Here is a PESTEL analysis highlighting the main issues surrounding the advertising industry, influencing the way the industry operates whether in a positive or negative manner.
Economic Factors – seeing recently coming out of the recession has caused increase in prices. This had a major impact on the advertising industry as companies start to cut down on spendings, advertising seems to be the easiest and first to be reduced by the financial departments. Although this may have seemed like a wise move but instead must have caused drops in sales as this creates a gap between the consumer and brand. Thus, reducing costs of advertising may have also caused reduction in sales and potential new consumers. Although, this may have been seen as a good thing it has caused a strain to the advertising industry as companies tend to demand more for cheaper and when advertising agencies fail to deliver companies turn to in house advertising where the company produces their own advertisement at a lower budget. Social Factors- Due to the rise of constant use of social media, it is found that companies turn to social media to advertise their content alternatively to traditional advertising such as TV, out of home (OOH) print press etc. due to its major impact and very little cost. Social media has become the most powerful tool and the most powerful platform used by many to speak their opinion freely. Companies do not only gain recognition through the content they provide on social networking sites to interact with consumers but also gain consumers via word of mouth, which in my opinion is the most powerful advertising tool. Social media is used for celebrity endorsement…which I have fallen to buy a product through a couple of times, I must admit. Sponsorship and many advertisements featuring celebrities, role models, activists, singers, actors and so on, this is used by companies to build a positive brand image via the positive impact these celebrities have on fans, this is considered as green washing. Torin Douglas MBE visited Buckinghamshire New University earlier this year giving an inspirational talk on social media. He said “social media encourages communication and interaction between companies and viewers, as it allows companies to publish what content and information they choose, whether it be to promote the company or just interaction” (2015). Social media is also used as a platform for customer service where consumers can interact with the company directly, bringing about positive or negative views. Many examples of campaigns that use social media to reach a certain audience can be found in other blog posts. Technology factors- has had a huge impact in society, whether socially, academically or professionally. It has become part of our everyday lives. However, technology has its perks and flaws. Starting with its advantages would be that it is ten times more likely to reach consumers than it did before technology. Having technology increases the chances of targeting a wide range of audience as there are plenty of platforms and media to choose from. As well as the ability to track and analyse those who are watching and engaging with brands. And even when traditional advertising such as OOH was thought to go extinct in the next few years, technology can help revitalise OOH with digital OOH and personalised billboards where it delivers relevant messages to the right target audience at the right time. However, this is not always a good thing, this is because the more technology the more competitive it gets to grab an audience’s attention, its no longer an AIDA Model case, it’s much more complex than that. The human race has become fully reliant on technology and referring to ‘turning intelligence into magic’ blog post you’ll find a campaign that elaborates on this generations cyber world that is destroying us socially as well as mentally. Technology is taking over rapidly, and before we know it they will be taking our jobs too. It has become everywhere! Whether on mobile and tablet etc. It has become the norm in society, it is all what the younger generation know, in fact below is an interesting but light hearted ad campaign about the new generation being born into technology- quite literally. |
Future Kids ;)
Posted by Jaan & Arya on Thursday, May 28, 2015
Also, check this article out- it’s a must read: http://thebitchwhocodes.com/2013/10/18/from-traditional-to-digital-the-modern-creative-director/
Legal Factors- In terms of legal, as we are now in a post privacy era (Refer to blog ‘the use of marketing communication in a post privacy era for more insight) consumers are more concerned about their online activities than they were a few years back. This is due to cookies and big data (which is explained in more depth in ‘the use of marketing communication in a post privacy era), regulations were put in place to prevent concerns online users may have. Websites are now obliged to inform online users that they are using cookies for data collecting purposes. This may cause further issues due to consumers feeling unsafe online preventing them from purchasing online and companies missing out on important data that may help improve consumer’s shopping experience online, however consumers feel as though they are being watched, refer to the use of marketing communication in a post privacy era for more in depth insights.