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Advertising agencies industry external analysis

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on 13 October 2013

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Transcript of Advertising agencies industry external analysis

Advertising agencies industry external analysis
I - The macro environment of advertising agencies
A- PESTEL
II - The advertising agency industry
III - The competition
Conclusion
Summary
Introduction

I - The macro environment of advertising agencies
A - PESTEL
B - Key drivers for change

II - The advertising agencies industry
A - The (5+1) Porter forces / key success factors
B - The industry life cycle

III - The competition
A- Strategic group
B - Strategic costumer

Conclusion : Opportunities and threats
Introduction

Different actors of the communication industry :
- Announcers
- Advertising agencies
- Media agencies
Economic crises decrease in advertising spending by 1.3 %
- 4.4 % for the traditional ads
+ 5.3 % for the internet
Evolution of the advertising spending by medias
Internet is the way that companies use the most
Press is becoming less used by companies
Opportunities

Digital Expansion
New communications supports
(cell phone, search, tablet, internet)
New technologies
New advertising space in airport
Dynamic of the ads is emerging
countries
Sponsoring
Lack of economic visibility
High competition with the big
agency
New incoming
Limited advertising space
Decline of the written press
Some ads can't be used in all countries because of social respect (religion aspect, ethic aspect ...)
Threats
B - Key Driver for change
A - 5+1 Porter forces / Key success factors
A - Strategic group
B - Strategic customer
Our strategic customer is : announcer
About 200 000 announcer in the French market
They have the most influence for the goods purchased
It's announcers who decided to buy the ads and to ask for a campaign
They care about price, quality and reliability

So, ads agency care more about their strategic customer needs than the final one (people who look at the ad)
B - The Industry Life Cycle
Late Growth :
Increasing rivalry
Profitability declining
Risk moderate
Big companies monopolize the market and prevent little companies to growth
> Publicis market share : 36 %
> Havas market share : 28 %
Possibility for the famous company to lunch subsidiaries with low price
Economic crisis : has an impact on ads' market because companies invest less in communication

High Competition : it's a saturated market
Consumer's life style changes : Ads agencies has to analyze the new life style
Technology in expansion : so many new support of communication
Written press decrease : try to use less written press because people start to read newspaper in digital version
Pression with the laws : agencies has to be careful with reglemation and need to adapt ads to the law
Key success factors
Improve customer loyalty > Competitive Rivalry
Improve brand image > Competitive Rivalry
Technologies' Protection > Threat of new entrants / Competitive Rivalry
Improve quality and price ratio > Bargaining Power of Buyers
Innovation capacity > Threat of new entrants / Competitive Rivalry
Thank you for your attention !

DARDEAU Elizabeth
BADAOUI Chrystelle
Problematic
How to analyze advertising agencies' environment ?
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Sources
- "Exploring strategy" Management book

- The Wikipedia page for "advertising agencies"

- Website of UDA (Union des Annonceurs)

- Website of AACC (Association Agences COonseils en Communication)

- Press articles from newspapers like LeMonde or Le Figaro
Positive
Negative
Positive
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Negative
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Negative
Attractiveness of the market because of innovation and evolution of the ways to advertize
Scary market because of the competition and the leaders
Prospect of development
Digital expansion and new support of communication : improve innovation and expansion of the little companies with more patents
New advertising space in airport : news way to advertize for the international market
Emerging markets : new advertising spaces, new target, new lifestyle of people
Possibility to create a new sort of advertising agencies > Strategic groups
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