Strategic responses to market globalisation among advertising agencies

The advertising industry is undergoing major changes as markets and clients become more global. Using the integration-responsiveness framework and the transnational framework, it is apparent that advertising agencies have a high need to be simultaneously integrated and responsive. This paper reports on a series of depth interviews with international agency leaders intended to gain an assessment of both the extent to which their firms are responding to these important but conflicting needs and the appropriateness of the framework for understanding the strategic options available for ad agency management. The findings indicate that the agencies have tried to modify their strategies to accommodate both kinds of pressures. However, their success in this regard is questioned and other broader strategic concerns are considered.     

Client influence and advertising standardization: a survey of ad agencies

With increased globalization of markets, the standardization of products, services, and promotion activities has streamlined the work performed by advertising agencies. In this study, managing directors of Australian and US advertising agencies were questioned about the extent their clients influence agency functions and the degree of standardization used. It was found that copywriting was the main service offered and the clients usually have a major influence on their services. As for those that handle multi-country campaigns, older agencies tend to be more involved in international markets, and there was some degree of standardizing of campaigns and creative work.     

Online advertising disclaimers in unregulated markets: use of disclaimers by multinational and local companies in the Brazilian toy industry

ABSTRACT

Researchers have documented whether and how companies use advertising disclaimers in regulated markets. We complement the extant work by analysing a sample of 449 online toy advertisements targeting children in Brazil, a largely unregulated market. Results show that multinational corporations are more likely to include disclaimers in their online ads than local Brazilian companies. Further analyses reveal, however, that advertising disclaimers used by multinational subsidiaries have more distractors that reduce viewer comprehension. Our research contributes to the fields of advertising and institutional theory by being the first to document whether and how multinational subsidiaries use disclaimers in online ads targeting an unregulated market.     

Is there global inclusion of authors in the five leading advertising journals?

A question that has been raised in academia has to do with whether there is global inclusion of authors in publishing. While this issue has been explored in some areas in business and marketing it has generally not been investigated across 30 years of advertising research activity. This paper seeks to examine the global inclusion of authors in five advertising-focused journals. We found that, while there appears to be an increase in international publishing activity in advertising compared to data extrapolated from past studies, published advertising research still reveals a North American bias/domination. A failure to be globally inclusive may lead to an under-exploration of academic issues and perspectives, as important ‘non-US’ issues could possibly be ignored.     

Diffusion of account planning in Indian ad agencies

Account planning is recognised as a best practice in British and American advertising. Despite reports of its global growth, information on its use around the world is limited. This study focuses on account planning in India, a region of considerable importance to international advertisers and advertising agencies. Using a two-stage organisational innovation diffusion framework, it examines planning initiation and assimilation in the Indian ad industry. It also investigates the impact of organisational factors on its diffusion. Results from the web survey (154 respondents from 101 agencies) indicate that, while initiation is widely reported in India, planning assimilation in agency activities is limited. Size and global agency affiliation (structural variables) affect initiation; leadership commitment and agency innovativeness (managerial and cultural variables) impact both initiation and assimilation. Similarities and differences with account planning use in UK and US agencies are discussed.     

Market convergence and advertising standardization in the European Union

In this study, we draw on industrial organization and institutional research to explore the relationship between market convergence and standardization of advertising programs. We argue that environmental isomorphism, which maintains that the external market environment is a principal driver of firms’ institutional structures, places pressure on firms to adapt their organizational structures and strategies to changing institutional conditions. We propose that the convergence associated with European market integration will lead firms to emphasize three advertising strategies: creating a uniform brand image, appealing to cross-market segments, and increasing cost performance in advertising. Further, we hypothesize that these strategies will be associated with an overall tendency to standardize advertising strategy and execution. Results of a survey of managers of subsidiaries of Japanese and U.S. firms operating in the EU suggest that firms that believe the EU is converging are more likely to engage in these standardized advertising strategies. Additionally, our findings suggest that firms that seek to create a uniform brand image and appeal to cross-market segments are more likely to standardize their overall advertising programs. Finally, we find that firms’ desire to create a uniform brand image is a function of their goal of building brand equity, regardless of the level to which markets converge. We draw implications for research and practice regarding firm responses to market convergence.     

International diversity of authorship in advertising research

Although advertising is a global discipline, several of the world's regions remain under-represented in the leading advertising journals, with North American dominance of review boards and authorship in these journals. Introducing this special issue of the International Conference on Research in Advertising (ICORIA), this paper assesses the international diversity of authorship in advertising research by looking at the nationalities of author teams of articles published in the leading advertising journals over the last 10 years. Among advertising journals, international diversity of authorship is clearly greatest in the International Journal of Advertising (IJA), and the even greater international diversity of this ICORIA special issue highlights the Journal's international orientation. The fact that diversity of authorship also relates to article citations and therefore to research performance further emphasizes the need for more international diversity of authorship in advertising research.     

