SNAPSHOT OF THE UK MARKETING AND COMMUNICATIONS INDUSTRY 2015

The blurring of disciplines and the rise of digital. How are you responding to change?

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Standing up despite identity issues and competition What does a typical agency look like today? With so much diversity among firms, so many blurred lines between disciplines, it’s almost impossible to describe.

Once agencies stuck to the rules. They wore the badge of either ‘PR’, ‘events’ or ‘advertising’. Everyone knew what they were. But the digital age has put pay to that. Driving a host of new and emerging disciplines, it is changing the way firms think about themselves and the services they provide.

Is your firm rising up in the wake of a new digital dawn?

Employee growth rates in the past year:• PR - growth = 13.9% / number of employees = 3,740

• Digital and advertising - growth = 2.9% / number of employees = 15,320.

• Market research: growth = -0.3% / number of employees = 3,205. *1

72% of B2B agencies saw financial growth in the latest financial year, according to B2B Marketing’s 2014 Agencies Report.*6

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Digital dreamsThe world is falling in love with digital. Demand for internet-based services is booming. Today’s agency client wants to capitalise on new and innovative ways of reaching out to their audience.

The industry’s biggest players are responding by turning challenges into new opportunities. They are striving to offer clients an integrated, multimedia approach to realising their ambitions.

Business leaders are constantly challenged to keep ahead of the latest online trends, technological and networking developments. From social media to blended, multi-disciplined campaigns and big data. Staying current is a priority for client and suppliers alike.

”News that the Direct Marketing Association has decided to launch a Search Council points to digital’s propensity for ’marketing mash-up’. Search is blurring into direct, PR is morphing into social media and social media is meshing into search.” *2

The Guardian

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Opportunities and optimismSuch marketing convergence brings with it opportunities for diversifica-tion, growth and expansion. As well as expanding their service portfolio, there is little to stop agency leaders looking for joint venture opportunities overseas.

For this robust, collaborations platforms are fundamental for assisting in communication and job progress. Sharing a unified, centralised business information platform for resourcing, planning and finance will keep local offices and teams aligned.

Yet convergence among services and agencies is not the only opportunity for marketing agencies in 2015. The B2B Marketing’s annual agency report states that ‘marketing planning/strategy’ is the service which generates the most revenue for B2B agencies. *4

”We have to equip our agencies with the skills, attitudes, talent and patience to help our clients and ourselves innovate our ways to growth.” *3

Marketing Agencies Association, chairman Ian Millner

”The convergence of digital channels is blurring the boundaries of marketing disciplines, opening up fresh creative opportunities.” *2

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74% of the top 70 B2B agencies surveyed by B2B Marketing said ‘marketing planning/strategy’ was their top revenue generator and 84% said this was their main focus area. Emerging discipline ‘content marketing’ was the main focus for just 39%. *4

Indeterminable identitiesFor focused agencies, the constantly changing environment provides a hotbed of opportunity and prospect. But, for some, the flux-like state of the industry feels unsettling and overwhelming.

For organisations struggling to know which way to turn and which avenues to pursue; technology is pointing them towards a path of prosperity.

Industry-related platforms like enterprise resource planning systems (ERP) have helped firms regain a stronghold on their futures. They provide vital business information to help answer questions such as:

• Should we diversify?• Are our traditional services providing the margin we want?• Which clients are opting for which services?• Do we have the skills in house to deliver?

Which direction will your agency take in 2015? What are the top trends for agencies in 2015? According to Forbes it’s content marketing, social media and mobile marketing. *5

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A contest for clientsWith barriers to entry relatively low, agency sector is becoming flooded with start-ups and freelancers. Boutique agencies and overseas enterprise cause fierce competition over clients and contracts. It’s been a lot for business owners to take.

How is your agency faring?

Your marketing company may own unrivalled creative talent. But creativity on its own is not enough to succeed in the face of such competition. A flourishing business relies on more. It needs great skill, planning and foresight. It also pays to compare your firm against industry norms. These qualities and practices will help you:

• understand the environment in which you operate• be aware of how your firm measures up in the industry• have an idea of what needs to be improved so that you can take the

steps necessary to join the best

Trailblazers’ dream or traditionalists’ nightmare?What’s your opinion of the industry you work for? Fast paced and full of opportunity? Complex and difficult to predict? Regardless of your answer one thing has to be true: the playing-field is certainly no place for the feint hearted.

Yet with the right approach, technology and vision for the future it is possible to overcome the unpredictable nature of the beast.

Do you have the mettle to thrive?

Turn your agency endeavours into profit?

>> Explore more

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Costing concernsMaximising revenue is also on the minds of agency owners. Recovering billable time for some is a serious issue.

Is it time for the industry to improve its financial grip?

Research shows only 70% of time is billed to clients. Smaller agencies are most at risk. This can lead to a number of pitfalls. Clients may come to expect an increasing amount of work from you. Your teams loose respect for planning and timescales. Staff may become overworked and demotivated.

But there are things you can do.

“Clearly, there is a correlation between maintaining a degree of control over staff costs and delivering reasonable profit margins. It’s interesting to note that the best performers keep their employment costs to within 52% of gross income – within the benchmark maximum of 55% and almost no business spending above 65% of their gross income on staff costs delivered anything close to a good profit margin.”Ian Graham, partner at Kingston Smith W1

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Four ways to avoid over-servicing.

>> Explore more

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IS YOUR FIRM PREPARED FOR THE FUTURE?

Do you have the right approach? If you want to discuss how technology can help you respond to change and flourish in the market.

Ashley Millerashleymiller@deltek.com+44 (0)20 7518 5010

References:*1: Statistics sourced by www.consultancy.uk commissioned by Deltek March 2015*2: The Guardian ‘The key to marketing integration is fluidity between budgets and disciplines’ article August 2012*3: The Guardian ‘2013 for marketing agencies – the end of year roundup’ article *4: B2B Marketing ‘’Marketing planning’ top revenue generator for agencies’ article November 2014*5: Forbes ‘The Top 7 Online Marketing Trends That Will Dominate 2014’ September 2013*6 B2B Agencies Report 2014 article November 2014