Read Time: 4 minutes
As the world is getting more and more digitalized, there’s a battle between consulting and outsourcing firms and traditional advertising agencies. If statistics are anything to go by, consulting and outsourcing firms are slowly but surely nudging ad agencies out of their own turf.
As of January 2017, 51 per cent of the global population – which is over 3.5 billion people - has access to the internet. Forty-four per cent of the world population owns a smartphone and 20 per cent of the world's population (7.5 billion and counting) has shopped online within the past 30 days.
Little wonder then that marketing spends of companies are rapidly shifting towards digital medium. In 2016, the market share of digital ad spend was 34.8% globally against 65.2% of traditional spend. A year later, digital had grabbed 1.8% more market share of the traditional spend, touching 37.6%.
The worldwide digital spend for marketing has been growing consistently at 16 % CAGR since 2015, and is slated to touch over US$ 336 billion by 2020. The fastest growing markets are India with 35% growth and China with 22% growth between 2016 and 2017. In the US, digital grew at a more moderate rate of 11% but still much faster than the economy as a whole.
Technology is disrupting the marketing industry in more ways than one. All of the key marketing trends today are technology related where data, analytics, digital footfalls and behaviors are ruling the roost. Given their capabilities around these broader technology themes, consulting and outsourcing firms are better prepared to meet these challenges and have started taking market share away from ad agencies. For example, some consulting and outsourcing companies have tried to form a “digital native” marketing agency model having a strong platform around automation and analytics. Multiple consulting and outsourcing companies have already crossed USD 1Bn in revenue from the digital marketing space. Accenture, IBM and Deloitte reported USD 4.4 billion, 3.0 billion and 2.6 billion in revenue from digital marketing in 2016.
Read Time: 3 minutes