TV ad placement prices will continue upward in line with expanding corporate profit and advertising expenditure
Los Angeles, CA (PRWEB) April 10, 2015
Television ad placement services have a buyer power score of 3.3 out of 5, indicating that buyers have moderate leverage during negotiations but will also need to make some concessions. 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. As a result, different suppliers often come up with different ideas as to how to best serve the buyer's needs, and solutions are frequently customized for each buyer. “High product specialization hurts buyer power because it reduces the selection of suppliers from which a buyer can choose,” says IBISWorld research analyst Kayley Freshman-Caffrey. “If a buyer favors a particular solution, the buyer will have little choice but to go with the supplier that offers it.”
Buyer power is also hampered by high switching costs, adds Freshman-Caffrey. Because TV ad placement services involve a close relationship between the buyer and supplier, ending a relationship with one supplier in order to switch to another can affect the provision of these services. Switching between suppliers can also involve a fee for terminating the contract early. Current vendors include Interpublic Group of Companies, Omnicom Group Inc., Publicis Groupe and WPP PLC.
This market's favorable pricing environment, on the other hand, 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 services. Low price volatility also means buyers do not need to enter long-term contracts to lock in prices. 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 services, which 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
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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.