MotionMedia - Sample Digital Agency Business Plan

25 © BPlanExperts.com When internet advertising began to grab a substantial share of the media market, the industry was flooded with small design firms, often sole traders, looking to exploit new technology for advantage. The proliferation of small companies, which tend to earn less, has led to a drop in the average wage, as employment growth has outstripped wages increases. Larger firms are now starting to buy up many of these small companies. IBIS World forecasts that this industry will grow by 3.6% over the five year period to 2013-14. Growth will be insignificant in 2009-10 as the effects of the financial crisis continue to hurt demand for industry services. However, over the remaining years of the outlook period, a broad-based economic recovery will return the industry to strong growth. Opportunities that are expected to be seized include the continuing move by clients towards use of more cost effective, targeted and direct forms of promotional expenditure. Continuing strong growth in web-based advertising and products will also give this industry a boost. On the supply side, technology will continue to improve the quality and reduce the production cost of design work. This will lead to higher profits and lower the need for large staff numbers, though employment is still expected to grow along with revenue. On the other hand, improving technology will lower the barriers of entry to the industry, potentially creating more competition from low-cost desktop publishers. Another challenge to the industry is the evident oversupply of graphics courses and graduates in relation to industry demand and growth.