Pest Analysis: Competitive Rivalry In The Advertising Industry

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The political condition on the case study has been increase in demand for advertising businesses. UK government has allocated a huge budget of $285m (approx. 3%) for advertising in 2012 just to advert services form the public sectors. From the political view, the government wish to influence the individual behavior of “don’t drink and drive” due to healthcare and educational for the public goodness.

Besides that, due to the implementation by government of using the advertising other group such as political/religious and non-profit organization also emphasised advertising to generate fund in order to acquire public issue awareness.


The advertising industry has revealed major development for the last two decades,
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TV and press) that normally spend costly compare to digital one. There were three types of existing companies competing each other; large-multi agency conglomerates (Omnicom and WPP), mid-sized and smaller boutique agencies, and specialist agencies (AKQA).
By doing some research, they able to provide and create the digital media to be more advance, like AQKA offer and diversify mix of web (e.g. internet advertising/marketing, search engine marketing, etc.)
Briefly, the modifications by those competitors (companies) to make them different to each other towards the digital media advertising provider to make intense rivalry and competitive advantage.
Bargaining Power of Buyer
Buyers attempt to search low-price with better/high quality of the products and services in this digital advertising industry. The buyers demand is huge where it come from big population countries such as BRIC countries, North Africa and Middle-East.
Furthermore, Government and private-sector, charities, political/religious groups, and non-profit organisations also presume as buyers as they also used digital advertising for their demanded products/services in generating fund. Whereas, traditional method of advertising used by consumer brand (e.g. Nike), B2B brand (IBM,

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