Creative Advertising Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Every organization and its procurement team look forward to negotiating the best deal while procuring a set of products or subscribing to services. Rate benchmarking involves price/cost comparison of more than one set of products/services to analyze the most efficient combination that can potentially help the procurement team in getting the optimum rate.

The cost of living in the US is generally higher than in the UK, resulting in higher employee salaries and higher service costs for creative agencies. The US market is larger, leading to increased competition and expertise. Creative agencies in the US are considered more experienced and have a longer history of providing advertising and marketing services. Creative agencies in the US are constantly investing in research and development to stay ahead of the curve. This includes the cost of hiring experts, conducting experiments, and testing new technologies. Requirements vary by market, for instance amongst US & UK owing to their demographics and customer preferences, which forces creative agencies to invest more time and resources in creating high-quality campaigns, further increasing the cost of their services.  France's cost of living is often higher than Brazil's, creative agencies there are paid more. Due to a smaller advertising market in France, there is less competition, which leads to higher rates. In France, advanced technologies like artificial intelligence and data analytics are more prevalent, but their implementation and upkeep can be expensive, which is driving up service costs. The French market is more demanding in terms of creative advertising when compared to Brazil, as it is a cultural hub which looks to create work that is both stylish and impactful necessitating that creative firms devote more time and money in producing campaigns of a high caliber, thus driving up the cost.

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Labor cost is one of the major factors in the overall costs associated with providing a service is cost. Therefore, if a company is offering its services at reasonable pricing, it must decide if the focus category should be kept in-house or outsourced. Before choosing a supplier and creating a bargaining strategy, the firm that decides to outsource must comprehend the variations in the compensation structures of suppliers.

According to our research, creative advertising manager at WPP receive a 5% - 10% higher base salary compared to the salary received by creative advertising manager working in companies such as Dentsu and Havas. However, the year-on-year increment rate in all these companies majorly depends on the Key Result Areas (KRAs).

Organizations may find it cumbersome to continuously track all the latest developments in their supplier landscape. Outsourcing the activities related to gathering intelligence allows organizations to focus on their core offerings. At this juncture, our newsletter service can help organizations stay updated with the latest developments and innovations and subsequently assist in preventing disruptions in the supply chain. We have identified the following developments within the creative advertising category over the last two years:

• In July 2023, Dentsu entered a partnership agreement with Microsoft to introduce enterprise-wide access to advanced Azure OpenAI technologies. Two new CXM solutions have already been created as a result of this partnership with Microsoft. They are “Merkle GenCX” and “AI Playground LATAM”. The former leverages generative AI to provide more impactful experiences for customers. The latter, AI Playground LATAM, is a region-focused set of customized solutions that combines integrated audience or consumer data with the latest technologies to increase daily efficiency and operational agility for clients.

• In April 2023, Amp, one of the top sonic branding companies in the world, was acquired by WPP. Amp's experience will improve WPP's experiential branding offerings and its capacity to provide customers with high-quality, distinctive, and ownable sound experiences.

• In January 2023, Fexy Studios, an award-winning creative agency that creates television shows, streaming and digital video programming, has been acquired by The Arena Group Holdings, which is an innovative technology platform that transforms media brands. Arena Group boosts streaming, sponsored content, television programming, sales, revenue generation using core brands, audience growth, and Fexy's production capabilities.