Australian creative agencies recover from post-GFC commercial pressure according to Australian Agency Rates Report via Tick Boxer

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stable.jpgTick Boxer has just released its annual Australian Agency Rates Report. This year’s analysis shows definitive signs of charge rate recovery for Australian agencies in the post-GFC industry landscape, and a much-needed adjustment to the “age of procurement”.

 

The 2013 data (which was collected from over 130 agency rate cards across Australia) has revealed three central trends across all agency disciplines.

  • Average rates are stabilising: Many of the average charge rates that dropped consistently for several years running have remained steady in 2013, and there are some areas showing evidence of market corrections taking place – predominantly across the Creative, Digital and Account Service disciplines.

Account Service Charge Rate Averages over three years. We are seeing stabilisation and some corrections to previous rate drops.

  • Agencies are diversifying their services: Commercial pressure has driven agencies to revamp and diversify their offerings to protect against damaging charging trends or commoditisation in the future. Many agencies are broadening their services beyond creative and production into more technical and data-driven areas, introducing new roles and hiring new people with these skills.
  • Innovative charging models are being introduced: There is also innovation occurring with charging models – many agencies are moving to implement non-traditional fee structures to protect against competitive comparison and the threat of commoditisation. Offshore outsourcing is growing in popularity to reduce the production cost of commoditised items which can be the source of debate locally.

 

Says Debbie Pine, Tick Boxer: “Our analysis clearly shows owners/managers of creative agencies how they can commercially grow and what is happening across their industry. We’re really excited about the trends showing in this year’s report. For the last few years, we’ve seen agency rates being consistently whittled down, to the point where businesses really start to struggle, but this year, we’re finally seeing corrections taking place, which is great news for the industry. Plus with the introduction of new niche services and skills, the industry is being refreshed and starting to take the front seat again with clients and their communications strategies.”

Tick Boxer’s analysis finds that agencies are now taking a more proactive stance in the face of industry conditions by changing their revenue models, eliminating threats and reinventing their skills. While attempts to do this in the past had mixed results, 2013’s unique combination of factors – easing of immediate commercial pressure, advancement of a new generation of digital natives, and the radically different media landscape – have provided the perfect setting for agencies to turn around the unfavourable commercial conditions seen across the industry in recent years, post-GFC.  

geo 2013.jpgSays Nadine Rimmer, Tick Boxer: “We’ve finally reached the point where agencies can no longer just ‘do more with less’ and the market has forced them to adapt to tougher conditions by innovating within their own business instead of being so outwardly focused. We’re really happy to see more value being placed back on some role types, as the end result of such widespread commoditisation as we’ve seen in recent years is often low quality work, which won’t deliver a result for the client in the long run.”