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Analysis of the economic impact of the advertising industry in Belgium

Analysis of the economic impact of the advertising industry in Belgium. Luc Van Coppenolle 23 October 2013. Contents. Objective and Methodology 3 Parameters analysed 4 Results 6 Economic industries of comparable size 9. 1. Purpose and Methodology. Objective :

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Analysis of the economic impact of the advertising industry in Belgium

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  1. Analysis of the economic impact of the advertising industry in Belgium Luc Van Coppenolle23 October 2013

  2. Contents • Objective and Methodology 3 • Parameters analysed 4 • Results 6 • Economic industries of comparable size 9 Analysis of the economic impact of the advertising industry in Belgium

  3. 1. Purpose and Methodology • Objective: • Analysis of the economic impact of the advertising industry in Belgium • Methodology: • Selection of companies was determinedby the Raad voor de Reclame / Conseil de la Publicité • Parameters analysed: • Turnover • Number of personnel • FiscalContribution • Sources: • 2011 Annual accounts published on the website of the National Bank of Belgium • Database “Belfirst” Analysis of the economic impact of the advertising industry in Belgium

  4. 2. Parameters analysed 2.1 Turnover • Code 70 of the (consolidated) annualaccounts • Consolidatedturnover: onlyBelgian turnover retained, basedon segment reporting • In case of condensedstatutoryannualaccounts: “grossmargin” was retained (wherebygrossmarginis defined as the sum of codes 70, 71, 72 and74) (operating revenue) minus codes 60 and 61 (“purchases” and “services andothergoods”) Analysis of the economic impact of the advertising industry in Belgium

  5. 2. Parameters analysed (continued) • 2.2 Numberof personnel • Basedon the averagenumber of Full Time Equivalents (“FTE”) as reported in the socialbalance • As a result, temporaryworkers, independent freelancers, directors are excluded 2.3 Fiscalcontribution The fiscalcontribution is determined as the sum of: • Corporate incometaxes, as reportedunder the codes 67/77, 680 and 780 • Employer’ssocial security contributions (RSZ/ONSS) as reportedunderthe code 621 • Professional withholdingtaxes (“Bedrijfsvoorheffing”/”Précompteprofessionnel”) paid as reportedunder the code 9147 • As a result, property withholdingtaxes, localandregionaltaxes, energy taxesare excluded Analysis of the economic impact of the advertising industry in Belgium

  6. 3. Results • 3.1 Advertising Agencies We have analysedthe gross margin, the number of FTE and the fiscal contribution of 48 advertising agencies that represent an important share of the Belgian Agencies market. Gross margin was retained instead of turnover, as turnover often contains media space bought from Media Companies and Media Centres (cfr infra). Analysis of the economic impact of the advertising industry in Belgium

  7. 3. Results (continued) 3.2 Media Centres We have analysedthe turnover, the number of FTE and the fiscal contribution of 9 Media Centres that represent an important share of the Belgian Media Centres market. For Media Centres only the number of FTE and the fiscal contribution are relevant since the turnover realisedby the Media Centres is also in the turnover figure of the Media Companies. Analysis of the economic impact of the advertising industry in Belgium

  8. 3. Results (continued) • 3.3 Media Companies We have analysedthe turnover, the number of FTE and the fiscal contribution of 41 Media Companies that represent an important share of the Belgian Media Companies market. Note that figures above reflect the published figures in the (consolidated) annual accounts. These figures cannot be fully allocated to the advertising industry as: • Revenue also consists of, a.o., subscription revenue • A significant part of personnel are journalists If segment information was available in the consolidated annual accounts, we only selected turnover, FTE and fiscal contribution realisedin Belgium. Turnover may include media space also reported in the turnover realisedby Media Centres. Revenue of media companies cannot be added to that of Media Centres as this would result in double counts. Analysis of the economic impact of the advertising industry in Belgium

  9. 4. Combined results and comparison with other sectors CombinedResults Comparisonwithother sectors Revenue of Media Companies also consists of a.o.subscription revenue For Media Companies notall FTE actuallywork in the advertising industry (e.g. journalists,…) Revenue of Media Centres is not taken into account toavoiddoublecounting Turnover figures taken over from FOD Economie (be.Stat) – Turnover based on VAT statements of FY 2011 ONSS – Report on the number of employees subject social contributions per 31/12/2011 Analysis of the economic impact of the advertising industry in Belgium

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