Impact of Competition on Advertising Industry

The assignment discusses the increasing competition in the advertising industry due to evolving technologies, online and digital advertising becoming more popular, and large firms competing by acquiring small specialized agencies. It also touches on the impact of consumer multi-homing on advertising markets and media competition. The document references various studies and books on global advertising practice, air pollution control, and educational reform.

CASE STUDY

TABLE OF CONTENTS
CASE STUDY......................................................................................................................................3
The main themes of emerging from Global advertising industry case study..............................3
Major development trends taking place within this industry .....................................................3
PESTLE analysis of advertising industry in 2012......................................................................4
Porter's Five Forces.....................................................................................................................5
Increasing competition in advertising industry...........................................................................5
REFERENCES ....................................................................................................................................6

CASE STUDY
The main themes of emerging from Global advertising industry case study
Introduction
Advertising industry provide the clients with ways to promote their products and share their
message. The present case study provide information about the Global adverting industry which has
focuses on the different areas. First aspect covered by this case study includes understanding about
the development in the advertising methods through use of technology.
MAIN BODY
According to (Ward, Gbadebo and Baruah, 2015), The advertising is the important technique
used by different organisation for promoting their products and services. Advertising industry is
growing through use of different technologies such as internet and online search advertising there
have been change in the method of advertising which has increased the market share of this
industry.
In the views of (Borodin And et.al., 2017), Another theme of this case study is increasing
competition in the advertising industry. Global advertising industry includes all the advertising
agencies and companies located at different places in the world. There are large – multi agency
conglomerates that competes on the basis of quality of their creative teams. Omnicom, through its
diversified agency services has acquired printing services and telemarketing companies .
CONCLUSION
This industry has seen new competition such as search companies that includes google,
yahoo etc. Global adverting industry will be becoming more competitive through the emergence of
new competitors in this industry due to its increasing profitability of this industry.
Major development trends taking place within this industry
INTRODUCTION
Traditionally, the industry focuses on targeting the specific audience on behalf of client with
a message to attract them to buy the products and services. But, the industry for its development is
shifting its focus as emerging market drive revenues from geographic sectors.
MAIN BODY
According to (Crawford, Brennan and Parker, 2017),This shift has seen the emergence of
agencies specialising in Islamic marketing. Moreover, the future trend indicate the emergence of
consumer brands in the different areas of world where are fewer consumers with brand awareness.
Moreover, with the emergence of new technologies such as internet, online search engine etc. the
demand for the adverting through these methods have increases (Jiao and Jing, 2018). The future of

adverting industry is dependent on the technology due to digital revolution this industry will be able
to grow its market share.
Many industry experts believe that convergence of internet, TV, smart phones, tablets and
laptops will great impact on this industry. The companies like Google, yahoo etc. will drive the
change in the advertising industry. Moreover, the money spent on advertising has increased
dramatically (De Mooij, 2018). The creativity in this industry will drive changes in this industry
and the future trend includes the use of technology which will be beneficial for the development and
growth of this industry. Use of search engine is also the trend which is development and the will
lead to the growth of this industry (Campbell, Martin and Fabos, 2018). Moreover, it will include
the ethical responsibility towards the consumers .
CONCLUSION
The global advertising industry has significant growth due to the emergence of various
technology. The advertising companies that are using newspapers, magazines etc. are becoming
rivals to the companies that are providing advertising through use of internet and search engine
companies like WPP. Also, there are companies in this industry because they create digital media
campaigns and implement media purchases of ads on behalf of clients.
PESTLE analysis of advertising industry in 2012
As per the Gheibi and et.al., (2018)PESTLE analysis is the assessment of macro
environmental factors that can affect the functioning of advertising industry in the country. It
consists of following components:
Political : Taxation policy, stability of government in country, favourable trade laws affects
the operations of advertising industry. For example, high corporate tax will negatively affect the
business of industry.
Economic : The level of economic growth would impact the industry. In recession period,
firms will not give more advertisements to ad agency because of lack of business and low
purchasing power of consumers. It will negatively impact the advertisement industry.
Social : Lifestyles of people are changing like they are spending more time online on
Facebook rather than watching TV, so advertising agencies are shifting their business strategies of
communicating brands on online media more on behalf of their clients.
Technological : Evolving technologies such as development of websites, online platforms
have impacted the advertisement agencies and firms now promotes it clients brands, products on
these websites or YouTube channels.

