Agencies and clients are optimistic for 2014

In order to provide a reliable forecast for 2014, BSW leading swiss agencies - for the first time in collaboration with the Research Center for Customer Insights at the University of St. Gallen - wrote to over 1,200 communication managers in 500 companies as well as all CEOs of BSW agencies and asked them about their expectations for the coming year. The study is to be repeated annually.

Two thirds of all advertising clients expect a generally positive economic trend in 2014. Over 60% of clients stated that turnover had increased in the last five years, and a good half reported slight to strong increases in profits. Only 5-6% complained of a significant slump in turnover and profits.

Nadine Borter, President of the association, also wanted to venture a positive forecast for the future based on the new study. 80 percent of all clients stated that marketing and communication is of great to very great importance and will continue to be in the future. Accordingly, two thirds of all clients plan to maintain or even increase their investment in communication in 2014.

Strong diversification of communication investments

For the first time, the total marketing communication investments of Swiss clients were analyzed according to the individual areas in which the money is spent. Almost a third is spent on traditional advertising, i.e. media such as TV, radio, print (newspapers, magazines), outdoor/posters and cinema, 15 percent on digital communication, 11.6 percent on direct advertising, 8.1 percent on sales promotion, while the areas of strategy consulting and efficiency measurement already account for around 5 percent.

More dialog via digital channels, more efficiency

82% of all advertising clients stated that they intend to invest even more money in online communication in the coming year. Online dialog with customers will continue to gain in importance. At the same time, 85% of clients want to invest the same amount or even more in sales promotion. The study also shows that clients want to see the success of their communication investments even more quickly and directly.

Accordingly, 96% of all clients stated that they would invest the same or more money in efficiency measurement in 2014. Efficiency is apparently everything. In order to achieve even greater communication benefits, 81% of all clients will also make the same or more money available for strategy consulting.

Major challenges for the Swiss advertising industry

Clients are dependent on strong partners. They see the greatest challenge over the next three years in the increasing complexity of channels (72%) and technological developments (65.3%). Coupled with ever shorter decision deadlines (66.6%) and an increasing indifference on the part of the target audience (92%), it will become increasingly difficult to develop good and efficient communication solutions at a reasonable cost.

Optimistic expectations and profit warning on the agency side

The high expectations of clients give cause for optimism on the agency side. For example, it is positive to note that only 15% of all clients intend to reduce their communication investments in the coming year. Accordingly, 68% of all agency bosses expect gross operating income to increase in the coming year. The future expectations of advertising and specialist agencies are even slightly more positive than the average, while media agencies are somewhat more cautious.

However, this does not mean that gross profit is also expected to increase. This is because it has already fallen continuously in recent years and remains under strong pressure, not least as a result of increasingly complex demands on the range of services offered by agencies, combined with the growing requirement to deliver even more cost-effectively in even less time.

Ranking advertising agencies 2013

Ranking media agencies 2013

Andreas Widmer, Vice President (Y&R Group), Nadine Borter, President (Contexta), Peter Leutenegger, Managing Director BSW leading swiss agencies (Photo:pan)