Strategic Marketing Analysis: Global Advertising Industry Report

This report provides a detailed analysis of the global advertising industry, focusing on strategic management and market dynamics. It employs Porter's Five Forces framework to assess the competitive landscape, including the threat of new entrants, the power of suppliers and buyers, the threat of substitutes, and competitive rivalry. The analysis highlights key trends such as the rise of consumer expenditure in developing economies, the demand for result-based compensation, and the impact of technological convergence. The report discusses the attractiveness of the industry, the impact of technological changes, and the implications for the advertising industry's future, concluding that the industry offers opportunities for innovative, consumer-focused strategies despite high competition.

Running head: MARKETING
Marketing
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Author Note

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Introduction
The global advertising industry, in this era of technology advancement leading to high
completion faces significant strategic dilemmas that are driven by the rise in consumer
expenditure in the developing economies, pressure from key advertisers for result based
compensation and technological convergence. It has become highly crucial for the mentioned
industry to manage their business through effective strategic management. Strategic management
helps an organization with the direction of the efficient areas of the department of the business
like production, fiancé, accounting as well as marketing. This in turn helps the management to
understand the aspects of both internal as well as external business environment. External
environment analysis helps the management to detect the opportunities and threats that can be
experienced by the business. In the following paragraph, a detailed analysis of the global
advertising industry with the help of the Porter’s Five Forces tool will be conducted.
Discussion
Definition of the forces
A good number of tools are used by the management to conduct strategic environmental
analysis. Some of the major tools that used for conducting internal and external include PESTLE
analysis, Porters Five forces analysis as well as SWOT analysis.
The PESTLE analysis is generally used by an organization to understand the external
environment of the business. The mentioned tool helps the management to understand the
political environment, economic environment, socio-cultural environment, technological
environment, legal environment as well as environmental factors that possess the potential to
directly or indirectly affect the profit of an organization.

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The Porter’s five forces refer to a business analysis model which helps an organization to
explaining why a good number of industries are able to sustain different profitability levels. The
Porter’s five forces are used for measuring the attractiveness, profitability as well as competition
intensity of the industry in which an organization is either operating or will be operating in
future. The Five forces of Porter’s include
Competition in the industry: this analysis helps a company to understand the degree of
competition between existing organizations in the industry.
potential of the new entrants into the industry: analysis of this force helps the companies to
understand the threat from new entrances, the barrier to new entrances which can directly affect
the organization’s profit
power of the suppliers: Analysis of this force helps the management to understand if the industry
is dominated by the suppliers or not. More is the availability of raw materials less will be the
power of the suppliers and vise versa
power of the consumers: This force analysis is conducted in order to understand the consumers
Threat of the substitute products: This force analysis is conducted in order to understand the
degree to which the business of an organize can get affected from substitute product or services.
Applying Porters five forces for analysing the Advertising industry
Threat for Potential Entrants: The barriers to new entrance is low when it comes to the
advertising industry in the year 2015. The chief entry barriers to the advertising industry includes
constrain in getting access to the key media space. Difficulties to gain deep connection with
demographics, behaviours as well as attitudes and the ability to attract, nurture as well as retain

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creative talent. All the three barriers are low since, with the advancement in technology, the
young workforce is looking for more creative and satisfactory job profiles compared to
traditional jobs. Secondly, with the rise of environmental awareness due to advertising
organizations, the ability for efficient service delivery as well as advertising with the help of well
endowed platform in order to provide effective service to the consumers has got enhanced. This
in turn has reduces the threat to entry by enhancing the loyalty of the client to the advertising
organizations.
Threat from substitutes
According to researchers, there exists no absolute substitutes for an advertise campaign.
Hence, it can be clearly understood that the threat of substitutes, when it comes to the
Advertising industry is low. However, with the advancement in technology, the trend of directly
influence the consumers through social media platforms possess the risk of lowering the revenue
of the mentioned industry. However, Thiel (2019) have pointed out that digital platforms like
Facebook, Instaram as well as Youtube can also be considered as major suppliers of online
adverse content creating organizations since the advertising organizations make purchase of their
platforms to advertise their products.
The Power of the Buyers
Considering the fact that the global Advertising industry is highly saturated and the
number of organizations establishing their business in the mentioned industry is increasing due
to low barrier to new entrances, the power of the consumers are high. One of the chief reasons
behind this is the prolonged relationship of the industry with static fee structure. Along with this,
consumers of the mentioned industry are large and hence demand concession (Sinclair 2019). A

