Marketing Consultants in the US

WWW.IBISWORLD.COM Marketing Consultants in the US August 2019 1

IBISWorld Industry Report OD5848Marketing Consultants in the USAugust 2019 Anthony Gambardella

Well-consulted: Strong growth in advertising expenditure will boost the industry

2 About this Industry2 Industry Definition

2 Main Activities

2 Similar Industries

2 Additional Resources

3 Industry at a Glance

4 Industry Performance4 Executive Summary

4 Key External Drivers

6 Current Performance

8 Industry Outlook

10 Industry Life Cycle

12 Products and Markets12 Supply Chain

12 Products and Services

14 Demand Determinants

14 Major Markets

16 International Trade

17 Business Locations

19 Competitive Landscape19 Market Share Concentration

19 Key Success Factors

19 Cost Structure Benchmarks

21 Basis of Competition

22 Barriers to Entry

23 Industry Globalization

24 Major Companies24 Accenture PLC

24 WPP PLC

25 Publicis Groupe

26 Operating Conditions26 Capital Intensity

27 Technology and Systems

27 Revenue Volatility

28 Regulation and Policy

28 Industry Assistance

29 Key Statistics29 Industry Data

29 Annual Change

29 Key Ratios

30 Jargon & Glossary

www.ibisworld.com | 1-800-330-3772 | [email protected]

This report was provided toSeattle Pacific University (2134504200)by IBISWorld on 16 December 2019 in accordance with their license agreement with IBISWorld


Firms in the Marketing Consultants industry provide operating advice and assistance to businesses and other organizations on marketing issues, such as developing marketing

objectives and policies, sales forecasting, new product development and pricing, licensing and franchising planning and marketing planning and strategies.

The primary activities of this industry are

Customer services management consulting services

Marketing research and public opinion polling services

Marketing strategy and market development consulting services

Sales management consulting services

54161 Management Consulting in the USManagement consultants advise businesses, nonprofits and public-sector agencies in different areas including organization design, human resources, corporate strategy, marketing and sales.

54181 Advertising Agencies in the USAdvertising agencies create advertising campaigns and place the advertisements in periodicals, newspapers, radio, TV and other media.

54182 Public Relations Firms in the USPublic relations (PR) agencies manage the communications between an organization and the public to promote favorable relationships and portray a desirable image.

54191 Market Research in the USCompanies in this industry systematically gather, record, tabulate and present marketing and public opinion data.

Industry Definition

Main Activities

Similar Industries

Additional Resources

About this Industry

For additional information on this industry

www.consultant-news.com Consultant-News.com

www.consultingmag.com Consulting Magazine

www.census.gov US Census Bureau

The major products and services in this industry are

Marketing strategy and market development consulting services

Sales management and development consulting services

Strategic management consulting services

Other marketing management consulting and implementation services

Other

Provided to: Seattle Pacific University (2134504200) | 16 December 2019


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SOURCE: WWW.IBISWORLD.COM

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Revenue vs. employment growth

Products and services segmentation (2019)

60.8%Marketing strategy and

market developmentconsulting services

19.9%Other marketing

management consulting andimplementation services

12.4%Sales management and

development consulting services

4.1%Other

2.8%Strategic management

consulting services

Key Statistics Snapshot

Industry at a GlanceMarketing Consultants in 2019

Industry Structure Life Cycle Stage Growth

Revenue Volatility Low

Capital Intensity Low

Industry Assistance None

Concentration Level Low

Regulation Level None

Technology Change Low

Barriers to Entry Low

Industry Globalization Low

Competition Level High

Revenue

$55.3bnProfit

$4.9bnWages

$18.2bnBusinesses

218,049

Annual Growth 19–24

1.6%Annual Growth 14–19

4.4%

Key External DriversCorporate profitTotal advertising expenditureNumber of businessesAggregate private investmentBusiness sentiment indexNumber of broadband connections

Market ShareThere are no major players in this industry

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FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 29




Key External Drivers Corporate profitCorporate profit measures profit earned across the entire US economy. A rise in corporate profit generally increases the number of businesses that are able to afford consulting services. Therefore, an increase in corporate profit precipitates an increase in industry revenue. Corporate profit is expected to increase in 2019.

Total advertising expenditureTrends in total mainstream media advertising, particularly in radio, TV, newspapers and magazines, have a direct effect on this industry. As companies increase their investment in advertising, they are more likely to increase their use of marketing consultants to devise the most effective targeting and messaging strategies for their outreach campaigns.

Executive Summary The Marketing Consultants industry provides operating advice and assistance to clients on various marketing issues, including campaign strategy and planning, pricing and sales forecasting, among others. Over the five years to 2019, the industry has benefited from rising corporate profitability and increasing advertising expenditure, which have resulted in higher demand for advisory services. With an improving economy, clients are spending more on advertising, especially through new digital channels. As a result, many companies have sought the expertise of

marketing consultants to help them navigate the world of online advertising and sales. Strong demand has translated into steady industry revenue growth at an annualized rate of 4.4% to $55.3 billion over the five years to 2019. This includes growth of 3.5% in 2019 alone, aided by increased demand from corporate profit growth. Industry profit, defined as earnings before interest and taxes, has only increased slightly over the past five years

The landscape for firms competing in the Marketing Consultants industry has changed over the past five years. In

particular, a significant number of small boutique consultancies have entered the industry, competing with larger firms by offering services at a lower cost and providing specialized advice tailored to specific areas of marketing, such as digital advertising or social media. Employment growth has largely been driven by this expansion of niche consultancies. Furthermore, industry participation has also increased in recent years as a result of nonemployers, which have been able to provide their services to companies digitally, entering the industry to provide specialized consulting services

Revenue is expected to grow more consistently as the industry matures over the five years to 2024. This will be reflected in almost all aspects of the industry, including the number of enterprises, which is expected to continue to grow, albeit at a slower pace than during the previous period. While larger firms begin to merge through acquisitions of more-specialized consultancies, niche firms will continue to thrive and grow. In particular, various sector-specific firms, focused on issues such as healthcare, will thrive. Overall, the industry will continue to benefit from a greater need for assistance in marketing through digital channels. IBISWorld estimates industry revenue will increase an annualized 1.6% to $60.0 billion over the five years to 2024.

Industry PerformanceExecutive Summary | Key External Drivers | Current Performance Industry Outlook | Life Cycle Stage

A significant number of small boutique consultancies have entered the industry, competing with larger firms



Industry Performance

Key External Driverscontinued

Total advertising expenditure is expected to rise in 2019, representing a potential opportunity for the industry.

Number of businessesGeneral growth in the number of businesses directly affects aggregate demand for marketing consulting. An increase in the number of US businesses expands the potential pool of clientele for marketing consultants and increases demand for industry services, such as administrative, organizational and strategy consulting. The number of businesses is expected to increase in 2019.

