Advertising agencies monitor: second quarter 2007

Turnover of advertising agencies was slightly lower in the second quarter of 2007, compared with a year earlier. The sentiment among these agencies is careful. Their opinions are slightly more negative and their expectations for the next quarter are more pessimistic.

Turnover down

Advertising agencies’ total turnover was half percent lower in the second quarter of 2007 than in the corresponding period last year. This decrease is alittle lower than in the first quarter. In the first six months of this year the decrease of turnover was more than 1 percent. The advertising branch is the only branch in business services without an increase in turnover in the first half year of 2007. In 2005 turnover increased by more than 4 percent, making the advertising branch one of the fastest growing branches in business services at the time. The turn ocurred in 2006. That year turnover, on balance, did not increase further. No recovery has turned out yet in 2007.

Year-on-year turnover change

Equal level in orders, negative opinions

Results from the Business Sentiment Survey of July 2007 show that the sentiment among advertising agencies are up and down. They say they received the same amount of orders in the second quarter of 2007 than in the first quarter of 2007, and their opinions on these orders received was a little more negative. Selling prices remained almost equal, while the number of staff has decreased. Their opinions on the current economic climate has further deteriorated and are evaluated, on balance, normal.

Opinions on orders received and economic climate

Pessimistic expectations

Compared with the corresponding period last year, the agencies are more pessimistic in their expectations for the third quarter of 2007. On balance, agencies expecting a decrease in orders received and in turnover are at the majority. Furthermore agencies anticipate increasing selling prices. The expectation concerning the future number of staff has deteriorated as well: on balance 11 percent of the companies expects a decrease. The expectations of the advertising branche are distictly more pessimistic than the expectations in business services as a whole.

Expectations for the third quarter of 2007