The purpose of this activity is to get a full understanding of the what you are getting into when starting your own business. by understanding the current business climate in your industry you are better prepared for success as a newcomer.
Industry Analysis and Trends-
The advertising industry is experiencing a “rough patch” to say the very least according to the sources I used in my research. More and more businesses are shying away from advertising agencies and working with in house hires to create the means to communicate their product or service with the outside world aka potential clients. It seems from what I have read that big ad agencies all seem to face the same problem of losing site of the goals they went in with, creating innovative solutions for brand to be seen, and instead focusing on repetitive banner creation and following trends that already exist. In other words, they are stopping creatives from creating. While it may seem ridiculous for this to happen, it does make sense as to why it is occurring, the bills must be paid. Just like in Pavlov’s experiments, classical conditioning is occurring with ad agency executives. When the business began, the excitement of innovation and creativity mimicked the watering mouth of the dogs upon the arrival of food just like it does for so many other creative entering the workforce. Over time though, agency executives have began to associate repetitive junk (banner ads, following trends until their death, and other mundane work) with profit, since those are the easiest ways to get paid by clients. While it is a business at the end of the day, these practices are driving creatives away to work on their own or for the companies that once looked to ad agencies for innovation.
Since I would like to continue working with small businesses, my company has a promising spot in the advertising market. After looking at what is happening in advertising, I believe my best course would be to stay focused on start up clients and small businesses rather than focused on the “whales” like Coca-Cola or Wal-Mart or any other giant corporation. From what I have seen, those types of clients (large corporations) often want what they want and that is it leaving creativity on the part of my business out of the mixture. I am not in this industry solely for the money, I am in it because I enjoy coming up with new things or ideas rather than running an assembly line from pre molded designs.
The biggest barriers to entry would have to be other agencies, and like I mentioned earlier, businesses relying more on in-house hires over outside work. One thing I have noticed as I was searching for work in the design industry is that there are way more people searching for a job as a “creative” than there are jobs. With the work I found before I got a job in design I met a large number of those that had been searching for design jobs and just taken what they could until they did. What this means, in my opinion, is that the competition for winning a job bid is immense and not to be taken lightly. So many people I have come across work a “regular” nine to five job and do freelance work on the side, that as soon as a potential client begins their search for a designer they are flooded with possibilities. Speaking from my own experience, freelancers will often give clients exactly what they ask for in hopes of building a name for themselves rather than stand up and giving the client any push back to create higher quality longer lasting work. If a client can get what they envisioned no matter how ridiculous it may seem from a freelancer why would they go to a professional organization and have to face the fact that they are/could be wrong? People like to hear their own thoughts in someone else’s voice; it is just a fact of life with the large majority of people, if they can find someone to make that happen then that is where they will go. What I am saying is that the biggest barrier will be to convince clients that their idea is wrong (assuming it is) and that they somehow came up with the alternative my team or I presents them with.
As far as long-term opportunities, I believe that technology determines that. The current trend of wearable tech (apple watch, Google glass, etc.) will play a big part of advertising in the future. With this tech being new right now this provides a long term opportunity for my business to learn and understand it now so as to gain an advantage on other businesses (those that transition slowly or those that will start later) in utilizing those tools.
Target Market –
My business will be entering the creative market and more specifically advertising. This is a market full of those that focus more on helping others reach a target audience rather than sharing their own product. My target audience will be small businesses that have a product or products that they want to be seen.
Digital advertising and broadband were the fastest growing segments in 2013, increasing 18.5 percent and 12.8 percent, respectively, followed by videogames at 9.9 percent. Both digital advertising and broadband are entirely digital and video games are largely digital, while out-of-home advertising—at 5.1 percent, the only other segment to grow by more than 5 percent in 2013—is benefiting from the expanding footprint of digital boards (Global media report 2014 McKinsey & Co.). What this states is that advertising and marketing is moving away from print and sprinting towards the digital world. The advertising industry/market is experiencing an increase in growth in recent years from emerging markets according to http://www.plunketreasearch.com also goes on to state that “Advertisers large and small have made the Internet a very significant part of their advertising strategies. eMarketer forecast $58.6 billion in U.S. online ad spending for 2015 (including online and mobile platforms), up from $37.3 billion for 2012. Online advertising spending in 2015, at $145 billion, will account, for 27% of all ad media spending worldwide.” (https://www.plunkettresearch.com/industries/advertising-branding-industry-market-research/). While growth in the advertising market is not as significant as it has been in the past, there is substantial room for more players to join the game successfully.
The advantages my business has with its target market are simple, I am a small business that can give personal attention to all of my clients, my business size matches my clients allowing for bonding over common hardships that occur, and I can, do, and will back up my work with research into the consumer psyche and how each element I include effects them. One thing I have noticed with past clients is that if they feel as if they are heard and important then they trust you and your work. As a small business I am able to give them the interaction they want and need that allows them to trust in my capabilities as a designer and to know that what I do is in the best interest of both of our companies.
The Competition –
As in my video earlier this week, three competitors in my local area are BigEye, evok, and Red Rocket advertising. These companies all offer the same services I do to potential clients. These organizations offer services in branding, logo creation, advertising, public relations, copy, event hosting, and social media. While I do not currently offer service in all of these areas, I will expand to include these and more in the future. I understand I am to break down what each company offers individually, but they all offer the exact same services according to their websites and resources I have accessed in the past (when I was looking for work) and now. The only difference between the three that they offer are stylistic, which is to be expected since they each have a different set minds creating for them. It is because I have a smaller focus area that I hold an advantage over my competition. Since I focus on a more specific output I am able to hone my skills and offer a more personalized output to my clients. As I said, I will be expanding in the future, but I plan to separate different groups to different company titles. By this I mean that I will have a logo and branding company (My Mac and I Design), then a television and web video advertising company (no name yet but something that focuses on video), then I will have a print media company that just works on print ads. All of these companies will fall under my ownership but will be separate when viewed by the public to instill a sense of security in clients that the specific type of media they need is being handled by a business meant to do exactly that.
Global Media Report 2014 – McKinsey & Company