The true scale of the global marketing industry has been laid bare in a new survey, which calculates that the sector is now worth $1.7tn worldwide – far higher than previous estimates – although there are storm clouds ahead.
Compiled by equity research firm Redburn and PwC the healthy top-line figure belies undercurrents of turbulence, particularly in paid media, which has fallen year on year as a proportion of total spend. Traditional agencies are also now expected to weather a tougher environment going forward than previously thought.
To make sense of competing views of the true scale of the industry the pair undertook a proprietary study of all traditional paid and digital media, in addition to owned media, paid promotions, sales promotions and investments in data and marketing technology to arrive at their attention-grabbing headline number.
Paid media as a proportion of total expenditure is expected to slide from 42% in 2015 to just 37% in 2018. Instead these dollars have been diverted toward owned media and marketing technology. Another trend identified by the authors was a preference for call-to-action activities over brand marketing, with potentially negative consequences for some traditional business models.
Bianca Dallal, partner at Redburn, commented: “The evolution of marketing expenditure has profound implications for agencies, media owners and brands. Our study reveals that as budgets shift away from paid media, the reliance on intermediaries falls, with negative implications for traditional agencies.”
The survey was collated from the detailed responses of 120 senior marketing executives, pointing towards a slowdown in growth for the period 2019-21.