International advertising: Developmental and implementational issues

This paper reports on a study which investigated the international advertising practices of a sample of major advertising spending multinationals, and the rationales behind their policies. The objective was to obtain insights into the efficacy of international advertising standardization options. When the rationales behind the international advertising practices of the sampled companies were examined, it was found that the executives concerned brought a wide‐ranging agenda to the decision‐making process and that factors beyond the specific benefits of standardization influenced their policies. As regards their actual policies, the practice of some form of standardization was found to be widespread, but the practice of total standardization was rare. As such, the data indicate that standardization is a flexible option, with many possible variants, i.e. it can be adapted to circumstances and is not an either/or policy. The paper concludes that the focus on whether or not multinationals should practice international advertising is misplaced, if only because, just as at the local or national level, there will be good and bad international advertising. Accordingly, more emphasis should be placed on reviewing issues relating to how to improve the quality of international advertising campaigns.     

Joint Venture of Wholly-Own:

American advertising agencies have been rapidly expanding their operations abroad in recent decades. During this time, they have taken adtvantage of foreign experitise by acquiring local agencies or establishing joint venture arrangements. In other cases they have gone abraod by boldly setting up their own operations. This 15 agency - 344 subsidiary survey of agencies' abilities and performances shows that in general, wholly-owned subsidiaries have outperformed joint venture arrangements in terms of market rankings and total billings. While wholly-owned subsidiaries performed more multicountry campaigns, in terms of their operations, no differences were found concerning their service offerings of number of global campaigns performed.     

Characteristics and influences of multinational subsidiary entrepreneurial culture: The case of the advertising sector

This paper undertakes an exploratory study into the characteristics of entrepreneurial culture of the multinational subsidiary; and, into the associated influences and manifestations linked to multinational corporation (MNC) and environmental contexts. The theme of multinational subsidiary entrepreneurial culture is an unexplored theme in the literature, and has considerable research and managerial significance. This qualitative research is based on eight multinational subsidiaries in the advertising sector in the UK. The evidence suggests that the constituents of multinational subsidiary entrepreneurial culture include global vision, entrepreneurial orientation and entrepreneurial MNC network management. The related influences and manifestations refer to subsidiary autonomy, target market servicing and responsiveness to local environmental conditions. In addition, the findings show that while entrepreneurial behaviour was evident in all investigated subsidiaries, its locus varied significantly. Specifically, entrepreneurship in multinational subsidiaries can be subsidiary-, headquarters-, or jointly-driven.     

MNE executive insights into international advertising programme standardisation

The standardisation/adaptation debate in international advertising has been a key topic of discussion among practitioners and academics for over 40 years (Agarwal 1995). The purpose of this paper is to identify the factors that influence executive decisions to standardise or adapt as determined by experienced international marketing executives working for large multinational enterprises (MNEs). The investigation initially provides a review of existing literature about the constructs under investigation and then, through in-depth qualitative interviews, it aims to develop an understanding of the factors executives consider important in the standardisation/adaptation decision in order to develop their international advertising strategies. This paper suggests that recognition of the impact of competition, culture, education, marketing institution and consumer related determinants have increased in importance over the years, affecting decisions of advertising theme, creative expression and media mix. Of these, advertising theme is the easiest and most appropriately standardised theme, whereas, creative expression and media mix are most susceptible to adaptation as per the requirement of the MNEs. The paper concludes by highlighting managerial and academic implications.     

Humanistic Advertising

This article examines the recent ongoing consolidation processes of mega-agencies on the global level and the structure of the international advertising industry to illustrate the dominant power of these large transnational advertising agencies (TNAAs) from the political economic perspective. It discusses motivations behind TNAA expansion, analyses the market share of the world's top ten agencies over a thirty-year period from 1960 to 1989, and examines the current structure of some regional advertising markets, specifically Europe, Latin America and Asia. Findings reveal that the international expansion of TNAAs is motivated by market forces and that major TNAAs continue to perpetuate and dominate the global industry with leverage such as integrated networks, capital and research resources within the conglomerates. Implications of mega-merger movements and TNAA's dominance in the international industry are discussed.     

Hope across the seas: the role of emotions and risk propensity in medical tourism advertising

Rising US medical costs as well as more competition in the health care industry have led many Americans to pursue health care in foreign destinations. As a result, leading countries in medical tourism have begun launching international advertising campaigns. A growing trend in much of this advertising is the use of emotional appeals. The purpose of this research is to examine whether the use of emotional appeals by non-domestic health care providers contributes to more favourable evaluations of the target health care provider than rational appeals. Specifically, two experimental studies investigate the efficacy of advertisements that induce the emotion of hope to determine whether these advertisements increase trust perceptions and reduce perceived risk, given an individual's level of risk propensity. Implications for public policy makers and marketing managers who work in health care are discussed.     