Aggregate private investmentAggregate private investment includes spending by individuals and businesses on physical structures, equipment and software. As firms increase their investment in marketing tools, software and other equipment, they are more likely to increase their use of marketing consultants to maximize utility gained from additional capital. Additionally, firms will use consultants to understand what aspects of their marketing and sales efforts are most effective and where investment should be focused, boosting industry revenue.

Aggregate private investment is expected to increase in 2019.

Business sentiment indexThe business sentiment index acts as a gauge for the overall level of confidence businesses across the economy have in macroeconomic conditions. As the index increases, businesses’ outlook on the economy is seen as improving, which leads them to invest in marketing consultants. In 2019, the business sentiment index is expected to slightly decrease, posing a threat to the industry.

Number of broadband connectionsThe number of broadband connections in the United States represents the total number of internet connection points with speed of over 200.0 kilobits per second in at least one direction. The popularity of the internet as a new channel for commerce has required many companies to begin targeting customers and clients using online-based technologies. As the number of broadband connections rises, so will the need for marketing consulting services specifically tailored to address the challenges of engaging with customers and selling them products and services online. The number of broadband connections is expected to rise in 2019.

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Current Performance

Operators in the Marketing Consultants industry provide advisory services to businesses, the public sector and other organizations on marketing issues, such as developing marketing objectives and policies, sales forecasting, new product developing and pricing, licensing and franchising planning and marketing planning and strategies. As companies make new investments in marketing and sales strategies, marketing consultants will be increasingly called in to provide guidance for clients on how to most-efficiently direct their outlays. The industry is reliant on high corporate profit, which typically enables companies to expand their operations. While some consultants specialize in helping companies reduce costs and restructure, marketing consultants are primarily focused on providing marketing strategies for growth.

A combination of growth within key drivers relevant to the Marketing Consultants industry has helped propel industry growth over the five years to 2019. Macroeconomic conditions became favorable enough for new companies to emerge across the US economy during the five-year period, increasing the potential pool of clientele available to marketing consultants. At the same time, rapidly rising corporate profit provided

companies with more money to invest in business growth, much of which depends on developing sales and marketing strategies. High corporate earnings also enabled companies to expand their advertising expenditures, especially on digital platforms, which became increasingly important during the period. These factors have driven demand for marketing firms, helping industry revenue increase an annualized 4.4% to $55.3 billion over the five years to 2019. This includes growth of 3.5% in 2019 alone, as increasing corporate profitability will lead to increased demand for industry operators’ services.

Business booms The Marketing Consultants industry grew steadily over the past five years, bolstered by sustained economic growth. According to the Bureau of Economic Analysis and IBISWorld estimates, corporate profit increased an annualized 2.5% over the five years to 2019. With plenty of cash to spare, many companies decided to expand their operations. Aggregate private investment has increased at an annualized rate of 3.5% over the five years to 2019, as historically low interest rates led companies to renew investment commitments. Demand for specialized

consultants focused on providing business intelligence, and sales strategies skyrocketed. This shift toward more business planning boded well for industry operators that focus heavily on providing forward-looking marketing and sales strategies for their clients.

As macroeconomic conditions improved during the period, companies also increased their advertising expenditures. Falling unemployment and rising per capita discretionary spending helped convince consumers to make purchases. As markets expanded, so did

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companies’ willingness to pay for information and advice on how to target and tap into burgeoning consumer groups. Total advertising expenditure rose at an annualized rate of 1.9% over the five years to 2019 as companies sought to target new markets,

particularly via digital and social media. Industry operators benefited from this increase by providing clients with a variety of sales forecasting, new product development and pricing, licensing, franchising and branding strategies to coincide with their advertising campaigns.

Business booms continued

The future is digital One of the most prominent drivers of industry growth over the past five years has been the increased adoption of digital devices and media. According to Deloitte, a leading consultant firm in the United States, US adults spend more time every day with digital media than they do watching conventional TV. Moreover, the number of mobile internet connections has increased at an annualized rate of 10.3% over the five years to 2019. This explosion of digital media has presented numerous opportunities and challenges for companies looking to capitalize on consumers’ growing interconnectivity. In particular, it has led to strong growth in commercial spending on digital marketing, the set of systems and processes through which businesses interact with their customers over digital channels, such as mobile and internet devices.

Overall, the rapid rise in broadband connections, which increased at an annualized rate of 6.2% over the five years to 2019, has convinced many

companies to turn to consultants for their expertise in online marketing. As companies shift their advertising budgets toward digital marketing, more and more have come to rely on industry firms to provide advice on how to reach customers in new ways online. This includes designing infrastructure, revamping old operations and shaping general marketing strategies to conform to the new landscape of digital sales. Growing demand for digital marketing technologies has increased demand for marketing consultant firms that specialize in or have specialized divisions dedicated to driving sales through these new mediums.

The rapid rise in broadband connections has convinced many companies to turn to consultants

Boutiques on the rise The Marketing Consultants industry is highly fragmented, with a large proportion of small nonemployer firms. Over the past five years, the industry has remained highly fragmented, and no significant change in the market concentration has occurred. Nevertheless, larger firms have continued to acquire smaller firms in particular areas of growth, including marketing consulting. Major

acquisitions have also occurred, such as the purchase of Booz & Company by PricewaterhouseCoopers in 2014. Nevertheless, the industry is still dominated by small operators due to its relatively low barriers to entry. Over the five years to 2019, the number of small operators has increased alongside industry growth. These consultants focus on providing niche advice in specific areas of marketing and are able




to remain competitive by offering their services at a fraction of the price of larger operators. As a result, the number of industry enterprises has increased at an annualized rate of 5.0% to 218,049. The rise of niche consulting boutiques has also stimulated industry employment growth, which increased at an annualized

rate of 4.7% to 412,039 workers over the five years to 2019. However, new entrants to the market have led to increased cost-based competition among operators. As a result of increased price-based competition, industry profit only increased from 8.7% of industry revenue in 2014 to 8.9% in 2019.

Boutiques on the rise continued

Industry Outlook

The Marketing Consultants industry is expected to grow over the five years to 2024 alongside steadily increasing corporate profit and rising aggregate investment. As companies make new investments, marketing consultants will be called in to advise firms on how to integrate current marketing policies with strategies for expansion, particularly across new digital mediums. Nevertheless, stabilizing macroeconomic factors will keep the industry from maintaining the high growth it achieved during the previous period. Furthermore, more

companies will begin turning to in-house specialists, which may prove to be less expensive than hiring traditional consulting firms. Specialized boutique firms will continue to thrive in this environment by offering clients the same advice as larger, more established consultants, but at a reduced cost. Still, growth in new industry entrants will be less than the previous period as growing demand for marketing consultant services slows. Over the five years to 2024, industry revenue is expected to rise at an annualized rate of 1.6% to $60.0 billion.

Demand steadies Demand for marketing consults is expected to continue to increase over the next five years, driven by rising corporate profit and aggregate investment. Companies are expected to continue to expand and invest as discretionary spending gradually improves. Nevertheless, the boom in corporate profit and investment experienced during the previous period is unlikely to continue over the next five years as the economy resumes more regular, historical growth. Corporate profit, which grew at an annualized rate of 2.5% over the past five years, is

forecast to slow to an annualized growth rate of 1.4% over the five years to 2024. Nevertheless, these aspects will be robust enough to help drive demand for marketing consulting services as companies seek out new ways to invest corporate profit into new, lucrative marketing schemes.

