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Product Title:  Advertising Agencies (Market Assessment)

Executive Summary

In a speech to the 2004 Incorporated Society of British Advertisers (ISBA) conference in March 2004, Tessa Jowell, Secretary of State for Culture, Media and Sport, stated that the issues faced by the advertising industry are central to the future of public policy, dealing with questions 'at its very heart'. These questions are:
  • What role should the Government have in promoting a particular type of lifestyle?
  • What responsibility do citizens have to take informed choices - 'to make their own weather'?
  • How should business operate in this environment? How can business be socially responsible but still competitive?

The issues to which Ms Jowell was primarily referring were obesity and healthy eating; these, along with the other major health issues of smoking, drinking and exercise and the role advertising has within these issues, were the matters of most concern to the advertising industry in 2004.

So-called 'unhealthy foods' can be classified into six categories: carbonated drinks; crisps and savoury snacks; fast-food restaurants; preprepared convenience foods; presugared breakfast cereals; and confectionery. These are known collectively as the 'Big Six'. Key Note has calculated that just three of the Big Six - carbonated drinks, crisps and savoury snacks, and preprepared convenience foods (including frozen pizza) - represented almost a fifth of all food advertising expenditure in the year ending June 2004. Chain restaurants, such as McDonald's and KFC, are classified as retailers; if these are included, Key Note has found that expenditure in these categories accounts for 2.4% of advertising across all of the main product groups, including financial products, leisure, travel and pharmaceutical products. It is not, therefore, surprising that the industry is looking at this issue very seriously indeed: huge revenues would be at stake if any kind of advertising ban were imposed.

However, can the industry regulate itself effectively? And is it doing enough? Key Note commissioned BMRB Access to survey a representative sample of adults to discover what they thought about how advertising is aimed at children and to find out how aware they were of measures the industry is taking to educate children in order to be more media literate.

The report also looks at the Office of Communication's (OfCom's) own research among children and parents. This research has led the regulator to believe that an outright ban on advertising food products to children would be counterproductive. Key Note also considers responses from the major trade associations to this and to other proposed advertising restrictions - most notably on alcohol advertising - and finally examines what implications these have for the future in the light of the resulting government White Paper, Choosing Health.

Almost all talk of advertising restrictions refers to restrictions in broadcast media. This commands the largest share of the marketing wallet, but expenditure in this sector has been declining since 2000. 2004, however, saw an increase in almost all advertising expenditure; Key Note estimates an overall increase of 5.8% for 2004 compared to 2003. Internet advertising expenditure continued to grow at a higher rate than all other media expenditure, but this still accounts for only 3.2% of total expenditure.

The industry continues to be dominated by the largest global corporations, with Omnicom and WPP increasing their market share from their nearest rivals: both companies are examined in detail in this report, which also looks in detail at the newly formed ITV PLC, a result of the merger between Carlton and Granada completed in early 2004. Another major media owner is also featured, this time in print and radio: the Guardian Media Group, which also owns arguably the largest UK online newspaper property, Guardian Unlimited.


Price: £ 799.00 GBP ex VAT (£ 938.83 GBP inc VAT )
Publication date: 31 Jan 2005
Licence period: 365 days
 
 

 
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