The number of businesses and total advertising expenditure are expected to continue rising over the next three years, accompanied by improved business sentiment.
Los Angeles, California (PRWEB) January 25, 2014
Transit advertising services have a buyer power score of 3.5 out of 5.0. The higher the score, the more leverage a buyer has during the negotiation process. This score signifies that buyers in the transit advertising market have a medium level of power. According to IBISWorld procurement analyst Kayley Freshman-Caffrey, “Buyer power is influenced by high market share concentration, significant switching costs, the availability of substitutes and low product specialization.”
Because only one firm per transit system provides transit advertising, buyers have limited choice in finding a supplier that best suits their needs. “While transit agencies compose the majority of suppliers, big advertising agencies own most of the market share, which further limits a buyer's options,” says Freshman-Caffrey. Additionally, because transit systems are serviced by only one transit advertising supplier, it is difficult for buyers to switch between suppliers without losing access to the advertising space they had previously occupied. Any buyer that is planning on advertising in a certain market will be stuck with whatever supplier services that market, which reduces buyer power. Major transit advertising services suppliers include CBS Corporation, CC Media Holdings Inc. and JCDecaux SA.
However, substitutes to transit advertising are available, which widens the buyer's scope of possibilities. If a buyer is not satisfied with the transit advertising supplier that handles their target market, they may be able to instead purchase a different type of advertising in that market, such as billboard advertising or internet advertising. Even if a buyer is committed to purchasing transit advertising, they can leverage the availability of substitutes during the negotiation process. A further impetus for buyer power is low product specialization. If a buyer is flexible about the markets in which they want to advertise, they can purchase transit advertising from any supplier and receive the same standardized service; the buyer does not need to seek out a niche supplier to satisfy their needs. This factor expands the range of suppliers from which a buyer can choose, which improves buyer power.
For more information, visit IBISWorld’s transit advertising services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of transit advertising services. Transit advertising refers to promotional messages placed in key locations on or near buses, railways, subways and other modes of public transportation. This definition includes bus exteriors, bus interiors, bus wraps, platform displays, turnstiles, transit shelters, and rail and subway exteriors. Suppliers of transit advertising services include advertising agencies and transit agencies. This report does not include magazine advertising, newspaper advertising, coupon advertising or billboard advertising services.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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