Future of U.S. Advertising Agencies
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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
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really knows what this means, what it will entail, how it will work, and how advertisers will make it their own. Advertisers in general have been charged with being slow to rise to the challenges of the new media landscape, and critics blame the lack of apparent enthusiasm on the fact that the new interactive services do not yet fit the mold of commissionable media and so do not make easy economic sense. Other critics raise the issue of whether advertising agencies will be needed at all in an environment in which sellers can communicate directly with buyers, thus bypassing middlemen altogether.
Adrienne Ward Fawcett discusses the interactive universe and notes that more and more consumers know what the term means and are even making use of interactive services. Advertising Age conducted a survey of 1,000 U.S. adults and found that 31.4 percent were aware of the term "interactive media," up from 19.1 percent the previous year. The concept is more familiar to men than women, and more to the young than to the old. It is also more recognizable to those who are wealthier. However, marketers have not done much to convince consumers that advertising has a place in interactive media, and only 29.1 percent said that interactive se
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Approximate Word count = 2277
Approximate Pages = 9 (250 words per page)
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