Prices will grow marginally in response to growing demand
Los Angeles, CA (PRWEB) May 09, 2014
The market for media placement and fulfillment services has a buyer power score of 3.3 out of 5, indicating a medium level of buyer power. High vendor specialization and high switching costs for buyers that have worked with a particular supplier in the past hamper buyer power. However, according to IBISWorld procurement analyst Kayley Freshman-Caffrey, “the negative effects of these factors are tempered by a favorable pricing environment for buyers.”
Because media placement and fulfillment services are labor-intensive and solutions are customized to each buyer, suppliers are highly specialized. As a result, buyers may be compelled to work with a specific supplier if that supplier's competencies are most suited to the buyer's needs. “This reduces the ability of the buyer to leverage the availability of other suppliers during negotiations, which hurts buyer power,” says Freshman-Caffrey. Additionally, it is costly for buyers to switch between suppliers due to the relationship-based nature of the service. Some suppliers have monopolies on certain media spots, further impeding the switching process by preventing buyers from retaining particular media spots when considering another supplier.
However, buyer power is strengthened by the pricing environment for media placement and fulfillment services. Price volatility for these services is low, allowing buyers to predict prices and budget for expenses. Because price volatility is low, buyers do not need to enter a binding contract to lock-in prices. Prices are expected to remain relatively stable in the three years to 2016 to the benefit of buyers. Overall, buyers in the market are limited in their choice of supplier, but face favorable pricing conditions. Consequently, buyer power in the market is moderate. The top four vendors in the market are Omnicom Group, WPP, the Interpublic Group Of Companies, and Publicis Groupe.
For more information, visit IBISWorld’s Media Placement and Fulfillment procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of media placement and fulfillment services. Media placement and fulfillment service providers, also known as media buying agencies, research, negotiate and place orders for advertising time and space on behalf of a client. These services are provided primarily by media and advertising agencies. This report does not cover other agency services, such as advertising creation and production.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.