The operating profit margin of the advertising and related services industry in Alberta is on the rise, according to a new report released Friday by Statistics Canada.
The federal agency said the margin in the industry has risen from 10.2 per cent in 2014 to 16.3 per cent in 2018.
Operating revenue during that period is down slightly going from $627.8 million in 2014 to $605 million in 2018. It had dipped to $570 million in 2017.
StatsCan said operating expenses have also dropped. They were $563.9 million in 2014 falling to $506.2 million in 2018.
It said salaries, wages, commissions and benefits accounted for $198.9 million in the Alberta advertising industry in 2014 but decreased to $166.2 million by 2018.
Throughout Canada, the advertising and related services industry reported $10.7 billion in operating revenue in 2018, up 3.2 per cent from 2017.
“The market for digital advertising continues to evolve, spurring growth in the industry. The industry’s operating profit margin, which has increased each year since 2012, reached 14.6 per cent in 2018,” said the federal agency.
“The industry is concentrated in Ontario and Quebec, with these two provinces accounting for 81.5 per cent of the total operating revenue earned in 2018. In Ontario, operating revenue increased by 3.1 per cent from 2017, while in Quebec, it grew by 2.9 per cent. The provinces with the highest rates of growth in operating revenue were Prince Edward Island (+9.5 per cent), New Brunswick (+6.6 per cent) and Alberta (+6.1 per cent).
“Operating expenses grew by 2.7 per cent in 2018. Salaries, wages, commissions and benefits continued to represent the largest share of operating expenses, up 3.8 per cent from 2017.”
StatsCan said sales to Canadian businesses (81.7 per cent) continued to account for the bulk of the industry’s sales in 2018. A smaller portion of sales were to governments, not-for-profit organizations and public institutions (4.2 per cent). The industry’s share of sales to clients outside Canada reached 13.0 per cent in 2018, exceeding that of many other service industries, it said.
“While developing and creating large-scale advertising campaigns lends itself mainly to face-to-face meetings and in-person transactions, the industry still earned $482.9 million, or 5.1 per cent, of its sales through e-commerce in 2018,” added the federal agency.
“One trend in digital advertising is the use of programmatic advertising services, which facilitate the automated buying and selling of advertising online. These services offer advertisers the ability to tailor their advertising spending to reach specific, targeted audiences on websites and other Internet applications, based on a variety of information, including user demographics and interests.”
Mario Toneguzzi is a business reporter in Calgary.
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