00 spent on capital equipment, an estimated £9.50 is spent on labour. Labour costs are estimated to account for 19.9% of industry revenue in 2015-16 and, after purchases, constitute the industry's largest cost component... purchase to read more