The communications agency market - France (2024)

1.2 A global market full of promise for years to come

While it's relatively complicated to compile data specific only to communications agencies worldwide, it is possible to identify certain market trends thanks to the size of the global market.

Evolution of communication sector figures World, ****-****, billions of dollars Source: ****

Since ****, the global communications market has shown a historic growth rate of +**.*%, beating the previous growth record set in **** at +**.*%.

This spectacular growth in ****-**** is due in particular to * major factors:

The economic recovery, which is benefiting key sectors such as the automotive, tourism, travel and entertainment industries as they catch up Strong momentum in digital communications; The organization of major international sporting events (***).

The industry expects this historic growth to continue over time, and forecasts double-digit growth until ****.

Advertising agencies

The punctuality agency market suffered greatly during the covid period, declining by an average of *.*% a year in value terms between **** and ****, although there was an increase of *.*% between **** and ****. In ****, the global advertising agency market was worth US$*** billion.

Global advertising agency market size World, ****-****, in billions of US dollars Source: ****

The global advertising agency sector has fared relatively well thanks to the proliferation of digital media, which has broadened agencies' access to their target audiences, despite ...

1.4 A domestic market emerging from a period of turbulence

After a few difficult years for the communications and advertising market, the market has resumed impressive growth and exceeded its **** level, meaning that the French communications market has been catching up since ****. In ****, advertisers' advertising spend reached **.* billion euros, up +*.*% on ****. Despite an economic context marked by weak growth, the market has shown notable resilience.

Let's try to analyze the major trends through the different sub-segments of the market:

The * historical media (***) Digital media Other media

Evolution of communications market size France, ****-****, billions of euros Source: ****

In line with forecasts, the **** level was not only achieved, but surpassed. After modest growth in the first half of the year, the second half was more dynamic, with an average level well above that of ****. Between **** and ****, the media mix shifted, with market share almost stable for the five main media (***) and a drop from **% to **% for other media. This decrease mainly benefited digital, whose market share rose from **% to **%. [***]

It should be noted that to make up for the drop in sales during the ****-**** crisis, the communications market took * years to return to pre-crisis levels, compared with just two years for the COVID-** crisis.

Advertising revenues fell in ****, but have resumed ...

1.5 The health crisis has undermined investment in communications

The Covid-** health crisis has had a rather negative impact on communications spending in France in general, and this has been felt across a number of advertising networks.

Impact of the Covid-** epidemic on television advertising spend France, ****, % (***) Source: ****

All the major television groups have suffered from the consequences of Covid-**, and have seen their revenues decline. While the M* and TF* groups were generally able to stabilize their advertising revenues during the pandemic, it was not so easy for the Canal + and NRJ groups.

Impact of the Covid-** epidemic on radio advertising investment France, ****, % Source: ****

While the underlying trend for radio is not very different from that for television, it is important to note that the Radio France group saw its advertising revenues increase during the Covid-** crisis.

The fact that the public radio group is seeing an increase in advertising revenues at a time when its main private-sector competitors are seeing a drop in revenues is unlikely to extinguish the debate surrounding Radio France's omnipotence in the French audiovisual landscape. According to Anne Fauconnier, General Delegate of the Bureau de la Radio, Radio France would have benefited from a budget of *** million euros for **** to run * stations, while France's ...

2.1 Leading French advertisers

Advertisers are the natural and most instinctive clients of communications agencies. Here are the top ** French advertisers for ****. [***]

In ****, the soft discount chain Lidl, traditionally in the lead for several years, will give way to E.Leclerc, another food retailer. The latter, which occupied second position the previous year, hasincreased its communications budgets by more than **% compared with ****, according to Kantar Media, which analyzes gross media investments. In addition, the Breton retailer stands out for its particularly diversified communications mix, using a variety of media and formats to highlight its difference.

When it comes tocommunication on social networks, Amazon is the leading player. It is followed by Temu, a new Chinese e-tailer established in France in ****. Although Temu does not yet feature in the Top ***, it has distinguished itself with a remarkable entry into the field of online advertising.

From this top **, we can see the advertising spend of the top * as follows:

Advertising spending by the top * advertisers France, ****, millions of euros Source: ****

These * largest French advertisers will spend a total of *.* billion euros on advertising in ****, compared with *.* billion in ****. This bears witness to one thing: advertising expenditure is a major and growing expense item for companies, and only ...

2.2 A sacrificed expense item?

In ****, the economic crisis, a consequence of the health crisis, led to a drop in business investment.

Investment by non-financial companies France, ****-****, % (***) Source: ****

Business investment plummeted in ****. While the graph presented does not only reflect variations in corporate communications spending, it is an interesting indicator to show that in ****, we witnessed a contraction in spending, which may have been postponed, we observe that in **** and **** corporate investment has not yet reached **** levels.