Companies are expected to continue to expand and invest as discretionary spending improves




Digitization drives growth

The rate of technological change will continue to outpace the ability of companies to evolve to new media landscapes over the next five years. Customers will engage with companies and purchase products and services using an ever-expanding number of new devices. As a result, companies will continue to search for new ways to reach customers through digital channels. Marketing consultants will be called upon to provide technical advice and strategies for rolling out new products and services and targeting new audiences through online advertising. As a result of this, marketing expenditures are expected to continue to grow at a steady pace during the period, despite declining demand from the

traditional media formats, such as network TV and print newspapers. IBISWorld expects total advertising expenditure to increase at an annualized rate of 2.0% over the five years to 2024. Marketing consultants will increasingly hone their skills and expertise to focus on the digitizing media marketplace, where companies are guaranteed to spend a growing share of their advertising revenue.

The rate of technological change will continue to outpace the ability of companies to evolve

Consultants are typically considered a necessary yet extremely expensive cost of doing business for companies. Nevertheless, their staying power over the next five years will begin to be challenged by companies’ use of in-house specialists. Rather than outsourcing help to develop new marketing strategies or branding schemes, companies will begin to hire their own specialists to provide expertise. In-house specialists can sometimes be hired and maintained for a lower price than it would cost to pay for a consulting firm’s services. Profitability is expected to remain steady but, due to this shift in competition, decrease marginally

over the next five years. IBISWorld estimates profit will fall from 8.9% of revenue in 2019 to 8.7% in 2024.

Another result of rising external competition from in-house consultants will be a slightly slower increase in the number of new industry entrants. Industry enterprises are expected to grow at an annualized rate of 3.2% to 254,800 over the five years to 2024. Digitization and the expanding use of technology will require marketing consultants to become increasingly technical. Rising expertise will demand higher wages, which are expected to rise at an annualized rate of 2.3% $20.4 billion over the five years to 2024.

Rising in-house competition



Industry PerformanceThe industry is growing at a faster rate than the overall economy

Increased consolidation, through merger and acquisition activity, is occurring among the industry’s larger players

There is widespread acceptance and adoption of the services being offered

Life Cycle Stage




Industry Life Cycle The Marketing Consultants industry is in the growth stage of its life cycle. Over the 10 years to 2024, industry value added (IVA), which measures an industry’s contribution to the overall economy, is projected to increase at an annualized rate of 3.7%, compared with an annualized US GDP growth of 2.0% during the same period. Fast growth over the past five years is in part due to the industry’s strong growth in line with improving macroeconomic conditions, but also due to the growing importance of new digital channels for marketing. Nevertheless, as growth slows during the outlook period, the industry will begin to enter its mature phase.

The value of marketing consultants is well-accepted within the business community, particularly in the realms of corporate strategy and organizational design. Accordingly, the industry has achieved a high degree of market saturation, with third-party marketing consulting widely considered to be a vital source of impartial analysis.

This industry is also undergoing high merger and acquisition (M&A) activity. The M&A activity that occurred over the past five years is likely to continue over the next as large consultants attempt to purchase niche firms to gain specialization in certain areas of marketing.

This industry is Growing



Products and Services Marketing strategy and market development consulting servicesThe primary services provided by marketing consultants include advice and guidance related to marketing strategy and related issues. This includes planning and organization, competitive analysis, customer analysis, marketing audits and market evaluation. In 2019, marketing strategy and market development consulting services are estimated to account for 60.8% of revenue. Consultants identify external opportunities and challenges for businesses and government organizations that can be addressed through marketing strategies. Additionally, consultants are able to analyze internal strengths and weaknesses and determine which types of

goods and services can be offered to different demographics.

Over the past five years, this segment has grown as a proportion of revenue as more firms use marketing consultants to analyze their competitive position in the market and how they can increase sales in a recovering market. Increasing consumer spending is providing an opportunity for savvy businesses to increase their market share and consultants are able to help maximize brand recognition and sales through advisory services.

Sales management and development consulting servicesSales management and development consulting services are estimated to

Products & MarketsSupply Chain | Products and Services | Demand Determinants Major Markets | International Trade | Business Locations

KEY BUYING INDUSTRIES

22 Utilities in the US Utility companies use marketing consultants to helps set sales strategies and develop new business.

31-33 Manufacturing in the US Manufacturing firms use consultants to help understand consumer trends and understand their competitive position.

52 Finance and Insurance in the US Finance and insurance firms use consultants to gain insight into their market and how to gain new sales.

62 Healthcare and Social Assistance in the US Healthcare and social assistance companies use consultants to better understand demographics and their needs.

92 Public Administration in the US Government bodies use marketing consultants to help roll out campaigns and public announcements.

KEY SELLING INDUSTRIES

44312 Computer Stores in the US Computer stores supply computers and laptops for consultants.

45321 Office Supply Stores in the US Consulting firms purchase office equipment and stationery from office supply stores.

53112 Commercial Leasing in the US Commercial leasing firms provide office space for consultants.

54151 IT Consulting in the US Marketing consultants enlist the help of IT professionals to help with digital marketing.

54191 Market Research in the US Consultants use market research to understand demographics and target markets.

Supply Chain



Products & Markets

Products and Servicescontinued

account for 12.4% of revenue in 2019. Sales management and development consulting services include advice pertaining to sales management, such as strategy planning and organization, sales forecasting, sales compensation and sales training. These services are sometimes offered on their own; however, they are typically bundled together so that analysis can be provided on current systems before developing new strategies. Over the past five years, sales management and development consulting services have remained a constant proportion of revenue, as they have grown in line with Marketing Consultants industry revenue growth during the period.

Other marketing consulting servicesOther marketing consulting services include strategic management consulting and custom computer application design services. These services are estimated to account for 2.8% and 0.1% of industry revenue in 2019, respectively, and have declined as a proportion of revenue over the past five years. Marketing consulting firms have experienced stronger

conditions from management and information technology consulting companies that provide more tailored solutions and are experts in the area. Additionally, marketing consultants provide public relations services, corporate development consulting services, operations and supply chain marketing management and other services.

Other work done by firms includes market research and polling. Market research and public opinion polling services includes gathering, analyzing and interpreting information about consumers, market niches and the effectiveness of marketing programs. Programs are tested for goods and services and about public opinion on various issues. This includes the collection and analysis of primary data or the analysis of existing secondary data. Firms use media research services and statistical sampling and survey design services to test target demographics and understand consumer conditions. Over the past five years, demand for market research and public opinion polling has risen slightly due to increasing demand for data-driven decisions.

