The Definition Of “Advertising Market”
In a narrow, economic sense, the advertising market is a place where the supply and demand for advertising services, and where there is the cost. The advertising market is an independent sector of the economy, in which the interaction of subjects of the market – advertisers, advertisement producers, advertisement distributors and consumers of advertising.
In a broad sense, the advertising market is a social institution designed to provide public demand for advertising services. It is part of the social system and evolves with the evolution of the economic, social and cultural processes. Therefore, the concept of “advertising market” can also act as a category representing a broad system of economic, legal, socio-cultural relationship to emerge and develop between the actors of the market.
Terms Of The Advertising Market Functioning
Advertising activity at its core, this is primarily an economic phenomenon, which arises and develops in the framework of the general laws of the market economy. For the functioning of the advertising market requires a number of socio-economic conditions …
- Economic Freedom of the market subjects advertising – the right to dispose of to create products, set prices, to assign profits and so on.
- There is a requirement in advertising services and effective demand among the consumers of advertising services.
- The presence of advertising service providers, creating an offer.
- The presence of competition between manufacturers of advertising services.
- A well-developed market infrastructure.
- The presence of regulations and laws governing the relationship of market entities.
- Lack of state administrative control over the advertising activity and market participants.
The Main Functions Of The Advertising Market
The advertising market creates and regulates the relations between market participants on an economic basis. Economic relations between the subjects of the market are coordinated through a pricing mechanism that maintains the balance in the market between production and consumption, supply and demand. Acting as an economic regulator, the advertising market has the following main features …
- Brings together the interests of advertisers and of advertisements on an economic basis, based on the needs of advertising services, expressed in terms of demand.
- It helps to eliminate imbalances between supply and demand for advertising services and brings them into line with market needs.
- Inform market participants through the economic indicators of the economic processes taking place in the market.
- Creates conditions for the development of the advertising business, stimulating its effectiveness, identifies leaders – who knows better market conditions, who have lower costs and higher quality advertising services.
- It eliminates the deficit in advertising services and expands the possibilities of business entities.
Due to the process of development of both society and relationships associated with various aspects of the subjects of the market, the regulatory functions of the advertising market increasingly complex.
Economic Fundamentals Of The Advertising Market
In the economic system of the advertising market there is in unity with other markets and developing within the framework of the general laws of the market economy. On the advertising market, as well as in other markets, there are phenomena such as supply and demand for advertising services, costs and profits, market conditions, price, pricing, competition and so on.
The economic system of the modern advertising market operates on the principles of self-regulation. It performs the function of self-supply and demand for advertising services. The specific ratio of supply and demand is manifested market conditions, which develops and changes under the influence of numerous factors, including the scope and structure of the advertising market.
For the natural development of the advertising market is characterized by the balance of supply and demand, or a surplus of supply over demand, which should help lower prices for advertising services.
Supply and demand: The basic concepts of a market economy, which describe the behavior of buyers and sellers in the market system.
Demand: A form of expression of the need for advertising services, the intent of potential advertisers to buy advertising services in a certain place at a certain time and to a certain extent. This intention is combined with an advertiser to pay for advertising services.
The proposal: A set of advertising services to the advertising market. The direction and degree of change in the basic indicators of the advertising market, including supply and demand for advertising services, the level of their prices, their sales, indicating the market sellers activity and advertising services customers, form the concept of “advertising market conjuncture.”
Principles Of Classification Of The Advertising Market
The advertising market is a generic term that includes a diverse system of markets. Modern advertising market is a multi-level economic system. The classification is based on the advertising market as a system of different criteria can be laid. The advertising market can be classified as follows …
- On the territorial scope (global, national, regional, local);
- Advertising Industry (the market of TV advertising market of radio advertising, market advertising in the press, the market of outdoor advertising, the market of online advertising);
- On the function and purpose (the market of commercial advertising, the market of political advertising, the market of social advertising );
- Development dynamics (highly dynamic, banner and the shrinking demand);
- On the prospects for the development (and highly promising perspective of little promise and unpromising);
- The level of competition (perfect competition, the market of pure monopoly, monopolistic competition market, oligopoly market);
- According to the degree of monopolization (completely monopolized market, monopolized market, non-monopolized).
Territorial and Sectoral Classification Of The Advertising Market
The advertising market is localized within the territorial entities, the scope of which are different. The supply and demand for advertising services, forms of supply, terms of advertising agents functioning depend on the scale promotional activities, characteristics of the territory covered by a particular advertising market. Territorial criterion is very important, since testing the effect of certain territorial conditions, the advertising market gains space delineated within which it formed the main socio-economic characteristics.
According to the scale of activity and the territorial coverage of the advertising market can be classified as follows …
- The global advertising market: Covers promotional activities at the international level, in different countries and regions of the world.
- National advertising market: Covers the advertising activity on the scale of a single country.
- Regional advertising market: Covers promotional activities within a specific region.
- Local advertising market: Covers promotional activities within a specific region, city or town.
According to many experts, the advertising market should be divided into national and region. Regional market, in turn, it is advisable to divide the capital and other regional markets. The basis for the differentiation of the national advertising market is the geographical, economic and administrative division.