In ****, advertisers' communications investments reached **.* billion euros, marking a *.*% increase on ****. Despite a low-growth economic context, the market has demonstrated great resilience. In line with our forecasts, the **** level was not only reached, but exceeded.

Breakdown of advertisers' communications spend by media France, in ****, in % Source: ****

In ****, after modest growth in the first half, with investments close to those of ****, the second half was more dynamic, with average levels well above those of ****. In addition, the base effect in relation to investments in the second half of **** was favorable.

While investments in the * historical media remained relatively stable in ****, digital investments rose by *.*%, driven by the development of retail media and social media, supported by the growth of video.

Investment in other media grew by *.*%. Direct marketing, notably ...

2.3 Publiphobia: a decline in consumer attention

In recent years, consumers have developed a certain rejection of brand communication and advertising campaigns.

This manifests itself in a decline in consumer attention: weary of advertising hype, consumers no longer assimilate information, and no longer wish to be solicited as much.

Share of Internet users using an ad blocker France, ****-****, % of total Source: ****

More than a third of Internet users use an ad blocker. This phenomenon has been coupled with multitasking (***) making advertisers' messages less impactful for consumers.

Added to this is the growing awareness among consumers of issues such as privacy, who are now increasingly reluctant to receive targeted advertising or even to be targeted, against their will, by advertising campaigns.

Source: ****

In early ****, the Azerion advertising platform published a study on French perceptions of digital advertising, revealing which advertising media are preferred by the French.

The three advertising media to which the French are most receptive are TV (***).

Poll: Which media are you most captive to advertising through? France, in ****, in Source: ****

According to those questioned, television helps with memorization and gives a better image of the product. Poll: Why do you prefer television as an advertising medium? France, in ****, in Source: COMK Social networks also help ...

2.4 Digital communication trends

Digital marketing is becoming an increasingly important part of corporate communications budgets. Cumulative net digital revenues from TV, press, radio and DOOH reach *** million euros, recording growth of *.*% compared to **** and far surpassing **** figures with an increase of **.*%.

Digital media account for **,*** players, **% of whom are exclusive to digital. Paid Social attracts **,*** advertisers, with a strong presence on Meta Group platforms. Digital Audio saw significant growth of **% on a like-for-like basis, with *,*** advertisers.

In communications, the media mix evolves between **** and ****, with a virtually stable market share for the five media (***) and a drop from **% to **% for other media, which mainly benefits digital, whose market share rises from **% to **%.

Here, then, is a summary of digital marketing trends in ****:

Artificial intelligence

In recent years, artificial intelligence (***) has played a key role in digital marketing. The various AI tools make it possible to rapidly analyze large amounts of data to offer personalized campaigns and a tailor-made customer experience. Important trends for **** include the rise of chatbots and conversational marketing. Boosted by AI, these conversational agents dialogue in real time and make tailored suggestions, making the buying process more engaging.

In ****, artificial intelligence will also contribute to creation. Tools such as ChatGPT for ...

2.5 Demand trends and news

Let's take a look at some of the trends and news shaping communications demand.

CSR in decline

Investment in other media grew by *.*%. Direct marketing, in particular direct mail and unaddressed printed matter, declined due to direct competition from digital media. Events continued to grow strongly, reaching **-**% of pre-**** levels by ****. The promotions sector remained very active in supporting consumption in times of inflation.

CSR market share in advertising France, ****-****, in Source: ****

Changing attitudes to fast fashion / second-hand goods

Between economic stakes and ecological awareness, the hearts of consumers are wavering. At a time when government discussions on the taxation of ultra fast fashion brands are in full swing, the subject of advertising is at the center of attention. Fast fashion brands, notably Shein, have seen their advertising pressure multiply by *.*. By contrast, the budgets of second-hand brands, notably leader Vinted, have fallen by **%, with a **% drop for Vinted. While Vinted uses TV and digital media, Shein is the only fast fashion brand to use mainstream media.

AI in advertising

Although the arrival of ChatGPT has left a strong impression, artificial intelligence in advertising is not a new topic. Driven by high-tech brands since ****, this technology increasingly intruded into ...

3.1 The different types of communications agency

There are many different types of communications agency, each fulfilling different missions, but sometimes complementing each other.

Among these different types of agencies, some have more general or more specific skills, depending on the product to be delivered to advertisers and end-customers.

Major integrated players

French groups such as Publicis and Havas, or international ones such as the British WPP or the American Omnicom Group, are "complete" players: that is, they integrate a diversity of brands and agencies, enabling them to meet all customer needs.