Products and services segmentation (2019)

Total $55.3bn

60.8%Marketing strategy and

market developmentconsulting services

19.9%Other marketing

management consulting andimplementation services

12.4%Sales managementand developmentconsulting services

4.1%Other

2.8%Strategic management

consulting services




Products & Markets

Major Markets

Marketing consultants predominantly provide advisory services to private clients. In 2019, Marketing Consultants industry

operators are expected to generate 90.2% of revenue from private businesses; however, individuals, government bodies

Demand Determinants

Demand for the Marketing Consultants industry’s services is closely linked to the availability of budgetary resources and other discretionary expenditure by business, public sector and nonprofit clients. Therefore, business confidence, corporate profit and government investment are important factors that strongly affect the growth of this industry.

The prevailing level of demand for marketing consultants is linked to the economic cycle. Typically, stronger business conditions, including high corporate profit and strong business sentiment, fuel demand for consulting services as firms have larger budgets to invest in advisory services. Similarly, demand from government agencies expands when employment levels are high, as government bodies have a larger tax base to draw from. However, the industry also displays some countercyclical demand. When company sales are low and businesses are struggling to compete in the market,

firms are likely to bring in consultants to gain a better understanding of why products and services are not being received well by consumers. Additionally, consultants can analyze a company’s competitive position in the market and help develop new sales strategies and target markets for businesses. Consultants are also able to provide assistance during economic downturns by helping companies focus on higher profit and reducing expenditure in less-lucrative areas.

Demand for consulting services is also dependent on the perceived value of advisory services. Consulting services are typically expensive and, therefore, businesses need to be sure that investment in consulting services will translate into greater brand recognition and higher sales. Consequently, consultants are required to build a reputation for assisting firms and showing results in how businesses can expand sales through the use of marketing consultants.

Major market segmentation (2019)

Total $55.3bn

33.4%Other private sectors

3.8%Individuals

18.0%Retail and wholesale

3.7%Nonprofit organizations

2.4 %Federal and stae

government

15.3%Financial

11.7%Manufacturing

11.7%Technology and communications




Products & Markets

Major Marketscontinued

and nonprofits also require consultants to help understand markets and how to sell to certain demographics.

Retail and wholesaleThe retail and wholesale sectors are projected to comprise 18.0% of industry revenue in 2019. Retail and wholesale companies are reliant on advertising to generate new sales and, therefore, use marketing consultants heavily to create business. Knowledge of what consumer trends are most popular and how consumers are purchasing goods are also key to these industries. Consultants can provide consistently up-to-date market research and advice on retail and wholesale competition and how to increase profitability through new sales. Over the past five years, the retail and wholesale sector has performed in line with the overall industry and, thus, has remained a constant proportion of revenue.

FinancialThe financial sector represents is estimated to account for 15.3% of revenue in 2019. Financial service companies continually analyze their position in the market and work on advertising and marketing campaigns to win new business. Additionally, these companies are aggressive in sales to consumers and other businesses that use banks to process investments. Over the past five years, the financial sector has grown as a proportion of revenue. In recent years, financial markets have consistently grown as a result of rising consumer and business confidence is encouraging new investment, which financial institutions are looking to take advantage of.

Other private sectorsOther private sectors include the manufacturing and technology and

communications sectors, which both are estimated to account for 11.7% of industry revenue in 2019, respectively. Additionally, other significant private sectors include energy and resources and healthcare and life sciences. Manufacturing revenue has declined over the past five years due to increased offshoring; however, technology and communications, in addition to healthcare sectors, have represented growing sources of revenue for marketing consultants over the past five years.

IndividualsMarketing consultants are also hired to assist individuals and sole proprietors. Individuals typically pursue advice related to planning and organization and how to enter a competitive market before opening a business. Additionally, consultants can provide advice on how to begin sales and marketing strategies. Individuals have declined as a proportion of revenue over the past five years as larger businesses grow at a relatively faster rate. Overall, individuals are expected to account for 3.8% of industry revenue in 2019.

Government and nonprofitsGovernment and nonprofit organizations represent only 6.1% of industry revenue in 2019, collectively. Federal and state governments, as well as nonprofit organizations, use consultants to roll out new campaigns and consumer awareness programs. Federal and state governments have fallen as a proportion of revenue over the past five years due to reduced government spending. Nonprofit organizations have grown marginally over the five years to 2019 due to rising corporate profit, which has increased donations to charitable causes.



Products & Markets

International Trade The Marketing Consultants industry involves no international trade due to its service-based nature. Services are offered domestically, and although

international companies may demand marketing advisory services, this work is typically done abroad through local providers.



Products & Markets

Business Locations 2019

MO1.3

West

West

West

Rocky Mountains Plains

Southwest

Southeast

New England

VT0.2

MA2.1

RI0.3

NJ3.1

DE0.3

NH0.3

CT1.1

MD1.4

DC0.4

1

5

3

7

2

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8 9

Additional States (as marked on map)

AZ2.5

CA16.8

NV1.6

OR1.4

WA2.7

MT0.3

NE0.5

MN2.1

IA0.5

OH2.1 VA

2.3

FL11.7

KS0.7

CO3.4

UT2.0

ID0.5

TX5.8

OK0.6

NC2.9

AK0.1

WY0.3

TN1.0

KY0.6

GA3.8

IL4.8

ME0.3

ND0.1

WI1.1 MI

1.9 PA2.5

WV0.1

SD0.2

NM0.2

AR0.5

MS0.2

AL0.5

SC0.8

LA0.6

HI0.3

IN1.4

NY8.0 5

67

8

321

4

9


Mid- Atlantic

Establishments (%)

Less than 3% 3% to less than 10% 10% to less than 20% 20% or more

Great Lakes



Products & Markets

Business Locations The geographic distribution of Marketing Consultants industry services is highly correlated with the concentration of the US population. Industry operators place themselves in urban hubs, where businesses that are heavily involved in marketing are typically located. Consequently, the Southeast, West, Mid-Atlantic and Great Lakes regions contain the largest number of operators.

SoutheastThe Southeast is estimated to comprise 25.0% of total industry establishments, in line with the 25.7% of the US population that resides in the region. The large population in this part of the United States precipitates high demand for a range of goods, which generates demand for marketing and related advisory services. Florida comprises the highest number of establishments, with an estimated 11.7% of total industry establishments in 2019. The large population in relatively concentrated areas and a large retail industry creates high demand for advertising and, thus, marketing consulting services.

WestThe West is projected to account for 22.8% of establishments in 2019, which is above the 17.3% share of the population located in the region. California alone represents 16.8% of total industry establishments due to the large population in the area and booming, highly marketable industries such as film production, manufacturing and retail. Additionally, the region benefits from several urban and culturally significant cities such as Los

Angeles, San Francisco, Silicon Valley and San Diego.

Mid-AtlanticThe Mid-Atlantic comprises 15.2% of the total US population and is estimated to account for 15.7% of industry establishments. New York accounts for the majority of establishments, with an estimated 8.0%, while New Jersey is also expected to contain 3.1% of industry establishments. These two states are prominent for booming financial services companies and also have a large number of corporate headquarters. As a result, a high number of marketing consultants are located in the area to provide marketing advisory services to major firms. For similar reasons the Great Lakes region is home to 11.3% of industry establishments, led by large cities such as Chicago in Illinois, which contains 4.8% of establishments.

