LSA/SWA Advertising Market Study: Advertising Clients Optimistic for 2018
Once again, Leading Swiss Agencies (LSA) and the Swiss Advertising Clients Association (SWA) have conducted an advertising market study. The study aims to provide the advertising market with insights into developments in the communications market in order to support agencies and clients in making their collaboration even more effective and efficient.
More than 60 percent of those surveyed rated the current mood in the company as positive. Likewise, as in the last two years, an increasingly positive sales development is noted: For 2018, almost 2/3 of respondents expect a slight to strong increase and only just 7 percent of clients anticipate a slight to strong decline this year.
Top 3 Challenges for the Swiss Advertising Industry: Digitization, Channel Fragmentation and Media Usage Behavior
The complexity of communication due to the advancing digitalization will challenge the advertising industry the most in the coming years. This requires agencies that can successfully design and implement target group-relevant overall solutions with a great deal of professionalism and consistently high quality.
Unsurprisingly, the top 3 trends in communication are online advertising, social media and content marketing, which will be the big topics in the coming years. Compared to the previous year, topics such as big data and mobile marketing (among the top 3 topics in the 2016 study) seem to have become part of everyday life.
Digital communications and online the fastest-growing area of investment
The advertising market study confirms the development of communications and media budgets in recent years: As in the previous year, clients want to invest even more in digital communications & online advertising in the next few years. Investments in dialog marketing and direct advertising are also rising. In contrast to the previous year, the areas of "events/trade shows" and "sales promotion/POS" - i.e. measures for the personal brand experience - are gaining in importance.
As expected, media budgets are continuing to shift to digital and online media. Digital/online, social media, and TV will see the biggest increases in media budgets in the coming years. Investments in print continue to decline.
The most important criteria in the choice of agency are competence and employees
Agency competencies and the personality/qualification of employees are clearly the most important criteria for 2/3 of respondents when choosing an agency. Know-how and smooth, understanding cooperation at a high level is an important, if not the most important, success factor for outstanding communications performance, measured against the current challenges and technological developments in communications.
Leading Swiss Agencies has been operating an agency search on its new website since fall 2017. Principals can easily and quickly find LSA agencies according to their competencies and current work and create a watch list. In the near future, the function will be expanded and principals will be able to invite participants to share the watch list with them. The goal of the agency search is to provide guidance and transparency in the agency search. It is worth taking a look at the new website: leadingswissagencies.ch.
Most important success factor of a long-term business relationship: effective, sustainable creative ideas
Advertising clients have recognized that the complexity of today's communications requires creatively outstanding, strategically sound and target group-relevant communications concepts in order to deliver effective communications work. This demands a great deal of know-how, competence, far-sightedness and constant quality in the work of the agencies. High demands that the leading communications agencies prove every day together with their clients.
Over 80 percent of clients are satisfied to very satisfied with their LSA communications and media agencies
Communications agencies score particularly well on the high qualifications/personality of their employees and their expertise in creation, strategy and brand management. Media agencies also excel in the high qualification/personality of their employees, as well as in the commitment of their managers, realization, cross-media and digital competence.
Fee models: Effort-based remuneration as the most important fee model in 2017
More than 40 percent of the clients stated that they most frequently compensate their agencies on a time and material basis (with or without a cost ceiling). This also corresponds to the preference of the study participants. If they could choose, they would also prefer this model. When asked about the use of performance-based compensation components, 25 percent of the clients use a corresponding model.
The Advertising Market Study 2018 shows the growing importance of digitization in communications, which is both a challenge and an opportunity for clients and agencies. Essential for success in the digital environment will be the quality of collaboration between clients and their agencies and the ability of agencies to continue to develop innovative, target group-oriented and holistic communication concepts.
