Samples Economics Industry Forecasting: The Advertising Industry

Industry Forecasting: The Advertising Industry

1109 words 4 page(s)

Political Environment
Online advertising has an interesting political environment because of opposition is some political circles (Burkhalter, 2012). The opposition is due to the explicit nature of some of the advertisement and the ability of the internet to allow unlimited access to material regardless of the age of the viewer. In addition, the government controls the content of advertisements to ensure accurate representation of products and avoid misleading the clients. Certain materials, such as alcoholic drinks, are restricted in the scope of advertisement and they are not allowed to be visible to school going children.

Economic Environment
Inflation and changes the marketing systems because it pushes products out of the reach of certain groups. For example, advertising housing to the low-income earners is not practical because these people cannot afford the inflated prices of housing (Burkhalter, 2012). Changing marketing structures also affect the advertisement industry. For example, the globalization of products affects the nature of advertisement because of the need to appeal to a global audience. For this reason, advertisements for products such as coca-cola are designed for specific regions or to have a global outreach.

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Social Environment
Social trends produce the biggest influence in the advertisement industry. The primary objective is to compel the society to adapt a specific outlook that favors the purchasing of a certain product (Burkhalter, 2012). In this regard, where the society demands a certain medium of advertisement, the advertisement platforms have to change to accumulate the changes. For example, the increasing usage of smart phones and internet presence of most people has compelled adaptation of digital advertisement platforms. The changing position of women in the society also affects the nature of the advertisements because they have to reflect the ideal interactions between members of the society. The advertisement industry has to adapt to changes in social values to ensure the correct context is applied and increase the allure of a product. recently ,the emergence of endorsements as a critical advertisement platform is a function of the appeal of certain lifestyles to the society and the prominence of certain people, such as celebrities.

Technological Environment
There have been rapid advances in the field of technology (Burkhalter, 2012). New mediums such as social media and the web 2.0 services have allowed an increased scope of the advertisement industry. In applications of web 2.0, the advertisements are able to use the feedback of clients to appeal to further portions. At the same time, the technological advancement has reduced the barriers of space by allowing advertisements that are not limited by geographical locations. Recently, there has been a trend of migration from the traditional forms of advertisement such as newspaper ads to digital platforms facilitated by social media platforms such as Facebook.

Environmental Environment
The recent theme of environmental conservation affects all industries (Burkhalter, 2012). Adhering to the trend of conservation appeals to the society and creates an appeal to the product. Therefore, advertisements use environmental appeals and emphasize on the environmental considerations of the products to increase appeal to the society and serve the purpose of advertisement. The advertisement industry has no direct effect on the environment, but the nature of the advertised products sometimes cause concern. Therefore, the relevance of conservation affects the advertisement industry indirectly and creates an incentive for the advertisers to include environmentally friendly features of the products.

Legal Environment
The political environment and the legislation determine the legal environment (Burkhalter, 2012). Where a country adapts a specific stance, the reflections on the law affect the advertisement industry. For example, in the US, there is an emphasis on true representation of the product. Where the product is misrepresented and clients buy the product based on the wrong advertisement, the advertising firm faces possible legal action. Copyright laws are also an important consideration because trademarks and are intellectual property and all advertisements have to consider potential usage of registered trademarks as violations of the copyright laws. The laws managing the nature of the product also affect the advertisement industry because of the correlation between advertisement and product. if a product is not to be marketed in a specific area or to a specific group, such as restrictions of alcohol to children, then advertisements are supposed to avoid targeting the groups or face legal action.

Strengths and Weaknesses
The advancement in technology is the greatest strength of the industry because it results in new opportunities on the digital media. The opportunities on digital media facilitate the development of specific advertisement tools, targeting specific sections of the population that is likely to purchase the product.
The greatest weakness is the reliance on social factors because social forces change from society to society. Therefore, it is hard to have global adverts due to cultural differences from place to place. The legal and political environments also limit the ability of the advertising industry to appeal to the targeted groups. Despite the relevance of the controls, they inhibit the ability of the adverts to appeal to the masses.

Opportunities for Growth
There are many opportunities in the advertisement industry (Anderson & Sweeney, 2014). Recently, advertisement giants have designed computer programs that predict personal choices and thus recommend product that client is likely to enjoy in the future (Anderson & Sweeney, 2014). In online marketing, the tool is used by advertising Giants such as Google and Amazon to recommend products to the buyers. A recent trend has seen an increase in recommendations based on past choices. For example, Netflix recommends television shows and music based on past choices and the preferences of people making similar choices. Therefore, in the next few years, there is the possibility of the advertisement industry growing to monitoring preferences of users based on credit card purchases and recommending the products through text message (Anderson & Sweeney, 2014).

The advertisement industry also has the potential to grow to include profiles of all buyers and using the profiles to advertise products to a specific group (Braun & Latham, 2013). This advertisement method is growing because of the increasing usage of technology and the interconnection between different platforms. For example, Google accounts track web searches, activity on social media such as Google-plus and all other activities connected to Google such as video access on YouTube (Braun & Latham, 2013). The emergence of the android operating system in the smart phones has increased the accessibility of user characteristics and thus enlarged the scope of advertisement. In the future, profiles may be used in advertisement to recommend specific products that the client would like.

    References
  • Anderson, D., & Sweeney, D. (2014). Statistics for business and economics (2nd ed.). St. Paul: West Pub.
  • Braun, M., & Latham, S. (2013). Mastering strategy: Workshops for business success. The Jurnal of Research in Learning Technology.
  • Burkhalter, J. (2012). Maximizing commerce and marketing strategies through micro-blogging. Rutledge.

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