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slightest dissatisfaction often leads to switching advertising companies since majority of them
offer similar services at similar price range. Along with this backward integration by the
consumers is not possible.
The Power of Suppliers
The power of the suppliers in the advertising industry of 2015 was high. The chief reason
behind this is that lack of supply compared to the high demand and lack of premium ad spaces.
Thus, the bargain powers of the suppliers are high since they possess a good number of options.
The product launches demand better integration with the suppliers (Hook 2017). The industry
demonstrates a limited number of environmental friendly advertisements like the biodegradable
posters. The scenario, possess the potential of weakening the power of the advertise industry for
negotiating When it comes to purchasing environmentally friendly resources foe advertisements.
Competitive Rivalry
As being discussed earlier, it can be clearly understood that due to high saturation of the
global advertising industry, the competition between the existing organizations are really high. In
order to build credibility as well as to ain competitive advantage, the organizations ensure high
stakes with each campaign (De Mooij 2018). A huge amount of the budget for advertises
campaigns are invested by organizations and high profile client are add to premium. Thus for
premium add the competition between the organizations are rare.
Attractiveness of the industry
In spite of the highly saturated market, it can be clearly understood that the young work
force is getting attracted towards the advertising industry due to its creative job profiles. Along

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with this, with the rise in competition in the other industries, organizations are considering
advertising their service and product to be the most impactful way of increasing product or
service awareness of the consumers and attract the same (Odih 2016). Thus with increasing
condition, the demand for creating workforce of the mentioned industry is also increasing. this
the chief attractiveness of the industry includes its creative job profile and economical growth.
Changes in the industry
The technological world is experiencing major changes and with technological
advancement the demand for advertising agencies is increasing with time. This in turn possesses
the potential to change a good number of global forces associated with it. The first global force
that will undergo changes includes the power of the suppliers. With the advancement in
technology, the popularity of social media platforms are increasing (Nizami and Prasad 2017).
Considering the fact that social media platforms like Facebook, Instagram and others possess the
potential to attract a good number of consumers within a limited amount of time (Roth-Cohen
2018). It can be clearly understood that that since social media platform possess the potential to
substitute suppliers, the power of suppliers are diminishing in the global advertising industry.
More and more organizations are appointing advertising organizations to create social media
campaigns instead of offline campaigns. For instance one of the most popular advertising
agencies like “Smartsites” have experienced enhancement in their revenue by 12 percent in 6
months due to increased number of online advertisements (Li 2016). This change is also helping
the organizations to retain valuable clients.
Another force that is expected to experience a major change includes the power of
substitutes. With the technological advancement, the word of mouth promotion has gained high

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attraction (Bhatia 2016). Organizations are appointing employees in order to directly promote
their staffs to the consumers though social media posts. Along with this, social media posts by
clients as well as product or service users are also grabbing attentions which in turn are resulting
in enhanced number of purchase (Abdullahi 2017). In such cases, the power of substitute will
enhance in the following years.
Conclusion
From the above discussion, it can be clearly understood that the current situation of the
global advertising industry allows the independence of high to medium organization to grab the
opportunity for contributed to creative as well as innovative consumer focused strategies. The
reputation of the traditional advertising industry has bulked up from other industries which in
turn have made it act as a symbol of competition as well as other stakeholders for interfering in
its capabilities, both financially as well as non-financially. With enhanced demand as well as
technological advancement, the mentioned industry is supposed to experience enhanced growth
in the following years.

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Reference list
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