Legal : Employment laws, corporate laws, etc., affects this industry. For example, legislation
requires advertisement agencies to disclose all material information about product and must not
persuade people by false representation of facts.
Environment: Environmental laws requires advertising industry to conduct its business
operations in the most socially responsible and ethical way.
Porter's Five Forces
According to Wang and Zhang, (2015) This model assesses the force of different factors of
market. An analysis is done below:
Threat of new entry: The entry if new firm in this industry is tough which makes the force
of this element weak. Legislations barriers and competition from established agencies makes the
entry difficult for new entrants.
Bargaining power of customers: Customers are large for advertising industries that means
this factor have low force on change in prices of this industry.
Bargaining power of suppliers : There are less number of suppliers which produces
environment friendly and most economic advertisement supplies. This places the suppliers in the
dominant position. Force is very high.
Threat of substitutes: There are very few direct substitutes of advertising agencies that
makes the force is moderate. Few competitors such as digital advertising by Facebook , YouTube
etc., that provides advertising services to companies.
Competition: Due to evolving technologies in the world, online and digital advertising is
becoming more poplar than print and radio advertisement methods. Thus, there is major threat to
existing firms of companies that specialises in online marketing & advertising.
Increasing competition in advertising industry
The competition in this industry is increasing day by day as it involves very large companies
that has thousands of employees to a two person network who outsource such services. Companies
in this industry are going for conglomerate acquisitions and mergers for coping up with such intense
competition. In the view of (Athey, Calvano and Gans, (2016)Such mergers are occurring because
large firms compete on the quality of their creative teams and for enhancing its creative factor, these
multinational firms acquires small specialised agencies. Such composition is helping in coping up
with the extreme rivalry in the global advertising market. For example, WPP is a UK based
advertisement company that have added brands under who are specialists of different types of
advertisements. Such variety of brands has made WPP, a leader in the market that have employee

strength of 158000 and profits of (£)1.429 billion in the year 2011.

REFERENCES
Books and Journals
Athey, S., Calvano, E. and Gans, J. S., 2016. The impact of consumer multi-homing on advertising
markets and media competition. Management Science, 64(4), pp.1574-1590.
Borodin, V. A. And et.al., 2017, July. Application of Multi-level Analysis in the Process of
Advertising Industry Trends Study. In International conference on Humans as an Object of
Study by Modern Science. (pp. 398-405). Springer, Cham.
Crawford, R., Brennan, L. and Parker, L. eds., 2017. Global Advertising Practice in a Borderless
World. Taylor & Francis.
Gheibi, M and et.al., 2018. Controlling air pollution in a city: A perspective from SOAR‐PESTLE
analysis. Integrated environmental assessment and management, 14(4), pp.480-488.
Wang, F. and Zhang, X. P. S., 2015. The role of the Internet in changing industry
competition. Information & Management, 52(1), pp.71-81.
Ward, A., Gbadebo, A. and Baruah, B., 2015, June. Using job advertisements to inform curricula
design for the key global technical challenges. In 2015 International Conference on
Information Technology Based Higher Education and Training (ITHET) (pp. 1-6). IEEE.
De Mooij, M., 2018. Global marketing and advertising: Understanding cultural paradoxes. SAGE
Publications Limited.
Jiao, L. and Jing, W., 2018, December. The Strategies for Educational Reform of Advertising in
Colleges and Universities Under the Development of New Media. In 5th International
Conference on Education, Language, Art and Inter-cultural Communication (ICELAIC 2018).
Atlantis Press.
Campbell, R., Martin, C. and Fabos, B., 2018. Media essentials: A brief introduction. Bedford/St.
Martin's.