Lecture notes
PESTLE for Advertising Industry
- Module
- Strategic Management
- Institution
- Aston University, Birmingham (Aston)
Pestle analysis for Advertising companies or agencies and further information
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Advertising is defined as any form of non-individual promotion and presentation of ideas, services orgoods by a recognized sponsor. It is termed as the practices and techniques that bring services,
products, opinion or causes to public notification for the aim of influencing the public to react in a
certain manner toward what is advertised.
PESTEL analysis of advertising industry with a key focus on
inflexion points, weak signals, and megatrends.
Political: Changing in political climate forms a good background for advertising. Currently, political
parties are paying attention more to the quality of ads and their reach. The advertising industry has
estimated to witness increased political interest, used by the political groups as a way to deliver their
ideas, thought end believes.
Economic: Advertising has been severely affected by the financial crunch.
During the economic crunch, advertising was the first to encounter a cut-down. Advertising is
perceived as an additional expense which can be loaded off, though this can be the ideal tool to link
the product with the customer easily. It was witnessed that during the recession, firms that invested
a lot in advertising attained a better ROI. The growth rate in WPP's organic overall sales is being held
back by the slow economy of the Euro region which still accounts for over 35 percent of the firm's
sales. A slowdown in developing markets, specifically China and Brazil, has also weighed.
Social:
- Population age describes the target division for the advertisement content as well as the medium of
advertisement. Those advertisements targeting kids need to be appropriate for a particular age group
which will contain higher impact. For advertisement targeting minor group, it's the advertiser's
responsibility to take care of the content that impact of the kid's imagination.
- Geographic distribution advertisements can be applied everywhere in all demographics. The
domestic sentiments, culture, should be incorporated in the advertisements.
- The increase in education level and income: The increase in people's income entails that the
population is able or is spending more on products that enhance their status symbol. They engage into
additional gadgets and are linked to the internet each minute. The advertising industry alters the
mode of reaching people through several display mediums and is targeting the segment with the
different category of advertisement. In modern day women are more self-sufficient and confident,
there is a need to amend the way advertisers used to appear at targeting ads for female consumers.
The advertisements that used to target homemakers may not be persuading in the present scenario.
- The advertisers must follow the social and ethical standards of the society in which the ads are being
displayed. Whenever social matters are violated, government moves in to take corrective actions to
what is fair and deceptive. With changes in social ethics and values, it's the advertisers that must
change their way to link with the society. Advertisement transforms the way individuals look towards
the society. It can transform the view to an avaricious society, where it will influence viewers towards
superfluous spending. Advertisers influence the people outside their shown product and form
unexpected cost to the society. Though advertisers can establish a leeway via the laws to display their
alcohol brand in rock shows, it is the advertiser's responsibility presently to form socially responsible
advertising.
Technological advancements: With an increase in Internet awareness and usage on many devices, the
advertising industry has to transform the way advertisements reach its customers. The increasing
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