Future

The outlook for the future is still cautious with the industry facing into a challenging, uncertain phase. This uncertainty is reflected in the wider business arena as Brexit still looms large. The latest KBC Bank sentiment index from July 2018 showed that only 7% of companies say the consequences for their business operations have become clearer of late while 17pc say they have gotten less clear.

The reality is that advertising and media agencies are facing many of the same challenges and opportunities as the wider media and communications landscape. The successful ones are realigning their business models with emerging and future client needs, both through leaner and more efficient processes for media buying etc, but also through investment in the type of advisory and strategic skills and services that will remain immune to disruption for the foreseeable future (just look at the success of the PR industry in this regard).

There are, therefore, signs that our confidence is returning as the industry seeks to reassert itself as a vital part of the growth engine for Ireland Inc.

The Irish success at Cannes Lions this year, the world class standard of entries in the 2018 ADFX Awards, and the increased success in winning international business is allowing our collective work to speak for itself. We now have the evidence and case studies that demonstrate the strategic, commercial and creative value of our industry.

The opportunities cited by respondents are a good indication of how the senior industry leaders are looking to transform their business and compete on the world stage.

Emerging trends indicate a continued downward pressure on rates and margins from an equally pressurised client base.

The recession is over, the recovery is gathering momentum and yet business seems tougher than ever for many in the sector. Some of this may be explained by the normal ebb and flow of competition, pitch wins and losses, as well as the usual uncertainties of change in a sector shaped by ‘fashion’ as much as economics.

But there’s more at play than the challenges we’ve all dealt with before. That little word ‘disruption’ hardly does justice to the scale, pace and nature of the changes affecting agencies and their clients. When clients are no longer certain that their business model will survive the next few years, it’s hardly surprising that they look to their creative and media agencies to help them navigate a rapidly changing environment. At the very least clients should be seeking their advice. But too often, clients look on their agencies as cost centres rather than partners, ending in a negative sum game of procurement, fixed or falling fees, and ultimately a sense of mutual disappointment if it doesn’t work out.

For instance, there is a lot of discussion around the increase in Procurement decision making power, however, the percentage of clients using procurement departments has only risen by 4% over the past five years.

The industry has become very cognisant of more external threats, including the looming problems posed by Brexit, as well as competition from large digital firms such as Facebook and Google.

However, the industry is set to meet these challenges head on – staff levels are anticipated to increase by more organisations than in the previous year, and growth expectations remain high.

The challenge to agency leaders remains the same: to keep their teams focused and working together on delivering profitable work for clients while investing in the services, skills and technologies that will build a sustainable future for their businesses. It’s a big ask, which is why it feels tough some of the time. Agencies that can stay the course will reap the benefits of growth and success in the years ahead. This growth and success will feed directly to the growth and success of their clients which in turn will drive the growth and success of Ireland Inc.