University Advertising Industry Report: Global Forces & Analysis

This report provides a comprehensive analysis of the global advertising industry, focusing on the impact of various external forces. It utilizes Porter's Five Forces framework to examine the competitive landscape, including threats of new entrants, bargaining power of suppliers and buyers, threats of substitutes, and rivalry among existing competitors. The report highlights the importance of adapting to current trends such as environment-friendly advertising, digital marketing, and the use of social media platforms. It also discusses the challenges and opportunities facing advertising agencies, emphasizing the need for innovation and strategic adaptation to maintain success in a dynamic market. The analysis covers the trends in the advertising industry, focusing on the shift towards digital platforms and the importance of understanding consumer behavior. The report concludes that the advertising industry must evolve and adopt innovative strategies to thrive, particularly by leveraging digital platforms and emphasizing environmentally conscious advertising practices. This report is contributed to Desklib, a platform offering AI-based study tools for students.

RUNNING HEAD: GLOBAL FORCES AND THE ADVERTISING
INDUSTRY
GLOBAL FORCES AND THE ADVERTISING INDUSTRY
Name of the Student:
Name of the University:
Author’s Note:

1GLOBAL FORCES AND THE ADVERTISING INDUSTRY
Executive summary:
The advertising agency has the responsibility to promote the message of the client. Through
innovative and environment-friendly ads, advertising agencies influence the targeted
customers to buy the products of the client. The business growth of a company depends upon
the appropriate advertising and marketing. This paper will use Porter’s five forces to
understand the factors, which can create an impact on the advertising industry in the
advertising industry. The present trend in this industry and the impact of these factors will be
discussed in this paper.

2GLOBAL FORCES AND THE ADVERTISING INDUSTRY
Table of Contents
Introduction:...............................................................................................................................3
Five forces analysis:...................................................................................................................3
Threats of potential entrants:..................................................................................................3
Bargaining power of the suppliers:........................................................................................4
Bargaining power of the buyers:............................................................................................4
Threats of substitutes:............................................................................................................5
Rivalry by existing competitors:............................................................................................5
Changes in the industry:.............................................................................................................6
Conclusion:................................................................................................................................6
References:.................................................................................................................................8

3GLOBAL FORCES AND THE ADVERTISING INDUSTRY
Introduction:
The advertising industry has a specific target audience. The organisation of this
industry on behalf of the client influence the targeted audience to buy the product. This
industry contains a global industry of public relation and marketing business organisations
who have the responsibility to influence the buying behaviour of the customer by influencing
them through innovative advertisement. To analyse the competitive atmosphere of this
industry, Porter’s five forces will be utilised. It will help the industry to maximise its profit
through an appropriate strategy. This paper will imply Porter’s five forces in the global
advertising industry to analyse the competitive environment of this industry. It will help to
identify factors creating an impact on the advertising agencies.
Five forces analysis:
This analysis will help to understand the power and potential of this industry. Porter’s
five forces analysis will identify the behaviour of the competitor in this industry. Business
organisation of this industry will manage the external factors which are creating an adverse
impact on the advertising agencies (E.Dobbs 2014).
Threats of potential entrants:
This industry is open for every business organisation who are interested in expanding
the advertising business. As this industry is one of the fastest-developing industries in this
earth. It is expected that intense competition will be present in this industry. The current trend
is to make an advertisement which will be environment–friendly. The eco-friendly
advertising and marketing by following the legal barrier can be more creative and attractive
for the new generation (Johnson et al. 2017). To attract potential customer, the advertising
agencies have to promote creative advertisement, which not only promotes the message of the
client but also promote the awareness of the environment. This initiative of the advertising

4GLOBAL FORCES AND THE ADVERTISING INDUSTRY
agencies will reduce the threat of new entrants and generate brand loyalty. In this industry,
the demand for full-service advertisement agencies is always high. By managing the legal
barrier and environmental issues, advertising agencies have to create an advertisement for the
targeted market. Technological improvement is necessary to improve the performance of the
advertising industry.
Bargaining power of the suppliers:
In this industry, several suppliers are present. Among these suppliers, some suppliers
have a high reach and affinity will charge a high price for promoting advertisements for the
targeted market of the client (Johnson 2013). Bargaining power of the suppliers, who belong
in this specific region, is very high as these organisations can influence the customer through
valuable data and information. The workforce of this region is high as a result of the
advertising agencies have to develop more creative and informative ads for the targeted
market.
Bargaining power of the buyers:
The education rate and awareness of the environment of this region are very high. The
growth rate of the economy creates an impact on the concentration of the buyers. To attract
customers, clients communicate with the advert icing agencies. The advertising agencies have
the responsibilities to differentiate the commodity for the customers. Clients or buyers of this
industry are the business organisation who have interested in promoting the merchandise
through different and innovative ideas. Buyers of this industry have the financial ability to
choose among several other efficient agencies to promote the product (Johnson et al. 2017).
However, advertising for the MNC is difficult as the demand for these organisations is
always high. On the other hand, the small business organisations have to satisfy with the
work of the agency as these organisations do not have financial strength.

