Dive Brief:
- Technavio’s Global Creative Agencies: Procurement Intelligence Report 2017-2021 report found that creative agencies are expected to have a compound annual growth rate of 5.58% over the next five years per a press release from the research and advisory company.
- Part of this growth is based on projected cost savings for creative agencies from a number of areas including: technology adoption, supplier competition, negotiation strategy adoption, optimization of procurement practices and bundling of services.
- “Currently, the overall creative services market is witnessing an increase in demand and supply innovations across industries due to the direct impact of promotional activities on firms' revenues,” said lead Technavio procurement expert Angad Singh in the press release, adding that growth can also be attributed to an increase in the marketing budgets of companies across sectors.
Dive Insight:
Cost savings from technology adoption could arrive thanks to augmented reality, something suppliers and buyers will begin using to provide composite views of products and services. AR could have the bigger long-term potential compared to virtual reality, according to recent research.
In terms of optimizing procurement practices, the evolution of channels and platforms like social media to get messaging and advertisements in front of audiences will be a plus for creative agencies. While there have a number of recent examples of brands taking content marketing in house, Forrester recently forecasted a swing back to the use of third-party entities as content marketing needs continue to grow.
The growth in native ads was cited by the report as another boon for creative agencies as the format has “potentially high CTR” compared to website banner ads.
Overall, the Technavio report should provide some solace for creative agencies at a time when the industry is in something of a state of flux, and brand/agency relationships are relatively fragile. While the projected growth is predicated on increased marketing budgets across a range of business sectors, the report also makes it clear that creative agencies will have to actively streamline and optimize the way they do business while taking advantage of tech and other advancements over the next five years.