The advertising market is also a combination of several sectoral sub-markets, in particular …
- Market TV advertising.
- Market radio advertising.
- Market advertising in the press.
- The market of Internet advertising.
- The market of outdoor advertising.
- The market transit advertising.
Each submarket has a volume level of supply and demand, its pricing principles, its own specifics of advertising services, and other characteristics.
Advertising Types and Services
Advertising services is a paid advertiser process, including the organization of interaction between the customer service and its producer, to bring the process of information about the object of advertising in the form of promotional information, the process of organization and implementation of distribution of the advertising information.
Advertising services is the main object of relations of subjects of the advertising market, acting in the market as a commodity. The concept of “goods” includes not only physical objects but also services. In the commodity, market system is called everything that can satisfy a need and an object of exchange (purchase and sale) in the market.
Advertising services possess all the attributes of the products are created in the process of activity, accompanied by material, labor, financial costs, have use value. Advertising services are provided to individuals or organizations that, as a customer of advertising services, act on the advertising market as advertisers.
Advertising services is a synthesis of the material and non-material production. The intangible part services include full service and creativity (intellectual) of the advertising process. For materiel, include the entire manufacturing sector (production of advertising).
Modern advertising market requires a wide range of proposals and a set of advertising services, both specialized and complex, to meet the different requirements of advertisers. All advertising services can be divided into three types …
- Services for the design, planning and organization of advertising communication.
- Services in the production of promotional items.
- Services in placing advertising in its distribution.
These core services involve a wide range of additional services: market research, consumer behavior, competitors and media, printing and delivery of promotional products, consulting and auditing in the field of advertising, and others. Some of these services are often inseparable from the main.
The specialized include all types of advertising services, if they are provided to the customer-advertiser differentiated that is separate from other services, or in various combinations. It can be accommodation services, the development and execution of advertising products. The service in the field of advertising is the most widespread demand among advertisers in different categories, so this specialized service in the advertising market has the biggest offer.
Our customers advertisement producers offer accommodation services to a variety of media (media) to print (flyers, posters, brochures, catalogs, and so on); in transit (all types of vehicles); stationary (boards, panels, and so on); related to the media (newspapers, magazines, radio and television), as well as many others.
The specialized services include on creative (development of advertising texts, original models, scenarios, strategies and ideas) and performance (production) of advertising products. Integrated advertising services are considered development and implementation of an advertising campaign, which includes all the main types of advertising services.
The Level Of Demand and Supply Level For Advertising Services
In the process of interaction between the subjects of the advertising market generated supply, demand and price of advertising services and advertising space.
From a macroeconomic point of view, the demand covers advertising services in the scale of society. However, demand has always focused on a specific product or service and its level in different markets different. Therefore, in trade there is always a high demand for advertising services – the vast majority of advertising orders received by manufacturers and trading companies, which constantly are in need of large amounts of commercial advertising.
Therefore, from a microeconomic point of view, the demand is considered in relation to a particular market at a particular group of consumers. From this point of view, there are several types of markets in which there is a high demand for advertising services. These include, first of all, the market of consumer goods, which combines the demand for advertising goods and services of mass use.
Demand is a form of collision intentions systemically two market participants and only considered in conjunction with the offer. Therefore, in many respects it depends on the level of demand from the supply level. It is the ability and willingness of the advertisement offer your advertising services on the market for sale at a certain price and a certain quality. At the current advertising market, there is a high demand for high-quality advertising. From this perspective, the level of supply in the national advertising market still lags behind the level of demand, but at the same time increase the level of competition makes commercial producers to improve the quality of advertising services.
On the advertising market, as well as in other markets, the law of competition, according to which there is to improve the quality of advertising services, a decrease in their prices. As a result, the competition takes place with the objective process of displacement of the advertising market of substandard and expensive advertising services. To stay on the modern advertising market, the advertisement must constantly reduce the level of costs, and if they go beyond a certain market rules, its activities become uncompetitive.
Competitiveness of services expressed by a set of qualitative and cost characteristics that provide its benefits on the advertising market among similar services. The level of competitiveness of advertising services is strongly influenced by market factors such as the degree of satisfaction of the demand for specific advertising services, the capacity of the individual market segments, the presence and number of competitors, pricing policy. The greatest competitiveness, as a rule, have new items to the services rendered for the first time, meet the current demand or cause the emergence and development of the new requirements.
Advertising Market Infrastructure
Like other markets, the advertising market has its own infrastructure. As the infrastructure of the advertising market performs a set of different organizations contributing to the functioning of the advertising market as a whole.
The structure of the infrastructure of the advertising market consists of research, marketing, consulting organizations, studying the behavior of consumers, creative and production organization, the result of which is a promotional product, communication networks, media, and other means of dissemination of advertising information, goods and services market as a whole, the impact of ways to consumers and so on.
Their main task is providing the main subjects of the advertising market – especially advertisers and commercial producers, information on the state and prospects of development of the advertising market, its separate segments, to assist in determining the strategy of advertising campaigns, determining the methods of influence on consumer advertising for maximum efficiency.