Advertising Services Procurement: Strategies, and Supplier Management in a Dynamic Marketplace

The advertising services category is expected to register a CAGR of 5.9% from 2023 to 2030. In 2022, North America accounted for 36% of the overall share followed by Europe and APAC. The increasing demand for short content and video ads, the increasing internet penetration, and the growing number of smartphone users are driving the growth of this category. For instance, in 2022, there were 244.4 million digital video viewers in the U.S. alone. According to Business Insider, more than 97% of U.S. users aged between 12 and 44 years consume a high amount of digital video content.

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In a 2023 survey, it was found that more than 91% of consumers want more digital content from brands which in turn is driving the demand for video advertising. More and more companies/brands are including video content as a part of their digital marketing strategy to capture the audience’s attention. The return on investment is high for video marketers as they get 66% more leads per annum and can achieve a 54% increase in brand awareness. In 2022, almost 82% of internet traffic came from video streaming and downloads. One of the top technological trends is the increased adoption of chatbots and conversational AI in the digital marketing space. Voice searches, such as Cortana and Google Assistant are rising in popularity in the content marketing and advertising sector, which is expected to aid small business’s growth.

The total cost of advertising services depends on multiple factors such as the type of ad, type of digital platform, complexity of the campaign, location, and strategy used to promote the products & services. On average, the prices for a project can range between USD 1,200 and USD 10,000 per month. Some of the services under advertising packages can include PPC ads, social media ads, display ads, banner ads, or influencer ads. Some companies have tier-pricing models such as basic, premium or professional, and enterprise level.

A basic service can range from USD 100 to USD 5,000 per month and can include 2,000 to 3,000 keywords, Google PPC network, campaign development, strategy, copywriting services, etc. A premium or professional tier advertising service can range between USD 5,000 to 30,000 per month and can include network connections, 10,000 to 15,000 keywords, third-party audience targeting, account-based retargeting, CRM pipeline targeting, funnel measurement, landing page setup, etc. For an enterprise-level package, prices can start from USD 35,000 and can increase based on project complexity. Few services under the enterprise level may include connections to multiple networks, 15,000+ keywords, display ad creative sets, tv commercial ads, etc.

Access the Advertising Services procurement intelligence report 2023-2030 , published by Grand View Research, to get more details regarding day one, quick wins, portfolio analysis, key negotiation strategies of key suppliers, and low-cost/best-cost sourcing analysis

Advertising Services Sourcing Intelligence Highlights

• The global advertising category is moderately consolidated due to increased forward integrations by leading players such as WPP, Publicis Groupe, Omnicom Group, etc. More than 45% to 50% of the overall share is made up of the top fifteen players.
• Suppliers command a higher bargaining power due to this consolidation. Companies have a high reliance on advertising agencies to boost and enhance their brand growth. Another favoring factor is that agencies can work across any industry and many industries
• Production, office expenses, and labor form the largest cost component of advertising services. Production cost components include digital marketing and social media tools, SEO and PPC, software integrations, cameras, projectors, other digital tools, etc.
• From a sourcing perspective, the companies mostly prefer approved provider models to reduce the risks and increase the potential for value creation

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List of Key Suppliers in the Advertising Services Category:

WPP Plc, Omnicom Group, Publicis Groupe, The Interpublic Group of Companies, Dentsu Inc., Hakuhodo Inc., Havas SA, MDC Partners, Publicis Sapient, Lamar Advertising, BBDO Worldwide, Epsilon Data Management, LLC, Accenture Song, BlueFocus Communication, Starcom Worldwide. Inc

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Advertising Services Category Procurement Intelligence Report Scope

• Advertising Services Category Growth rate (CAGR): CAGR of 5.9%
• Pricing growth Outlook: 10 - 15%
• Pricing Models: Value-based pricing model and fixed price pricing model
• Supplier Selection Scope: Cost and pricing, Past engagements, Productivity, Geographical presence
• Supplier selection criteria: Digital marketing, SEO and PPC, email and social media marketing, content creation, print advertising, radio and tv commercials, software integrations, technical specifications, operational capabilities, regulatory standards and mandates, category innovations, and others.
• Report Coverage: Revenue forecast, supplier ranking, supplier matrix, emerging technology, pricing models, cost structure, competitive landscape, growth factors, trends, engagement, and operating model