The ‘Do It Yourself’ economy is not killing the experts. Sites like 99designs have made it easier to get a low cost logo. The ability to launch a poll is so easy any monkey can seemingly do one. Instragram, Google and others empower self-helpers to be their own ad planners. Squarespace makes websites easier than ever. Xero has put powerful accounting tools in the hands of businesses of all sizes and skills. One would expect that the future of experts is on the decline.
As Mark Twain once said …
“The reports of my death are greatly exaggerated.”
If we take a look at a sector like newspaper publishing (according to IBISWorld data revenue is down 8.6% 2012–2017) or free-to-air television (down 2.2% 2013–2018 IBISWorld) there is clearly a decline and need to revisit, consolidate and adjust the product for a new world.
Professional service sectors such as accounting, advertising agencies, digital agencies, design services, public relations, media buying agencies and market research are all continuing to grow revenue in Australia according to IBISWorld, with growth rates of between 1% (Design) and 16% (Digital). Forecast annual growth 2018 to 2023 is similar, e.g. Market Research 3%; Advertising 3%; Digital 16%; and PR 3%. Average profitability is between 12% (Advertising) and 15% (Market Research) for these sectors according to the IBISWorld data.
The strongest revenue per business and staff per business in these professional service sectors is from Digital Agencies (average revenue of approximately $1.5M and 8 staff); Public Relations (average revenue $1.2M and 11 staff); and Market Research (average $1.2M and 5 staff). According to Australian Bureau of Statistics figures, only 12% of Australian businesses employ five or more staff (ABS 8165.0 — Counts of Australian Businesses, including Entries and Exits, Jun 2012 to Jun 2016).
Based on staff per business, Design (average revenue of approximately $348,456 and 2 staff), Advertising (average revenue $379,176 and 2 staff) and Media Buying (average revenue $290,951 and 3 staff) are the smallest average revenue and staff numbers according to the IBISWorld data. These sectors are facing a high volume of smaller businesses competing with much larger businesses, and a large number of freelance / sole operator businesses, likely from redundancies and changes in the market.
On a revenue per staff side, Market Research is at the top of the leader board (approximately $220,897 per person employed), followed by Design ($211,033 per person employed). On the lower end of these sectors is Media Buying ($88,652 per person employed) and Public Relations ($118,069 per person employed).
Sectors such as Market Research are continuing to perform well, grow and innovate. According to global market research revenue data (released in late 2017), the annual turnover in 2016 combining traditional market research ($44B US) and newer research methodologies ($28B US) was $72Billion US. Social media monitoring and online analytics have displayed the strongest growth, with spending among social media networks up by 5%, and spending on online analytics up by 8%. “This is the most significant growth for the traditional global market research sector since 2010” ResearchLive.
Lists such as ‘GreenBook’ rank the top the research innovators, The Top 50 Most Innovative Research Suppliers of 2017, with System 1 Research (formerly BrainJuicer) topping the list. Innovation is in the DNA of many research firms in order to survive / thrive in an ever changing world.
Much of the success of professional service sectors is the work of peak bodies in maintaining the highest quality, ethics and data privacy standards among members, including organisations such as the Communications Council in Australia, Australian Graphic Design Association, ADMA, CPA Australia, Public Relations Institute of Australia and Association of Market and Social Research Organisations.
In Australia the Association of Market and Social Research Organisations administers the AMSRO Trust Mark, ensuring that the information gathered by members is accurate, ethical and meets privacy regulations.
“Members awarded the Trust Mark must adhere to the following industry criteria … be a registered AMSRO member working under Australia’s first and only registered APP Industry Privacy Code; … be independently audited (annually) for certification to the International Market and Social Research Standard ISO 20252 (or ISO 26362); and … comply with the industry Code of Ethics” (Review more plus list of Trust Mark members here)
Professional services are still alive and growing, with some sectors performing better than others. Based on spend figures in Australia, sectors such as market research have not been replaced with DIY tools. The easy, low cost entry of DIY has likely helped promote the inherent value in being curious and strategic, and allowed experimentation to better understand the pros (e.g. reduced cost and time) and cons (e.g. lack of robust approach and outcomes) of ‘Do It Yourself.’
Thank you for the access to data IBISWorld – www.ibisworld.com.au
Square Holes is pleased to be approaching 14 years into our life as a market research company maintaining the highest standards, a proud member of AMSRO since launching in late 2004 (and endorsed by the Trust Mark) and placing a high priority on innovation, robust traditional research approaches and implementing newer digital and other methodologies.