Marketing Consulting Services

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 39,000 marketing consulting services in the US provide advice and assistance on marketing related issues. Services include marketing strategy and market development consulting and implementation; sales management and development consulting and implementation; and strategic management consulting and implementation. Most marketing consulting firms are small, independent operators.

Variable Demand

Demand for marketing consulting services can vary depending on client needs.

Increasingly Complex Environment

Shifting demographics and the advent of digital technology have fundamentally changed the discipline of marketing and created a more complex and fragmented environment for clients and consultants.

Industry size & Structure

The average marketing consulting firm operates out of a single location, employs 6-7 workers, and generates about $1 million annually.

    • The marketing consulting services industry consists of about 39,000 establishments that employ 262,400 workers and generate about $43 billion annually.
    • The industry is fragmented; the top 50 companies account for about 24% of industry revenue.
    • Large management consulting firms that provide marketing consulting services include Bain, Boston Consulting Group, and McKinsey. ZS Associates is a management consulting firm that specializes in sales and marketing. Most marketing consulting firms are small, independent operators.
                                  Industry Forecast
                                  Marketing Consulting Services Industry Growth

                                  Coronavirus Update

                                  Oct 29, 2021 - Entertainment to Top 2021 US Digital Ad Spending Growth
                                  • In the early days of the pandemic, businesses pulled back sharply on spending, including marketing and advertising. However, US ad spending remained mostly resilient, buoyed by the agility of digital media formats. Total US ad spending in 2020 declined 1.3% to $227 billion, according to ad firm MAGNA. A 10% rise in digital ad spending was not enough to offset a 16% drop in linear ads. US ad spending increased 32% in the first half of 2021 compared to the same period a year earlier, according to a revised outlook released in late September by MAGNA. Some hard-hit verticals including automotive, finance, restaurants, and retail saw spending increases of more than 50% in the first half of 2021. MAGNA expects total US ad spending for 2021 to rise more than 23% compared to 2020 and reach $277 billion.
                                  • The changes in consumer buying habits that occurred during the pandemic are expected to have long-term effects on marketing strategies, spending, and channels. By 2025, 20% of B2C sales will come from recurring revenue, according to Gartner. Subscription sales increased amid COVID-19 as consumers sought to replenish supplies via zero-click purchases. As the segment has grown, competition has heated up and marketers may struggle to retain customer loyalty. To reduce customer churn and avoid commoditization as the subscription space becomes more crowded, marketers will have to anticipate emerging customer needs and offer product and service enhancements.
                                  • US digital ad spending is expected to see continued growth in 2021 after a better-than-expected rise in 2020, according to eMarketer. Despite the pressures of the pandemic, US digital ad spending in 2020 grew nearly 14.9%. While 2020 growth was well below recent norms, digital ad sales outperformed eMarketer’s expectations at the beginning of the pandemic. For 2021, US digital ad spending is expected to rise 25.5% to more than $191 billion, according to eMarketer. The retail sector will continue to garner the most US digital ad dollars in 2021, accounting for nearly a quarter of all spending. Other top industries for ad spending include consumer packaged goods, and financial services. After a tough run earlier in the pandemic, entertainment will top digital ad spending growth with an increase of 37.2% over 2020, followed by retail (+34.5%), and consumer packaged goods (+31.7%). As a whole, digital is projected to keep gaining share at the expense of other channels as it is uniquely able to deliver personalized ads and target specific demographics efficiently.
                                  • Google and Amazon enjoyed strong growth in ad revenue in Q3 2021, further signaling a solid rebound from the pullback in advertiser spending earlier in the pandemic. Google’s ad revenue increased 43% to $53.1 billion in Q3 2021 compared to the same period in 2020. Google’s YouTube division’s ad sales jumped 43%. Google executives have noted that YouTube has increasingly evolved into an ecommerce site during the pandemic. Revenue for Amazon’s “other” financial reporting segment, which is mainly advertising, jumped 49% over Q3 2020 to $8.1 billion. Google’s and Amazon’s ad revenue growth has been part of a larger pandemic-related tech boom as consumers and business relied more on smart devices, online shopping, cloud services, and video streaming.
                                  • Industry insiders point out there was no historical data to fall back on for marketing during a global pandemic. As conditions rapidly evolved early in the pandemic, brands rolled out fresh marketing campaigns in record time. While long-term mapping for marketing strategies will remain, marketers believe the agility lessons learned during COVID-19 are here to stay. Marketers are likely to lean on data analytics to pinpoint emerging trends and move quickly with fresh creative that builds on long-term brand equity, according to Marketing Dive.
                                  • Hard-hit industries – such as hospitality and travel – may recalibrate their marketing and ad budgets as COVID-19 cases fall in the US and vaccination rates rise. After a brief travel surge in June 2021, travel bookings fell as the highly contagious Delta variant of the coronavirus drove a fourth wave of the pandemic. However, new cases began falling in mid-September and travel bookings are back on the upswing. In early October, United Airlines said its US December domestic schedule will be its strongest since March 2020. United’s scheduled flights in December are expected to reach 90% of what they were in December 2019. The US reopening to vaccinated foreign travelers in November is also expected to be a boost to the travel and hospitality sector, although the full effects of the reopening likely won’t be realized until the spring and summer of 2022.
                                  • Although American optimism about the economy continues to gain ground, consumer spending is still focused on enhancements to in-home working and living, according to an October report by McKinsey & Company. In August 2021, sales at physical stores was up 5% compared to the same month a year earlier, but e-commerce levels remained high – up 30% compared to August 2020. The trend suggests omnichannel is holding ground as consumer shopping habits are a blend of in-store and online with social media holding increasing sway over categories including jewelry, accessories, and fitness. The effect of rising Delta cases reinforced consumers’ focus on enhancing in-home experiences, and spending on consumer electronics, home improvement, and pet supplies rose. McKinsey notes that as the pandemic has worn on consumers’ brand loyalties have wavered and 40% report having switched brands.
                                  • Marketing budgets in 2021 have fallen to their lowest level on record, according to the Gartner CMO Spend Survey released in mid-July 2021. Despite chief marketing officers’ (CMOs) confidence that budgets would rebound after the cuts earlier in the pandemic, 2021 marketing budgets fell to 6.4% of company revenues compared to 11% seen in 2020. Among specific industries, travel and hospitality, manufacturing, and technology product firms saw the biggest dips in marketing budgets as a share of revenue, and no industry enjoyed a double-digit share. Consumer goods firms had the biggest marketing budgets at 8.3% of company revenue. Smaller firms (revenue under $500 million) on average had marketing budgets that were 8.6% of revenue, while larger companies’ (revenue of more than $2 billion) marketing budgets were only 5.7% of revenue. Pure-play digital channels accounted for more than 72% of marketing budgets. Gartner surveyed 400 CMOs and other marketing leaders in France, Germany, North America, and the UK between March and May 2021.
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