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EstablishmentsPopulation

Distribution of establishments vs. population




Cost Structure Benchmarks

Cost structures within the Marketing Consulting industry vary based on a variety of firm-specific factors, including business size and markets served.

WagesMarketing consultant firms employ highly educated individuals, most of

whom possess either a bachelor’s degree or graduate degree in business or a related field. In addition, work in this industry requires a high degree of client engagement and client service skills, both of which command higher salaries. This has led wages’ share of revenue to increase from 31.3% of industry revenue

Key Success Factors Ability to compete on tenderConsulting firms are subject to high levels of competition and therefore must compete on price and service offerings.

Well-developed internal processesAdvisory services are highly labor intensive, and thus, industry operators are required to ensure that costs are kept low through time-management and sufficient client contact.

Access to a highly skilled workforceConsultants are valuable due to their education and experience, which enable them to provide advice and guidance on how companies should operate. Firms achieve

great success by hiring a skilled workforce that can produce the best solutions.

Establishment of brand namesCompanies are most successful when they have an established reputation for high-quality solutions. Therefore, firms that can establish a strong reputation are more likely to win new business.

Good project management skillsIndustry operators are tasked with analyzing competitive positions and creating business solutions. As a result, it is important for operators to have good project management skills to meet deadlines and understand client needs.

Market Share Concentration

The Marketing Consultants industry is highly fragmented and primarily consists of small, nonemployer firms that service niche markets. In fact, according to the US Census Bureau, 91.2% of employer operators staff fewer than 10 people. However, the industry still contains several companies that control significant portions of the market; advertising conglomerates and large traditional consulting firms account for a substantial portion of industry revenue. These firms include the likes of Accenture PLC, Publicis Groupe (Publicis) and WPP PLC; these three companies, which are the largest industry players, are expected to collectively account for 9.8% of total revenue in 2019.

Over the past five years, the market share concentration for the Marketing Consultants industry has remained relatively unchanged. Although the largest industry firms have continued to pursue mergers and acquisitions, these have not been sufficient to change the structure of the overall industry. Two of the largest advertising conglomerates, Omnicom and Publicis, proposed a merger in July 2013 to confront the ever-growing power of media giants Google and Facebook. If accomplished, this merger would have made the Publicis Omnicom Group the largest advertising conglomerate and likely have made them the leading player in the industry. However, the merger fell through in May 2014.

Competitive LandscapeMarket Share Concentration | Key Success Factors | Cost Structure Benchmarks Basis of Competition | Barriers to Entry | Industry Globalization

Level Concentration in this industry is Low

IBISWorld identifies 250 Key Success Factors for a business. The most important for this industry are:



Competitive Landscape

Cost Structure Benchmarkscontinued

in 2014 to 32.9% in 2019. This trend is expected to continue over the five years to 2024 as industry employees’ skill-sets continue to develop, enabling them to command higher wages. Ultimately, wages share of revenue is expected to increase from 32.9% in 2019 to 34.0% in 2024.

PurchasesPurchases are expected to account for 1.5% of industry revenue in 2019. Businesses typically require the procurement of software and office-related products. Reimbursing agents for expenses, such as travel are included in the purchases segment. Additionally, sub-contracting of professional services can be a significant item in this category. Over the five years to 2019, purchases share of industry revenue has declined has revenue growth outpaced purchase expenses during the period.

ProfitIndustry profit, defined as earnings before interest and taxes, is anticipated to account for 8.9% of industry revenue in 2019. Profit has only increased slightly over the past five years from its level of 8.7% in 2014, mainly due to price-based competition creating downward pressure. New entrants to the industry have attempted to garner business by offering their services to clients for lower prices than their competitors. This trend of price undercutting has put pressure on marketing consultants’ profit over the five years to 2019, despite increased demand for their services. This trend is expected to persist over the five years to 2024, as new entrants continue to enter the market, leading to increased price-based competition among operators. Additionally, operational expenses are expected to slightly outpace revenue

Sector vs. Industry Costs

n Profi tn Wagesn Purchasesn Depreciationn Marketingn Rent & Utilitiesn Other

Average Costs of all Industries in sector (2019)

Industry Costs (2019)

0

20

40

60

Perc

enta

ge o

f rev

enue

80

100


12.4 8.9

52.8

1.71.2 1.01.5

32.9

31.2

3.4 1.31.18.6

42.0

Sector vs. Industry Costs

n Profi tn Wagesn Purchasesn Depreciationn Marketingn Rent & Utilitiesn Other

Average Costs of all Industries in sector (2019)

Industry Costs (2019)

0

20

40

60

Perc

enta

ge o

f rev

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12.4 8.9

52.8

1.71.2 1.01.5

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42.0




Basis of Competition The Marketing Consulting industry comprises firms with the skills, expertise and flexibility to meet the needs of a variety of clients with varying budget constraints. Due to the wide range of services offered and the variety of sectors the industry services, many consultants focus on providing solutions to one sector. Furthermore, consulting services are a discretionary expense for businesses and, therefore, quality of services and proof of success are key to winning new business.

Internal competitionThe reputation of a consulting firm is key to its success. Over time, consultants develop a record of success or failure based on previous strategies that have been implemented as a result of their advice. It is this reputation, substantiated by past client performance against a benchmark such as stock price, that is the

biggest selling point for firms. Notable past campaigns and successes can be key to winning new business and building a reputation for high-quality services.

Firms can also position themselves in the market through price-based competition. This was particularly prevalent during and following the recession as companies sought to reduce expenditures and were wary of making new investments. The largest industry firms benefit from economies of scale in marketing and service distribution, giving them a greater capacity to serve clients around the country and win high-value contracts. Small and medium-size firms, however, may have lower overhead costs, enabling them to provide high-quality service at a lower cost. Furthermore, small consultancy firms have greater flexibility and may undertake consultancies at a strategic loss to establish a hold within a particular consulting area.

Cost Structure Benchmarkscontinued

growth during the period as well. Overall, IBISWorld estimates that industry profit will decrease from 8.9% of industry revenue in 2019 to 8.7% in 2024.

DepreciationDepreciation in this industry is relatively low, estimated at 1.0% of industry revenue in 2019.

MarketingMarketing expenses are an essential component of a consulting firm’s operating costs, as marketing consulting companies attempt to differentiate themselves from competitors in their own or other related industries.

RentRent expenses are expected to account for 1.6% of industry revenue in 2019. Operators in the industry often consider

their offices and buildings a representation of their brand and invest in modern, attractive properties. Although a large share of consulting work is done off-site, at a client’s place of business, facilities for consultants are necessary for day-to-day work, client meetings and training sessions. Meanwhile, utility costs represent payments for water, gas, electricity and communications networks.

UtilitiesIn 2019, utility expenses are estimated to account for 0.1% of industry revenue, as operators need to only heat and cool their office space.