5GLOBAL FORCES AND THE ADVERTISING INDUSTRY
Threats of substitutes:
Advertising agencies of Western Europe and America have several platforms to
promote the ads which are newspaper, magazines, televisions, radio, cinema, internet and
outdoor. In these regions, the number of efficient and creative advertisement agencies are
always high. These agencies have the ability to attract the customer through differentiate
promotion, advertisement and strategy. Buyers of this industry prefer reputed agencies who
have a success rate and ability to generate innovative ideas for the ad. However, Instead of
advertising on the radio, these agencies are preferring the internet for the promotion. Through
the internet, advertisement agencies are successful in reaching the extreme number of
consumers. However, the use of the internet can be a threat to the advertising industry of this
region. To promote the product, the client can use the digital platform and do that they can
communicate with advertising agencies from worldwide.
Rivalry by existing competitors:
In this region, the existing competitor’s rate is high in this area. Existing competitors
have a connection with the high profile client. The customer loyalty of these successful
agencies is high. Existing competitors have the potential for making diverse and
environment-friendly ads for the clients. These agencies get financial support from the client
to use advanced technologies. Several business organisations in this industry have been
developing innovative ads for the client and fulfil the demand of the client. Facebook,
Google, Yahoo, Bing are the most popular platform for the advertisement at present. So it can
be said that the existing agencies who are successful in this sector are dominant. Other
agencies do not have the financial strength to hire powerful and successful agencies for the
advertisement.

6GLOBAL FORCES AND THE ADVERTISING INDUSTRY
Changes in the industry:
At present, there are several changes which are the trends of this industry. Advertising
agencies, as well as the client, are prioritising the Google, Facebook, and other social media
for the promotion. To utilise the social media platform appropriately, advertising agencies are
improving the web-design skills (Stephen 2016). These agencies are offering e-
advertisement, search engine marketing to the client. Appropriate utilisation of Facebook,
YouTube, Flickr, Instagram, and several other digital media can be beneficial for both the
client and the advertising agencies. Another trend is digital search and mobile advertising.
Advertising agencies are utilising digital search and mobile advertising to attract the customer
(Wong et al. 2015). Proper utilisation of YouTube, Pinterest, and Twitter can be beneficial
for this industry. The clients are interested in expanding their money for the promotion
through social media, digital platform. To attract potential customer and young generation,
advertising agencies have started using these platforms.
After the implication of Porter’s five forces, it can be said that Threats of new entry,
bargaining power of the suppliers, Threats of substitutes are creating an adverse impact on
the advertising agencies. On the other hand, the bargaining power of the buyers, and rivalry
by the existing competitors are creating a positive impact on the industry. Bargaining power
of the buyers is playing a supportive role for the industry. The competition by existing
competitors is favourable for the industry. The advertising industry is focusing on innovation
and environment-friendly advertisement.
Conclusion:
This discussion can be ended in this way that the advertising industry is changing. To
maintain the success of this industry, the advertising industry has to modify its advertisement
style with innovation. Following the present trend will help the industry to flourish in future.

7GLOBAL FORCES AND THE ADVERTISING INDUSTRY
The innovative and environment-friendly ads by the industry will be helpful to make a better
world. The targeted market of Western Europe and the USA can be influenced by the digital
advertising of the advertising agencies.

8GLOBAL FORCES AND THE ADVERTISING INDUSTRY
References:
E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), pp.32-45.
Johnson, G., Whittington, R., Scholes, K., Angwin, D. and Regner, P. (2017). Exploring
Strategy: Texts and Cases,. 11th ed. Australia: Pearson, pp.Industry and Sector Analysis
(pages 92-95).
Johnson, J.P., 2013. Targeted advertising and advertising avoidance. The RAND Journal of
Economics, 44(1), pp.128-144.
Stephen, A.T., 2016. The role of digital and social media marketing in consumer
behavior. Current Opinion in Psychology, 10, pp.17-21.
Wong, C.H., Tan, G.W.H., Tan, B.I. and Ooi, K.B., 2015. Mobile advertising: the changing
landscape of the advertising industry. Telematics and Informatics, 32(4), pp.720-734.