The top 500 U.S.-based advertising agencies have faced difficult world economic conditions over the past four years. In 1993 their worldwide gross income was $14.5 billion, down by 0.4 percent from 1992 on billings of $103.7 billion. U.S. growth over the same period was the weakest since 1987, running at only 3.8 percent for $8.5 billion gross, based on billings of $65.1 billion. These challenging economic circumstances have led to agency layoffs and the closing of offices both domestically and internationally. These agencies face another problem with the development of a variety of "new media" that may not be driven by traditional advertising. This change could be a needed opportunity for advertising, however, assuming that advertisers can develop methods appropriate to this media and can overcome resistance to having advertising on different on-line services. In essence, American advertising agencies must face the question of what their future will be and how they will prepare for it.
The computer revolution took place rapidly over the last twenty years or so and is continuing today at an increasing pace. Computers are part of our lives in ways we often do not even notice, not only in the more obvious personal computers we use at home and the larger computers we may use in such places as banks and libraries, but also in computer technology that is found in home appliances such as television sets, coffee makers, microwave ovens, videocassette recorders, and hand calculators, not to mention toys and games. The arrival of the computer age was so rapid that we have not yet managed to cope with all the changes or with many of the consequences. Nearly every business in the United States will benefit from the computer revolution, but the degree to which they benefit will depend on how well they integrate their business activities with new technologies and make opportunities out of the changes taking place.
The future of ad...