Advertisers Remain Optimistic About 2015

STUDY In order to provide a reliable forecast for 2015, the Center for Customer Insight at the University of St. Gallen, on behalf of bsw leading swiss agencies and with the support of the Swiss Association of Advertisers (SWA), surveyed over 1,300 communications managers at 500 companies and asked them about their expectations for the current year.The study was conducted by FCI-HSG via email in November and December 2014. The email addresses of the advertisers were collected by the two associations. 8 % or 108 people answered all the questions in the study. In some areas, the response rates were several times higher. The data was analyzed by the research center. The individual responses are confidential and cannot be viewed by the two associations.The study places a strong emphasis on marketing- and communications-oriented companiesCommunications managers from over 30 industries were surveyed. 88 % of these are either entirely or partially B2C-oriented, meaning they target end consumers directly. Consequently, marketing is highly prioritized in these companies. 86 % consider marketing to play a large to very large role. In a cross-comparison with studies by SW („The Economic Significance of the Advertising Industry in Switzerland 2013“), the published gross media investments in „Advertising Market Trend 2014/12“ by Media-focus, and estimates from bsw media agencies, this study represents approximately 1/7 of all total communications and media investments made in Switzerland.Assessment of the Swiss Economy in 2015 – Before and After the SNB Lifted Its Exchange Rate Floor78% In 2015, all advertisers generally expected the economy to continue on a positive trajectory, thus continuing the trend of recent years. This is not surprising, given that most companies have performed well over the past six years.However, it was not possible to determine the impact of the Swiss franc’s appreciation on the communications industry, as the survey was conducted before the SNB lifted its exchange rate cap. bsw leading swiss agencies and the SWA anticipate that the projected trend for 2015 could be somewhat dampened. As early as 2014, approximately 50 % of all companies were also active abroad and were thus directly affected by exchange rate fluctuations. Just under ¼ of all companies were already outsourcing individual contracts abroad in 2014—primarily for cost reasons. This trend could now intensify.Clients Achieve Success in Revenue and Profit in 2014 – Positive Trend for 2015

55% of the clients reported that their revenue increased in 2014, and 45% reported slight to strong increases in profits for 2014. Only 4% reported a significant drop in revenue and profits. These are fundamentally excellent figures that demonstrate just how healthy the Swiss economy ultimately is. For 2015, 64 % of the companies expected higher revenue and 49 % expected higher profits.Cautious Forecast for Communications and Media Investments in 2015These generally positive conditions are only reflected to a limited extent in planned communications investments. Just under half of all clients state that their communications and media budgets will not change significantly in 2015. One-quarter of clients are reducing their investments in communications and media this year, while another one-quarter are increasing them.It is not entirely clear—and ultimately difficult to understand—why the projected positive financial figures have not been reflected to the same extent in planned communications investments. Excellent communications, in particular, are a key driver of market success.In 2014, more than one-third was still spent on traditional advertising

In 2014, 35 % of the communications budget went to traditional advertising, and 17 % to digital or online communications. As a result, traditional advertising was able to maintain its leading position. This was followed by dialogue marketing with 10% and sales promotion and events/trade shows, each with a 9 % share of the budget.Continuing trend towards digital communication in 2015In 2015, the allocation of funds will change significantly. 75% of advertisers stated that they intend to allocate significantly more funds to digital and online communication, followed by dialogue at 37 % and sales promotion at 23 %. By contrast, only 13 % of all advertisers still intend to invest significantly more in traditional advertising. This trend is likely to intensify in the future.Demand for consulting expertise and proof of efficiency is on the rise in 2015As digitalization advances and channels become more complex, the demands on clients and agencies are increasing. Investment security is also becoming an increasingly important issue in communications, and demonstrable RoCI (Return on Communication Investment) is becoming a must. Accordingly, over 81% of all clients stated that they will invest more money in measuring efficiency in 2015. To achieve even greater communication benefits, 80% of all clients also plan to allocate more funds to strategic consulting, and 82% to brand consulting.This demand is being met by bsw agencies, which are also investing heavily in expanding their strategic consulting services and in efficiency measurement.In 2014, over 60 % of media spending continued to go to traditional channels

According to the advertiser, 28% of total media investments went to print media last year, 21 % to TV, 9 % to outdoor, 2 % to radio, and 1 % to movie theaters. This means that over 60 % of all media investments are still being channeled into traditional channels. However, the trend toward digital media is also evident in media investments. Already, 31 % (including company-owned websites) was invested in digital media, with the largest shares going to online advertising (10 %), search engines (5 %), email marketing (4 %), and social media (3 %). This trend will continue to gain momentum in 2015. Over 50 % of all clients plan to invest significantly more money in digital media, social media, search engines, etc.More Funding for Media Advertising in 201572 % of all advertisers plan to invest more money in media advertising in 2105. All media formats will benefit from this, including traditional ones (TV, print, outdoor, and cinema). Advertisers are planning a significant increase in media investments, particularly in digital media (53%), social media (49 %), and search engines (44 %). For advertisers, their own website remains one of the most important media channels. 28 % of all companies also plan to invest significantly more in this area.Major Challenges for the Communications Industry

As a result, the demands placed on communications agencies are also increasing. Clients rely on strong partners. They see the greatest challenges over the next two years in the growing complexity of communication channels (71%) and technological developments (48%). Combined with ever-shorter decision-making deadlines (42%) and growing indifference among the target audience (51%), it is becoming increasingly difficult to develop effective and efficient communication solutions at reasonable costs.However, advertisers also see a major challenge in the high media costs (42%) and the growing risk of losing control over data and rights (44 %)—an issue that has become significantly more pressing with digitalization. The study results are published at bsw.ch/News