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The advertising market rose to a value of
£9.15bn in 1993, an increase of 4.3 percent on 1992, but growth is still lower
than most UK advertising agencies came to expect during the 1980s. Many
agencies are still struggling under debts they took on during the period of
expansion, and advertising expenditure is no longer growing in line with
economic growth as it used to.
The leading agencies in the UK in 1994
were Saatchi & Saatchi Advertising, Ogilvy & Mather, AMV.BBDO,
DMB&B and J. Walter Thompson. The UK is home to two of the world's largest
advertising agency groups, WPP Group and Saatchi & Saatchi. They operate
mainly through large US subsidiaries that were acquired in the 1980s,
principally Ogilvy & Mather and J. Walter Thompson (WPP) and Backer
Spielvogel Bates (Saatchi & Saatchi). These giants of the US advertising
sector have long operated on a worldwide basis.
The WPP and Saatchi
groups both offer their clients a variety of non-media marketing services such
as market research or public relations through dedicated subsidiaries. Most
other UK advertising agencies specialise in TV and press advertising and direct
mail campaigns. There has been a trend for agencies to hive off their
media-buying departments into separate subsidiaries in order to attract
media-only work, sometimes setting up jointly-owned `media agencies' with other
full-service agencies.
Globalisation is taking place in the mainstream
advertising business and UK agencies are closely involved in this development
through WPP and Saatchi & Saatchi. The top French companies, Publicis, Euro
RSCG and Carat, are also developing strong Europe-wide businesses.
One
of the largest US groups, Omnicom, has acquired the largest UK direct marketing
agency, WWAV Rapp Collins, and this has emphasised the growing importance of
direct marketing using computer databases of customers. Integrated marketing is
the new trend, involving a strategic combination of `image advertising' in the
main media with techniques such as direct mail, telephone marketing and direct
response advertising. However, the press still accounts for over 60 percent of
advertising expenditure and the shares held by traditional media such as
terrestrial television, outdoor posters and radio are fairly stable.
Text © 1994 Key Note
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Last updated by Duncan Nottage 5th March 1999