OtherOther industry costs relate to expenses such as accounting, insurance, bank service and legal fees.

Level & Trend Competition in this industry is High and the trend is Increasing




Barriers to Entry The Marketing Consultants industry has low barriers to entry, since firms experience minimal start-up costs and no regulation. Consultants are valuable to businesses due to their knowledge of competitive practices and improving existing systems. Therefore, a large proportion of the industry is made up of small nonemploying firms that operate in niche markets or narrow geographic areas. However, although entrance into the industry is relatively simple, it can be difficult for firms to be successful in a highly competitive marketplace.

Marketing consultants compete on reputation and, therefore, new entrants endure stringent competition from incumbent players that are already established. This may force new companies to compete on price; however,

may struggle against larger firms that are able to undercut smaller players due to economies of scale. Additionally, larger industry firms typically provide a wide variety of services such as management, IT and accounting services. Therefore, clients may be inclined to use larger firms as a one-stop shop for all their needs.

Basis of Competitioncontinued

External competitionThe industry contends with competition from a variety of other consulting firms that may also be able to tailor client solutions. The Management Consulting industry (IBISWorld report 54161) can often provide marketing advice in conjunction with strategy services, while the IT Consulting industry (54151) can provide advice regarding digital marketing and planning.

In addition to competition from consulting firms external to this industry, the Accounting Services industry (54121c) has emerged as a significant competitor to traditional marketing consultants. Consulting services represent the top-performing segment for each of the Accounting Services industry’s major

players. At PricewaterhouseCoopers, for example, the consulting or advisory line of business accounts for an estimated 30.0% of total global company revenue. Many of the industry’s largest firms are transitioning into full-service consulting providers, as this higher-margin, less-competitive service offers more growth potential than traditional audit and assurance practices.

The Advertising Agencies industry (54181) also threatens marketing consultants. Advertising agencies are increasingly consolidating to form one-stop shops for clients looking for marketing planning and advice in addition to advertisement campaign creation and management. This trend is expected to continue over the five years to 2024.

Barriers to Entry checklist

Competition HighConcentration LowLife Cycle Stage GrowthCapital Intensity LowTechnology Change LowRegulation and Policy NoneIndustry Assistance None


Level & Trend Barriers to Entry in this industry are Low and Steady




Industry Globalization

There is a low level of industry globalization in the Marketing Consultants industry. The industry involves no international trade and the vast majority of firms operate on a domestic basis. Larger industry players that are involved in management consulting service international

markets and the United States; however, international clients typically use local offices rather than international ones. Nonetheless, globalization is increasing due to the rising prominence of digital marketing, which can provide advertising and brand recognition globally.

Level & Trend Globalization in this industry is Low and the trend is Increasing



Other Company Performance

Founded in 1985 and headquartered in London, WPP PLC (WPP) is the world’s largest advertising group by revenue. WPP encompasses over 100 companies and employs an estimated 134,000 people worldwide. As advertising often carries over into marketing and vice versa, large advertising groups such as WPP tend to hold firms that provide market research and market consulting services. In recent years, WPP has experienced positive growth across the majority of its operations as improving economic conditions, both in the United States and abroad, have led to higher corporate profit levels, enabling companies to hire advertising and marketing consultants. In 2018, WPP’s total company revenue was $20.8 billion.

WPP organizes its companies into the following groups: advertising and media

investment management, information, data investment management, public relations and public affairs, branding and identity and healthcare and specialist communications. Most of WPP’s industry-specific revenue comes from the 20 companies in the specialist communications segment. These companies, include OglivyOne Business for corporate clients, J. Walter Thompson for branding services, MJM for event marketing and Imagina for media and production services. WPP also owns Penn Schoen Berland (PSB), which is a global consulting agency that specializes in communication strategy for political, corporate and entertainment clients. PSB was the first market research firm to use overnight tracking polls and computer analysis to track voter inclinations,


Accenture PLC (Accenture) is a multinational management consulting, technology services and outsourcing company. Headquartered in New York, Accenture has a large global presence, with operations in 55 countries. In fiscal 2018 (year-end August), the company generated $40.0 billion in global revenue, with an estimated 45.0% coming from operations within the United States.

Accenture’s business is structured around the major operating groups of its clients: consumer goods and services (e.g. consumer packaged goods or industrial equipment); communications, high technology and media; financial services (e.g. banking and insurance); resources (e.g. utilities, chemicals and energy); and government. In recent years, as corporate profit has returned to healthy levels, Accenture has experienced positive growth across all of its operating segments.

Accenture earns most of its Marketing Consulting industry-specific revenue from operations within the

communications, high technology and media segment. Within this segment, Accenture provides companies with a range of marketing consulting services, ranging from broad strategy and marketing consulting to more-specialized market insight such as strategies for the integration of mobile services into operations and digital monetization for media content owners and distributors. Accenture, like other consulting firms, has experienced high growth in digital services and analytics over the past five years because of the changing business landscape. In 2015, the company acquired Agilex Technologies, a provider of digital solutions for the federal government. In addition to digital market consulting, Accenture earns industry-specific revenue from operations within the consumer goods and services group, where it provides clients with a range of market analytics and marketing strategies. In fiscal 2019, Accenture’s US industry-specific revenue is expected to be $2.2 billion.

Major CompaniesThere are no Major Players in this industry | Other Companies

Accenture PLC Market Share: 3.9%

WPP PLC Market Share: 3.7%



Major Companies


Founded in 1926 and headquartered in Paris, Publicis Groupe (Publicis) is a multinational advertising and public relations group with 75,588 employees in over 100 countries. North American operations account for the bulk of Publicis’s total company revenue (an estimated 50.0%), while operations in Europe account for an estimated 30.0% of company revenue. Along with Interpublic, Omnicom and WPP PLC, Publicis is one of the “big four” advertising conglomerates. In 2018, Publicis generated $11.8 billion in total company revenue.

Publicis segments its subsidiary companies into four broad categories: advertising, digital, media and specialized and marketing. In recent years, Publicis’s digital group has experienced rapid growth, as companies are increasingly seeking advertising and marketing advice to adapt to the emerging digital market. Additionally, as

the economic climate has improved and corporate profit has returned to healthy levels, companies have been more willing to hire advertising and marketing services, leading Publicis to experience growth across the majority of its operating segments.

The company’s industry-specific revenue is generated from operations in its specialized and marketing segment and, to a lesser extent, from companies in the digital and media segments. For example, Rosetta, a fully owned subsidiary of Publicis, is a media and digital specialist that provides its clients with data-driven marketing consultation in the digital and media markets. Other major subsidiaries of Publicis that have industry-relevant operations include DigitasLBi (a global marketing and technology agency) and Razorfish (a marketing and technology company). In 2019, Publicis’s industry-specific revenue is expected to be $1.2 billion.

Other Company Performancecontinued

forever changing the way that political campaigns are conducted. In 2019, WPP is expected to generate $2.1 billion in industry-specific revenue.

