Industry Analysis & Industry Trends
Despite declining in 2011-12, industry revenue has grown relatively consistently over the past five years. Demand was adversely affected by weak business confidence levels at the start of the period, which resulted in firms restricting their marketing budgets. The fall in real disposable income also dampened demand as pressure on household spending tends to limit the success of advertising campaigns. The industry returned to growth in 2012-13, with the 2012 Olympics stimulating considerable demand. Revenue growth strengthened during the following years as economic conditions improved and business confidence levels began to rebound. Online advertising revenue grew strongly from the start of the period as the number of consumers with easy access to the internet increased... 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 1:9.61, indicating that for every £1.00 spent on capital equipment, an estimated £9.61 is spent on labour. Labour costs are estimated to account for 20.2% of industry revenue in 2015-16 and, after purchases, constitute the industry's largest cost component... purchase to read more