Seven-in-ten advertising leaders reckon that the industry is recovering but only a small proportion foresee marked growth in the near future, according to a recent survey from the American Advertising Federation (AAF).
The poll of prominent figures in the US advertising industry found that a clear majority thought that a revival was underway. However, only 16% of those questioned believe that this represents a sustained upturn. Just over half of respondents feel that the market is recovering slowly but there is no prospect of strong growth.
| Current Characterisation Of The Advertising Industry |
| |
|
| Description |
Percentage (%) |
| Bottomed out, but recovery uncertain |
10 |
| Recovering slowly, but no prospects of strong growth ahead |
54 |
| Recovering well, with strong growth on the way |
16 |
| Other |
21 |
| Source: American Advertising Federation, September 2003 |
Advertising bosses were also asked to state the main lesson to be learned from the boom/bust cycle of the last five years. Some 45% stated that in future steps should be taken during a growth period to prepare for downturns. A further 22% said that it was now apparent that brands that invest in advertising during slow periods can achieve significant gains. The industry was also told to be wary of spending without accountability (16%) and to avoid overdependance on a single category (12%).
Reflecting on the last five years, some 80% of advertising leaders claimed that increasing audience fragmentation and media proliferation had been significant changes within the ad industry, and 77% beleieve this fragmentation will continue to have a major impact in future. Some 78% of respondents said ownership consolidation of advertisers, agencies and media companies as a major development while around two-thirds cited increased accountability and demand for ROI.
The survey also revealed growing recognition about the merits of multiculturalism with 88% of ad industry leaders acknowledging that it had become more important with shifts in US demographics. Along with audience fragmentation, the convergence of content and marketing and the impact of new technologies such as TiVo, it is expected to have a considerable impact over the next five years.
| Trends Having Most Significant Impact on Advertising Industry Over Next Five Years |
| (Percentage Of Industry Leaders Agreeing) |
| |
|
| Factor |
Percentage (%) |
| Increasing Audience Fragmentation |
34 |
| Convergence Of Content & Marketing |
21 |
| New technologies (e.g. TiVo) |
16 |
| Continued Growth Of Multicultural Advertising |
16 |
| Continued Growth Of Internet |
7 |
| Increase In Television Clutter |
5 |
| Source: American Advertising Federation, September 2003 |
