Ad Agencies’ Strategic Plan to Combat the Internet Crisis: A Study of Their Deliberations and Actions

Abstract

By disrupting their business model and their approach to advertising, the Internet has created a crisis for ad agencies. While changes in communication technologies continue to affect agencies, they do not necessarily pose a threat. The most serious threats come from media companies and audiences. Using content analysis, the study attempts to provide insights into the strategic planning process used by ad agencies. The Internet has transformed the industry by making precision and accuracy in audience targeting possible, but it has also intensified the competition ad agencies face from newcomers. The highest competitive threat comes from niches that specialize in social media, and not from advertisers who do their own ads in-house. The study suggests, having successfully embraced digital advertising, agencies are at a crossroad. They can choose to specialize in niches such as social media and/or opt to broaden their market by becoming a one-stop shop for all other marketing services.