Industry Analysis & Industry Trends
The industry has returned to growth during the past five years. Rebounding economic conditions and rising business confidence levels allowed downstream businesses to expand their marketing budgets, which enhanced demand for industry services. In addition, major events such as the 2012 London Olympics and the 2015 Rugby World Cup propelled demand for advertising services. However, demand for print media advertising dwindled during the period due to the significant fall in print media circulation. Households also endured household spending pressures. This restricted industry growth somewhat, as downstream businesses are generally more likely to increase spending on advertising activities when the purchasing power of consumers strengthens... 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 1:9.6, indicating that for every £1 spent on capital equipment, an estimated £9.6 is spent on labour. Labour costs are estimated to account for 20.2% of industry revenue in 2016-17 and, after purchases, constitute the industry's largest cost component. The.. purchase to read more