Publicis Groupe Market Share: 2.1%



Capital Intensity The Marketing Consultants industry is fundamentally service oriented, and thus, capital intensity is low. IBISWorld estimates that for every dollar spent on labor, industry operators spent an average of $0.03 on capital investment in 2019. The industry has minimal equipment requirements, which include little more than computer programs and networking and computer hardware, which are necessary for conducting analysis and communicating with clients. Since the majority of industry expenditures go toward personnel costs rather than the purchase of equipment, depreciation of these fixed assets represents just 1.0% of

revenue in 2019. Both capital depreciation expenditures and capital

Operating ConditionsCapital Intensity | Technology & Systems | Revenue VolatilityRegulation & Policy | Industry Assistance

Capital Intensity

0.5

0.0

0.1

0.2

0.3

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Capital units per labor unit

Marketing Consultants

Professional, Scientific and

Technical Services

Economy

Level The level of capital intensity is Low



Operating Conditions

Technology and Systems

The Marketing Consultants industry exhibits a low level of technological change. Industry operators have a particularly low level of depreciation, as consultants are reliant on their education and experience, which enables them to analyze a company’s competitive position and develop marketing strategies and new sales methods. Consequently, industry operators are exposed to minimal technological change in their core functions. However, consultants are required to stay up to date with changing technology, such as online advertising, to be successful.

Digital marketingDigital marketing includes the use of electronic devices such as computers, smartphones and tablets to advertise and engage with consumers. Traditional media, such as print news, radio and, to some extent, TV, has diminished in importance, as social media networks and digital platforms compete for consumer time and money. This shift has pushed clients’ marketing budgets away from more traditional forms of media

and advertising toward online-based campaigns and social media outreach efforts. Consultants need to be aware of how to efficiently market and generate new sales through these devices so they can advise businesses on how to reach customers. As consumers are conducting an increasingly large proportion of tasks online, digital marketing presents a highly effective way to reach people. Additionally, smartphone internet browsing and applications are providing a new way for consumers to access goods and services and, therefore, are increasingly important for consultants to understand.

The use of data and general programming is also becoming increasingly important for targeted marketing. Cookies (small files stored on a computer holding specific data for a website) and other user data can be used to understand more about consumers and their behavior, which can lead to marketing appropriate products to the right demographics. Additionally, more consultants are taking advantage of market research and qualitative analysis to make better business decisions.

Capital Intensitycontinued

intensity have remained stable over the past five years.

In 2019, direct labor costs account for an estimated 32.9% of industry revenue. Total wage costs in this industry are high due to the high level of education and experience required by marketing consultants. The industry is also reputation based, which means clients

pay a premium for consultants with a well-known name, reputation and professional network that can draw business to the firm. A project can be won or lost if a certain expert enters or departs the company. The consultation process is very personalized, and a firm’s most respected consultants are often requested by name.

Level The level of technology change is Low

Revenue Volatility Over the five years to 2019, the Marketing Consultants industry has exhibited a low level of volatility. Industry revenue has increased as much as 6.1% in 2015 and has grown as little as 3.1% in 2017. Marketing consulting revenue is linked

to, but not determined solely by, macroeconomic conditions. Corporate profit levels determine the availability of funds for private sector consulting, while tax revenue largely determines the funds available for public sector clients to use.

Level The level of volatility is Low



Operating Conditions

Regulation and Policy The Marketing Consultants industry is not exposed to any direct regulation. Industry operators are required to be aware of regulation pertaining to marketing and sales, such as the laws set by bodies such as the Federal Trade Commission and the Federal Communications Commission. Specifically, the Federal Trade Commission Act requires advertising to be truthful and nondeceptive. For example, advertising a

product or service that misleads consumers, provides unavoidable consumer injury, makes false claims, fails to provide vital information or misrepresents a product’s performance, features, safety, price or effectiveness, is noncompliant with the Federal Trade Commission’s regulations. However, no regulation is specific to advisory operations, which reduces industry barriers to entry.

Level & Trend The level of Regulation is None and the trend is Steady

In particular, advertising budgets help drive demand for marketing consultants who specialize in developing branding and sales strategies. Nevertheless, some companies consider consulting fees to be a form of discretionary spending and may defer them if corporate profit or money for advertising is constrained. However,

volatility within the industry can sometimes stimulate demand for marketing consultants. For example, companies that experience slow growth or a decline may pay for marketing consultants to help them rebrand or target new markets in an effort to reorganize the company.

Revenue Volatility continued

Industry Assistance The Marketing Consultants industry obtains no special assistance or protection from the government. Nevertheless, consultants may benefit from joining associations. The Association of Management Consulting Firms (AMCF)

provides professional development opportunities, industry research, legislative monitoring and referrals and other services to its members. The industry is also not exposed to any grants or tariffs that benefit operators.

Level & Trend The level of Industry Assistance is None and the trend is Steady



Key StatisticsRevenue

($m)

Industry Value Added

($m)Establish-

ments Enterprises Employment Exports ImportsWages ($m)

Domestic Demand

Corporate profit ($b)

2010 32,253.5 14,517.9 152,669 152,049 256,352 -- -- 11,002.3 N/A 1,728.82011 35,743.1 15,913.7 147,026 146,416 264,846 -- -- 11,874.8 N/A 1,809.82012 41,038.9 17,505.8 153,701 153,018 284,787 -- -- 13,278.7 N/A 1,997.42013 42,594.6 17,412.7 172,401 171,760 304,816 -- -- 13,408.8 N/A 2,010.72014 44,481.3 18,157.1 171,677 170,993 327,426 -- -- 13,931.3 N/A 2,118.82015 47,180.9 19,643.1 193,090 192,406 354,802 -- -- 15,208.1 N/A 2,057.32016 49,494.5 20,682.7 191,490 190,929 362,556 -- -- 16,079.8 N/A 2,035.02017 51,037.0 21,755.1 200,400 199,833 377,281 -- -- 16,702.5 N/A 2,099.32018 53,421.0 22,822.9 209,106 208,510 395,433 -- -- 17,501.4 N/A 2,265.22019 55,293.1 23,682.1 218,657 218,049 412,039 -- -- 18,211.9 N/A 2,395.42020 55,899.1 24,090.7 226,542 225,949 422,202 -- -- 18,611.2 N/A 2,410.42021 56,521.9 24,474.4 233,065 232,482 431,497 -- -- 18,980.4 N/A 2,405.72022 57,407.7 24,965.5 240,858 240,283 441,927 -- -- 19,407.0 N/A 2,426.12023 58,489.4 25,482.4 247,332 246,755 452,120 -- -- 19,838.2 N/A 2,471.72024 59,980.7 26,153.3 255,383 254,800 464,882 -- -- 20,387.3 N/A 2,567.5

IVA/Revenue (%)

Imports/ Demand

(%)

Exports/ Revenue

(%)

Revenue per Employee

($’000)Wages/Revenue

(%)Employees

per Est.Average Wage

($)