The impact of the lost decade on advertising in Japan

This study describes the perceptions of Japanese advertising professionals regarding the evolution of advertising planning and execution over a three-decade period. Senior management and creatives from 18 of Japan’s top agencies participated in extensive in-person interviews to compare the traditional nature of Japanese advertising with that of the US, and to explore factors that may have caused a shift in the style of Japanese advertising since the 1980s ‘bubble economy’. A grounded theory approach was utilised as an interpretive methodology. The study finds that the dramatic recession experienced during Japan’s ‘lost decade’ indeed had a strong influence on the nature of Japanese advertising. Along with additional factors such as changes in the media landscape and the adoption of American-born audience measures, economic uncertainty during the 1990s pushed adverting agencies towards a more direct and persuasive selling approach. This trend contrasts sharply with a general societal shift from materialist to post-materialist values in Japan during this period.     

China myths and advertising agencies

One of the fastest growing sectors in China's transforming economy is advertising. Within the industry, large numbers of ‘advertising agencies’ are typically reported. This article charts growth in the industry and classifies agencies by type, in order to establish a more accurate understanding of agency numbers and growth. Advertising agencies are but one type of organization among the huge number of licensed ‘advertising practitioners’ in China, which are often erroneously referred to as agencies.     

The moderating effect of self-esteem on consumer responses to global positioning in advertising

The study investigates consumers' responses to global positioning in advertising from the perspective of self. It is suggested that consumers' attitudes toward the brand advertised through global positioning are influenced by their ideal selves and cosmopolitan orientations and these influences are moderated by one's self-esteem level. Study 1 shows that attitudes toward the globally positioned brand are more positive for those with ideal selves that are more congruent with personal traits associated with globally positioned brands, but only for those with high self-esteem. Interview results from study 2 suggest that low self-esteem informants make use of the global brands associated with ‘Western’ as a means of signaling their social selves in order to obtain social approval and that high self-esteem informants attend to ad content, whether the ad employs global or local positioning.     

跨国广告集团全球扩张模式的选择及其影响因素

本文运用对外直接投资理论和交易费用理论的相关原理，具体阐述了跨国广告集团全球市场扩张的经济动因，即跨国企业全球市场拓展和广告公司自身业务发展的双重需要。在此基础上，作者深度剖析了跨国广告集团全球扩张模式的三种主要模式及其选择不同模式的影响因素。文章最后重点分析了跨国广告集团在中国的市场扩张战略，以期为民族广告公司的可持续发展和国际化转型提供策略参考。     

The impact of online display advertising and paid search advertising relative to offline advertising on firm performance and firm value

This research examines the impact of online display advertising and paid search advertising relative to offline advertising on firm performance and firm value. Using proprietary data on annualized advertising expenditures for 1651 firms spanning seven years, we document that both display advertising and paid search advertising exhibit positive effects on firm performance (measured by sales) and firm value (measured by Tobin's q). Paid search advertising has a more positive effect on sales than offline advertising, consistent with paid search being closest to the actual purchase decision and having enhanced targeting abilities. Display advertising exhibits a relatively more positive effect on Tobin's q than offline advertising, consistent with its long-term effects. The findings suggest heterogeneous economic benefits across different types of advertising, with direct implications for managers in analyzing advertising effectiveness and external stakeholders in assessing firm performance.     

Investor sentiment and advertising expenditure

A strategic issue facing marketing managers is ‘how much and when’ to spend on advertising. We argue that investor sentiment in the stock market may influence advertising expenditure by affecting firms' ability to raise new funds. We show that during periods of low (high) investor sentiment, firms decrease (increase) their advertising expenditure, even though the effectiveness of advertising is greater (lower) during such periods. We also find that these results are stronger for financially constrained firms that rely more on external financing. Our findings suggest that marketing managers can improve the efficiency of their advertising expenditure by raising (reducing) it during periods of low (high) sentiment.     

Information content in TV advertising. Consumer policy implications of the growing supply of TV advertising in Europe

The growth of both national and transnational television and TV advertising in Europe raises many issues. One issue of high relevance to traditional consumer policy is, however, barely mentioned, namely the consequences for consumers of the growing quantity of international TV advertising and the consequences of a growth or introduction of TV advertising in general. The purpose of the study reported here is to contribute to an objective evaluation of TV advertising strictly from a consumer point of view. For this purpose the article analyses the information content of the commercials on the satellite channel “Sky Channel” and on the West German channel ZDF. The results of that study are supplemented with the results from a review of those relevant investigations into the information content of print and TV advertising which can be found in the international literature. This includes an attempt to make the studies comparable and a critique of the prevailing tradition in measuring “informativeness”. It is concluded that from a consumer point of view, TV advertising has limited value since information relevant for most purchasing decisions is not communicated to a degree that would seem to have any practical significance for consumers. Furthermore, the information content of print advertising appears to be clearly superior to that of TV advertising.