London's Advertising Industry
London is a global centre for economic activity, known for its thriving financial and business sectors. However, the undeniable strength of certain industries is also complemented by the unstoppable rise of other economic sub-sectors. Among them we can highlight the advertising industry, which according to a report published by the Institute of Practitioners in Advertising (IPA), now accounts for 8.7 per cent of all enterprises in the country. The same report also highlights how despite Britain's relatively small population, the country is the world's fifth largest advertising market.
Being the country's capital and one of the world's foremost economic powerhouses, it is not surprising to find that a large percentage of the UK's advertising firms have chosen to be based in London. The most recent figures released by the IPA suggest that approximately 80 per cent of the total income generated by the UK's advertising market comes from firms based in the British capital. Two of the world's top ten global advertising agencies are headquartered in London, and the city is currently listed as one of the world's top three advertising and media hubs, together with New York and Los Angeles.
Of course, London's success establishing itself as a leading advertising hub has not happened in a vacuum. The city's advertising sector has had to demonstrate its ability to adapt to the changes brought about by the shift from traditional to digital media. Likewise, London's success history in the global advertising market would not have been possible without the city's focus on attracting the right talent pool. Last but not least, the local advertising sector has benefited from a series of governmental initiatives whose objective was helping diversify the capital's economic base. We invite you to take a closer look at how these factors have come together to position London as one of the world's most successful advertising markets.
London's advertising industry: a successful history of adaptation
Over the past twenty-five years, the global advertising industry has been profoundly transformed, mainly due to the widespread adoption of technologies like mobile media, targeted advertising, and social media platforms. The appearance of new technologies has transformed the needs of consumers beyond recognition, and as a result, markets and companies that have failed to keep abreast of the latest developments have simply failed.
Much has changed in the advertising world since the days when two prime time TV adverts were sufficient to reach 80 per cent of the market. Nowadays, reaching such percentage of the population is simply impossible by using a single channel, as audience fragmentation is a deeply set trend in consumer's viewing habits. Consumers are increasingly turning to alternative media outlets, turning away from radio or television and favouring mobile devices like smartphones or tablets instead. Blogging and the appearance of large social media platforms like Youtube, Twitter, and Facebook have also forced advertising professionals to rethink their strategies. More than ever before, advertising has become a matter of targeting the right audiences and delivering highly personalised and efficient messages.
It is evident that the London advertising industry has responded well to these changes, turning challenges into opportunities for growth. As a result, the market has been expanding since 2007, with the digital advertising sector experiencing three-digit growth rates that clearly compensate for the decline in revenues generated by printed or conventional advertising. Market analysts forecast that by 2016, digital advertising will account for more than half of the UK's advertising industry.
People, talent, and technology: the right equation for success
London-based advertising agencies have successfully invested in human capital. According to statistics published by the Department of Trade and Industry, the UK's advertising industry employs nearly 100,000 people. Approximately 20 per cent of those are self-employed. The vast majority of advertising professionals (80 per cent of the total) are based in London, and a staggering 63 per cent of employees are female. By selecting the right talent pool, the London advertising industry has been able to meet the demands of a changing market that requires highly specialised skill sets.
London's success as a global advertising hub is also related with the industry's ability to implement close collaboration between increasingly interconnected sectors, such as design, software development, publishing, and data management. The local advertising industry has also made the most of governmental initiatives such as Tech City, a highly successful hub for media and technology firms that has been responsible for the capital's digital success. Without this kind of joint approach, it would have been impossible for the London advertising sector to thrive. By bringing together adaptability, people, talent, and technology, the London advertising industry has found its way to long-lasting success.