Share of the Economy

(%)2010 45.01 N/A N/A 125.82 34.11 1.68 42,918.72 0.092011 44.52 N/A N/A 134.96 33.22 1.80 44,836.62 0.102012 42.66 N/A N/A 144.10 32.36 1.85 46,626.78 0.112013 40.88 N/A N/A 139.74 31.48 1.77 43,989.82 0.112014 40.82 N/A N/A 135.85 31.32 1.91 42,547.93 0.112015 41.63 N/A N/A 132.98 32.23 1.84 42,863.63 0.112016 41.79 N/A N/A 136.52 32.49 1.89 44,351.22 0.122017 42.63 N/A N/A 135.28 32.73 1.88 44,270.72 0.122018 42.72 N/A N/A 135.09 32.76 1.89 44,258.83 0.122019 42.83 N/A N/A 134.19 32.94 1.88 44,199.46 0.122020 43.10 N/A N/A 132.40 33.29 1.86 44,081.27 0.122021 43.30 N/A N/A 130.99 33.58 1.85 43,987.33 0.122022 43.49 N/A N/A 129.90 33.81 1.83 43,914.49 0.122023 43.57 N/A N/A 129.37 33.92 1.83 43,878.17 0.132024 43.60 N/A N/A 129.02 33.99 1.82 43,854.78 0.13

Figures are in inflation-adjusted 2019 dollars.

Revenue (%)

Industry Value Added

(%)

Establish-ments

(%)Enterprises

(%)Employment

(%)Exports

(%)Imports

(%)Wages

(%)

Domestic Demand

(%)

Corporate profit (%)

2011 10.8 9.6 -3.7 -3.7 3.3 N/A N/A 7.9 N/A 4.72012 14.8 10.0 4.5 4.5 7.5 N/A N/A 11.8 N/A 10.42013 3.8 -0.5 12.2 12.2 7.0 N/A N/A 1.0 N/A 0.72014 4.4 4.3 -0.4 -0.4 7.4 N/A N/A 3.9 N/A 5.42015 6.1 8.2 12.5 12.5 8.4 N/A N/A 9.2 N/A -2.92016 4.9 5.3 -0.8 -0.8 2.2 N/A N/A 5.7 N/A -1.12017 3.1 5.2 4.7 4.7 4.1 N/A N/A 3.9 N/A 3.22018 4.7 4.9 4.3 4.3 4.8 N/A N/A 4.8 N/A 7.92019 3.5 3.8 4.6 4.6 4.2 N/A N/A 4.1 N/A 5.72020 1.1 1.7 3.6 3.6 2.5 N/A N/A 2.2 N/A 0.62021 1.1 1.6 2.9 2.9 2.2 N/A N/A 2.0 N/A -0.22022 1.6 2.0 3.3 3.4 2.4 N/A N/A 2.2 N/A 0.82023 1.9 2.1 2.7 2.7 2.3 N/A N/A 2.2 N/A 1.92024 2.5 2.6 3.3 3.3 2.8 N/A N/A 2.8 N/A 3.9

Annual Change

Key Ratios

Industry Data




Jargon & Glossary

BARRIERS TO ENTRY High barriers to entry mean that new companies struggle to enter an industry, while low barriers mean it is easy for new companies to enter an industry.

CAPITAL INTENSITY Compares the amount of money spent on capital (plant, machinery and equipment) with that spent on labor. IBISWorld uses the ratio of depreciation to wages as a proxy for capital intensity. High capital intensity is more than $0.333 of capital to $1 of labor; medium is $0.125 to $0.333 of capital to $1 of labor; low is less than $0.125 of capital for every $1 of labor.

CONSTANT PRICES The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using the current year (i.e. year published) as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving only the “real” growth or decline in industry metrics. The inflation adjustments in IBISWorld’s reports are made using the US Bureau of Economic Analysis’ implicit GDP price deflator.

DOMESTIC DEMAND Spending on industry goods and services within the United States, regardless of their country of origin. It is derived by adding imports to industry revenue, and then subtracting exports.

EMPLOYMENT The number of permanent, part-time, temporary and seasonal employees, working proprietors, partners, managers and executives within the industry.

ENTERPRISE A division that is separately managed and keeps management accounts. Each enterprise consists of one or more establishments that are under common ownership or control.

ESTABLISHMENT The smallest type of accounting unit within an enterprise, an establishment is a single physical location where business is conducted or where services or industrial operations are performed. Multiple establishments under common control make up an enterprise.

EXPORTS Total value of industry goods and services sold by US companies to customers abroad.

IMPORTS Total value of industry goods and services brought in from foreign countries to be sold in the United States.

INDUSTRY CONCENTRATION An indicator of the dominance of the top four players in an industry. Concentration is considered high if the top players account for more than 70% of industry revenue. Medium is 40% to 70% of industry revenue. Low is less than 40%.

INDUSTRY REVENUE The total sales of industry goods and services (exclusive of excise and sales tax); subsidies on production; all other operating income from outside the firm (such as commission income, repair and service income, and rent, leasing and hiring income); and capital work done by rental or lease. Receipts from interest royalties, dividends and the sale of fixed tangible assets are excluded.

INDUSTRY VALUE ADDED (IVA) The market value of goods and services produced by the industry minus the cost of goods and services used in production. IVA is also described as the industry’s contribution to GDP, or profit plus wages and depreciation.

INTERNATIONAL TRADE The level of international trade is determined by ratios of exports to revenue and imports to domestic demand. For exports/revenue: low is less than 5%, medium is 5% to 20%, and high is more than 20%. Imports/domestic demand: low is less than 5%, medium is 5% to 35%, and high is more than 35%.

LIFE CYCLE All industries go through periods of growth, maturity and decline. IBISWorld determines an industry’s life cycle by considering its growth rate (measured by IVA) compared with GDP; the growth rate of the number of establishments; the amount of change the industry’s products are undergoing; the rate of technological change; and the level of customer acceptance of industry products and services.

NONEMPLOYING ESTABLISHMENT Businesses with no paid employment or payroll, also known as nonemployers. These are mostly set up by self-employed individuals.

PROFIT IBISWorld uses earnings before interest and tax (EBIT) as an indicator of a company’s profitability. It is calculated as revenue minus expenses, excluding interest and tax.

Industry Jargon

IBISWorld Glossary

IT CONSULTANT A consultant who provides assistance to businesses and other organizations on software, hardware, data processing and communications infrastructure.

MANAGEMENT CONSULTANT A consultant who provides advice and assistance to businesses and other organizations on various issues, including management.

STRATEGIC CONSULTING The contracting of a consultant to advise on long-term planning with an eye toward minimizing costs and maintaining profit, often in conjunction with the development of new products and services.



Jargon & Glossary

VOLATILITY The level of volatility is determined by averaging the absolute change in revenue in each of the past five years. Volatility levels: very high is more than ±20%; high volatility is ±10% to ±20%; moderate volatility is ±3% to ±10%; and low volatility is less than ±3%.

WAGES The gross total wages and salaries of all employees in the industry. The cost of benefits is also included in this figure.

IBISWorld Glossary continued


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Marketing Consultants in the US

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