The example of Publicis' recent transformation to meet the new challenges of the industry is detailed below. Let us take here the example of the *ᵉ French group, Havas Group, and the main brands that make it up:

BETC Paris: a big name on the Parisian communications agency scene, BETC Paris operates both in media and non-media advertising, in group communications (***), or in digital campaigns. The BETC Digital subsidiary offers expertise in the latter Havas Sports Entertainment: Havas Sports Entertainment does little in the way of media advertising, concentrating mainly on non-media and direct marketing.

Within its network, the Havas group offers the following expertise through its agencies:

Media buying, analytics and attribution: All Responsive Media Brand ...

3.2 An increasingly concentrated market

Here's a look at recent trends in the number of communications and advertising agencies.

Number of advertising agencies in France France, ****-****, in number of establishments Source: ****

Companies registered under activity code **.**Z "Advertising agency activity" are included here.

The number of advertising agencies has been steadily declining since ****, except for ****, which marks a slight increase, marking ever-increasing market concentration. According to INSEE, in **** there will be **,*** communications agencies in France, employing around ***,*** people.

A multitude of new players are emerging, without upsetting the major market balances for the time being. The sector remains dominated by a "big four": Publicis Consultants (***), Havas, Image * and PLEAD. Together, these four players generate annual revenues of around one hundred million euros, in a market estimated at between *** and *** million euros in France. The industry is being driven by a growing number of increasingly international and varied issues: legal, media, financial, economic, political, technological, regulatory and antitrust, in a context of "permacrisis". The public affairs segment, in particular, is expanding rapidly[***]

By ****, small communications agencies accounted for **% of all communications agencies in France, but only **% of the market. Despite this, a few independent companies stand out, such as Australie GAD, which posted sales of ** million ...

3.3 Communications agencies, a symbol of Parisian macrocephaly

Here's a breakdown of the workforce of communications agencies in France:

The Île-de-France region dominates, accounting for **% of the national workforce in ****. However, the COVID-** crisis and the development of telecommuting practices have largely changed practices in this area: in ****, **% of the national workforce was based in Paris, so there is still a Parisian domination, which is tending to diminish with the development of new ways of working.

3.4 Typology of communications agencies by size

As well as being based all over France, communications agencies vary in size and sales profile.

Distribution of number of employees by communications agency France, ****, % Source: ****

In ****, nearly three-quarters of companies registered as communications agencies had fewer than ** employees. The French fabric of this activity is therefore overwhelmingly made up of small structures.

Breakdown of sales by number of employees France, ****, % (***) Source: ****

On the other hand, while companies with fewer than ** employees are the most numerous, they are not the most dynamic in terms of sales. In this field, it is the largest structures that monopolize the lion's share of the market: companies with over ** employees account for almost two-thirds of national sales.

Link between number of employees and sales

There is a definite decorrelation between the distribution of companies by number of employees and sales. The largest structures are few in number, but they are the ones with the highest sales: the *% of companies with the most employees account for **.*% of sales.

3.5 Strategic challenges for the value chain

The value chain of the communication and advertising market will most certainly be governed in the years to come by :

Advertisers' spending on media communications

As we saw in *.*, the sales of communications agencies depend to a large extent on the dynamism of economic activity in the broadest sense. If the economy is doing well (***), the sector's volume and sales are expected to follow the upward trend.

Advertisers' spending on non-media communications

This category is much less dependent on the economic climate, at least on the surface. It mainly concerns advertisers' spending on non-media projects (***).

Increased competition from new entrants

This ever-increasing competition for communications agencies can be seen mainly in everything to do with digital campaigns. For some years now, GAFAM and other mailing services have been swallowing up the traditional business of communications agencies. The latter will have to adapt and try to preserve their market share. The major underlying challenge is that of data: giants such as Google and Amazon, for example, appear to be better equipped than communications agencies to respond to advertisers' requests.

The challenge of internationalizing agencies

The French market for communications agencies has reached maturity, and the challenge now is to continue to find ...

4.1 From general agencies to the most specialized

While generalist agencies generally define themselves as being able to support their customers in their advertising and marketing activities, from conception to completion, others focus on much more restricted areas of expertise. This is the case of specialized agencies.

Among our areas of expertise, we can find agencies specializing in :

Editorial communications Healthcare communications Corporate communications Design Digital Advertising Marketing Sports marketing Promotional items: i.e. the sourcing and supply of these items Events Public relations Human resources

This non-exhaustive list illustrates the wide range of skills available to communications agencies, which are capable of dealing with many different issues.

In recent years, major groups have increasingly turned to two agencies: one for communications strategy and another for press relations. The number of agencies can rapidly increase in sensitive or crisis situations, resulting in increased activity in the sector. During intense conflicts, such as the one between Suez and Veolia, companies may call on several agencies simultaneously, sometimes as many as four or five. This practice is designed to ensure that certain agencies don't end up on the other side of the conflict, thereby risking damage to the company.

