Economic growth mixed with reduced price increases for key inputs will lead to growth in prices.
Los Angeles, CA (PRWEB) May 22, 2014
Aerial advertising has a buyer power score of 3.4 out of 5. This strong score reflects a buyer's ability to negotiate lower prices, due largely to the high number of suppliers and standardized nature of aerial advertising. “However, recent demand growth and price increases for key inputs over the past three years have slightly reduced buyer negotiating power,” says IBISWorld business research analyst Jordan Weinstein.
The economic recovery following the 2008 recession fueled growth in consumer spending, which lead to growth in corporate profit and total advertising expenditure. These increases spurred demand growth for aerial advertising during the three years to 2013. “Aerial advertising has allowed companies to reach a massive audience through cost-effective means, leading to demand growth for the service,” says Weinstein. This growth has indirectly driven prices for aerial advertising up at a moderate rate. Additionally, the cost of aviation fuel has been volatile and increased significantly from 2010 to 2013, which resulted in price growth for aerial advertising during the period.
Fortunately for buyers, increased corporate profit and total advertising expenditure mixed with slower growth of input costs and intensifying competition will lead to slower growth over the next three years at an annualized rate of 3.0%. Despite overall price increases, aerial advertising is still one of the most cost effective advertising methods to reach a large potential audience. Furthermore, suppliers facing heavy pricing pressure from competition will limit price increases to appeal to buyers.
Price aside, the high competition and low market share concentration for the aerial advertising market, combined with low switching costs, further aids buyer power. The high number of suppliers magnifies such competition. IBISWorld estimates that there are over 1,900 aerial advertising suppliers throughout the country, providing buyers with a large number of capable suppliers to satisfy specific buyer needs and budget constraints. These conditions prove favorable for buyers of aerial advertising. Major vendors include Van Wagner Communications LLC, FlySigns Aerial Advertising, AirSign Aerial Advertising and Paramont Air Service. For more information, visit IBISWorld’s Aerial Advertising procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of aerial advertising. Aerial advertising is a large display is towed behind an aircraft over a geographic area. Suppliers providing these services assist buyers by designing large aerial displays and flying them in a specified location and during a particular time in order to reach a massive target audience.
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.