Television ad placement service prices have increased steadily as a result of demand growth stemming from a boost in corporate profit and total advertising expenditure
Los Angeles, CA (PRWEB) November 02, 2014
Television ad placement services have a buyer power score of 3.3 out of 5, which reflects moderate buyer power; buyers have some leverage during negotiations, but will need to make some concessions. According to IBISWorld analyst Kayley Freshman-Caffrey, the primary factors influencing buyer power are high product specialization, high switching costs and a favorable price environment.
High product specialization stems from TV ad placement services' heavy dependence on intellectual labor. The labor intensity of television ad placement services leads to customized solutions for each buyer because each supplier comes up with different ideas for how to serve the buyer's needs, continues Freshman-Caffrey. High product specialization hurts buyer power because it reduces the selection of suppliers from which a buyer can choose; if a buyer favors a particular solution, they will have little choice but to go with the supplier that offers it. Major suppliers in this market include Dentsu Inc., Omnicom Group Inc. and WPP PLC.
Buyer power is also hurt by high switching costs. Because TV ad placement services involve a close relationship between the buyer and supplier, switching suppliers can affect the provision of these services by ending the relationship between a buyer and their previous supplier. Switching between suppliers can involve a fee for terminating the contract early and can also result in uncertainty about the new supplier's performance. All of these factors limit a buyer's ability to switch to a new supplier if their current one is inadequate, thus, hurting buyer power.
Alternatively, a favorable pricing environment benefits buyer power. In particular, the low volatility of TV ad placement service prices benefits buyers by allowing them to accurately predict prices and budget for the cost of their services. Low price volatility also means buyers do not need to enter long-term contracts to lock in prices. Additionally, prices are forecast to remain stable from 2014 to 2017, which benefits buyers. The positive effects of the favorable pricing environment counteract the negative impacts of high product specialization and high switching costs, which results in an overall medium level of buyer power for TV ad placement services. For more information, visit IBISWorld’s Television Ad Placement Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of television ad placement. Television ad placement services include researching, negotiating and placing orders for television ad space and time. Advertising and media agencies are the primary suppliers of these services. This report does not cover the purchase of television advertising space, television advertisement production or placement services for other types of media.
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.