Crisis interventions are billed at high rates, with fees ranging from €**,*** to ...

4.2 An offering that adapts to the new digital reality

The growing importance of digital and new types of media in corporate communications and advertising strategies has had a number of consequences for the advertising agency market.

Competition has changed:

A new type of competition has emerged, driven by consulting firms, which now offer products and services that are similar in some respects to those of communications and advertising agencies. What sets them apart is a new way of looking at advertising, with a highly quantified approach focused on profitability and KPIs (***) such as ROI or break-even points. It's a competition based on figures and rational measurements that threatens the more traditional advertising agencies, which emphasize creativity, consumer insight or the "buzz" generated without being able to quantify them in such a precise and rational way.

It's important to note, however, that there are still few players capable of performing well in all segments of the new approach to advertising.from the profitability study to the originality and creativity of an advertising campaign.

A new organization:

As a consequence of the new objectives set for communications agencies, they must now modify their organization to meet these new challenges.

Take, for example, the recent transformation of the Publicis Group, the world's third-largest ...

4.3 The need to integrate new skills

It seems necessary for communications agencies to extend their areas of expertise, and to develop in-house activities that until now they have been accustomed to outsourcing. This new form of work organization enables them to do two things:

Win as many assignments as possible from advertisers; To meet advertisers' demand for greater transparency and collaboration with as few intermediaries as possible.

It is now crucial for communications agencies to develop cross-functional skills. The boundaries between agency departments are increasingly porous.

In line with the example we developed with the Publicis group, communications agencies are creating subsidiaries specialized in particular industries (***) capable of providing support from conception to completion. This integration strategy limits competitive pressure and the risk of substitution, i.e. the risk of advertisers turning to other partners to carry out their campaigns or provide services.

4.4 Price trends

Here is the evolution of design prices for services provided by communications agencies since ****:

Trend in design prices for advertising services France, ****-****, base *** in **** Source: ****

With the exception of ****, prices were down overall (***). In ****, prices fell to adapt to the relative reluctance of advertisers to spend on advertising campaigns during the crisis. Campaigns were more digital, which also meant lower design costs.

This price cut was designed to protect the commercial interests of advertising agencies, maintain pre-crisis business volumes and sign new contracts. After the COVID-** crisis, prices rose to compensate for the crisis period.

4.5 Numerous means of communication

Communication agencies operate in a wide range of media, with each agency, or each department of a large communication agency, specializing in a particular medium.

First of all, there are the * historical media:

Television Cinema Radio Print media Outdoor advertising

These * media offer a wide variety of communication possibilities for brands that are clients of communications agencies.

Then there are all the different sub-media linked to the Internet:

Internet Search: website referencing and links to advertisers' sites Internet Social: Promoting brands on social networks Internet Display: All types of display advertising on publisher sites Other: Affiliation, mailing campaigns, etc.

Finally, communications agencies can also offer communication campaigns on more minor media, but which may be relevant for small businesses or companies seeking to communicate locally. These include directories, postal advertising and leafleting campaigns.

The latest BUMP (***) according to the media used.

Breakdown of advertising budgets by media France, ****, in percent BUMP

We can see that the Internet has completely turned communication methods on their head, and this medium is now central to brand communication. However, communication campaigns using directories, flyers and postal distribution are becoming less and less popular, losing market share every year (***).

Mastery of a large number of communication ...

5.1 Advertising regulation and self-discipline

Advertising is protected by copyright, trademark law and unfair competition.

VisitBook Iof the French Intellectual Property Code concerns copyright.

The mere fact of creation gives rise to intellectual property rights over a work: "The author of a work of the mind enjoys an exclusive intangible property right in this work, enforceable against all, by the sole fact of its creation. [***] The work is deemed created, independently of any public disclosure, by the sole fact of the realization, even unfinished, of the author's conception".

To be protected by copyright, a creation must be shaped and concretized, and not remain at the status of a mere idea.this is because, in law, the idea of a creation is not protected, whereas its form is.

Advertising communications are often the result of a collaboration between the advertiser and the agency, and this raises the question of the intellectual property of this creation.either the advertiser owns the intellectual property of the work, in which case the advertiser must pay additional remuneration in order to exploit the advertising product.or the advertiser owns the intellectual property, in which case he can use it as he sees fit, without having to pay any additional remuneration to ...

6.1 Segmentation

Here's a list of the main players on the French market.

6.2 Analyse financière des entreprises du secteur

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• Publicis Groupe
• Havas Groupe (Groupe Vivendi)
• WPP
• Omnicom Media group France
• Kwanko
• MGA France
• Edelman
• Meero
• Spaag
• Altavia Group
• dentsu France
• Mnstr
• Eskimoz
• Key Performance