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With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


Custom Business Plan
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans
Are Updated for 2017

Advertising Agency SWOT Analysis

 

Strengths

 

Advertising agencies' services are always in demand as small, medium, and large scale businesses always needs to reach potential customers. These companies consist of one of the world's oldest industries. There are a number of ways that an advertising agency generates revenues. First, they are able to charge significant fees (that carry high gross margins) from the development of advertising campaigns for their clients. These fees are typically recurring once a contract is developed. Second, many advertising agencies often act as media buyers for the companies that they represent. These fees are often generated on a commission basis when developed advertisements are placed with content producers. For companies that have very large clients, this can be a substantial revenue center (if not the largest income producing segment of the business). The barriers to entry for a new advertising agency or marketing firm are relatively low. A new business, provided that the owner has the proper connections, can usually be started for as little as $25,000.

 

Weaknesses

 

Primarily, the weaknesses faced by advertising agencies is that their revenues are heavily subject to fluctuation based on how the economy is doing. In times of economic duress, some companies substantially reduce their advertising expenditures. It should be noted that some companies (especially consumable goods) tend to increase their advertising efforts in order to boost sales as individuals are not purchasing big ticket items. The other weakness faced by advertising agencies is that, given their low barriers to entry, there are a number of companies within this market. It is very difficult to establish a new advertising agency unless the owner has a substantial amount of contacts within the field.

 

Opportunities

 

With the rapid expansion of the internet, there are tremendous opportunities for advertising agencies to operate in a digital marketing capacity. The online advertising industry generates more than $80 billion per year. Additionally, many smaller companies now have extensive presences on the internet and demand high impact advertising and social media marketing services. It is imperative that an advertising agency develop services specific for online marketing.

 

Threats

 

Beyond competitive and economic issues, there are no known threats to the operations of an advertising agency. These companies must remain on the edge of the technology curve at all times in order to compete on a global level.

 


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