Television advertising prices have risen moderately in response to demand growth resulting from increases in corporate profit and total advertising expenditure
Los Angeles, CA (PRWEB) April 20, 2015
The television advertising market has a buyer power score of 3.4 out of 5, signifying that buyers and suppliers have a nearly equal amount of leverage during negotiations. According to BISIWorld analyst Kayley Freshman-Caffrey, product specialization, market share concentration, the recent price trend and price volatility are the primary factors that influence buyer power.
High product specialization characterizes this market. Buyers that hope to advertise on television channels must work with the supplier operating that channel; for example, if a buyer wishes to advertise during the CBS program Big Bang Theory, they must work directly with CBS or a CBS affiliate. As a result, high product specialization limits the ability of buyers to leverage the availability of other suppliers during negotiations, hurting buyers' ability to obtain favorable pricing terms, continues Freshman-Caffrey. Medium market concentration also reduces buyer negotiation power. Suppliers of television advertising include Time Warner Inc., 21st Century Fox and NBCUniversal Media LLC. The top suppliers in the market hold a significant amount of market share, which means market competition impacts them less than other suppliers. Consequently, they have less of an incentive to offer competitive prices, therefore constricting buyer power.
However, the recent price trend has benefited buyers. Prices have risen marginally during the past three years due primarily to demand growth. Because demand has a strong impact on the price environment, volatility in demand drivers underscores the volatility of television advertising prices. Volatility has been low for key demand drivers of television advertising, which indicates that prices have been stable during the period. Thus, buyers have been able to more accurately budget for purchases. Overall, the positive effects of the recent price trend and price volatility have balanced the negative impacts of high product specialization and medium market share concentration to give buyers a moderate amount of negotiation power. For more information, visit IBISWorld’s Television Advertising procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of television advertising, which refers to a segment of television programming during which a commercial produced and paid for by an organization is aired. Television advertising promotes a variety of goods, services and ideas and can be acquired from media conglomerates, multichannel video programming distributors and independent television stations. This report does not cover advertising in other forms of media or the production of television advertisements.
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.