Research Paper: Is Digital Advertising a Blot or a Benefit?

Pages: 8 (2766 words)  ·  Bibliography Sources: 3  ·  Level: College Junior  ·  Topic: Business - Advertising  ·  Buy This Paper

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[. . .] In concert with the actual purchase behavior, 61% of the Nielsen survey respondents reported using the Internet to conduct research for grocery shopping ("Peapod," 2012).

The external threat implied by the rampant increases in Internet use for an ever-increasing array of purposes is a serious one for businesses like CBS Outdoor and other enterprises that rely on digital connectivity and broadband infrastructure. A contest is currently underway for privileged transmission of data on the Internet. Private companies are vying for competitive advantage that lets them offer faster and improved transmission of data, including the highly popular streaming, to their customers for a premium price.

It is safe to assume that few consumers will elect to have inferior access to the Internet and poorer usability online, which means that lines will continue to be drawn by enterprises and competition will continue to rev up. Businesses that provide servers to companies relying on the Internet will increasingly be at the forefront in this contest. The enterprises that control the servers will have to negotiate with energy companies that can -- and most likely will -- command increasingly higher prices to supply the energy to enable the servers that conduct the data transmissions that businesses and consumers demand.

Most Promising Opportunity

CBS Outdoor is just beginning to plumb one of its most promising opportunities: Elevate the overall creative product in order to enhance across the board perception of the medium. CBS Outdoor is approaching this opportunity by working with small and medium-size advertisers who typically do not have relationships with or access to professional designers or advertising agencies. Through a free service, advertisers can submit their current print advertisement or some other asset via the website for an expert review by CBS Outdoor Out-of-Home creative staff ("CBS Outdoor press," 2014).

This manner of creating street-worthy displays enables reworking of ads by CBS Outdoor expert creatives within 72 hours ("CBS Outdoor press," 2014). Local advertisers are helped to create more effective Out-of-Home advertisements and avoid the pitfall of the uninitiated: replicating traditional print ads in digital form -- a practice that turns out to be very bad form, resulting in hard-to-read and cluttered displays ("CBS Outdoor press," 2014). CBS Outdoor is capitalizing on their capacity to create quickly perceived and understood content that has a memorable impact on viewers of the ads.

The subtext of this creative move is to engage the burgeoning corpus of small businesses in advertising early in the creative process. As the economy shifts in response to the aftershocks of the financial crisis that continue to be felt more than a half decade later, the paid media consumer base is shifting in concert. More small business and start-ups are being created and there is a definitive opportunity for CBS Outdoor to engage in these small -- to-medium enterprises (SMEs) in advertising campaigns for consumers who are on the move in vehicles or on foot. Jodi Senese, CBS Outdoor chief marketing officer, points to a clear advantage of seizing this opportunity, "New advertisers are continually looking toward the medium, and we want to offer creative guidance at the earliest possible moment. The website provides an opportunity for that 'early conversation" ("CBS Outdoor press," 2014).

Strategy to Maximize Strengths and Minimize Weaknesses

A key strength of CBS Outdoor is its active engagement in a number of recycling and sustainability efforts. At present, most of their green activities are directed at post-consumer and post-manufacturing waste. CBS Outdoor is driving the change from use of PVC in the Out-of-Home advertising industry to PE (polyethylene). PVC materials that are replaced during the transition receive special handling to enable processing or repurposing. PE materials are recycled, and many vinyl products are re-made into other products or are repurposed. CBS Outdoor is also a proponent of public transit and clean air bus franchises. CBS Outdoor is partnering with public transit agencies to utilize the potential of these public services for advertising placement. Clearly, CBS is well positioned to pursue or make use of more advanced technology that results in ever-greener business operations. In addition to their eco-orientation, CBS is likely to develop or consume technology that moves them closer to sustainable practices.

The greatest weakness that CBS Outdoor must face, particularly as it continues to press full bore into the multi-media digital ads arena, is that of safety. A study of electronic billboards and traffic safety commissioned by the Federal Highway Administration and due to be completed and distributed in 2009, remains behind closed doors, unfinished, and the subject of contentious attention from environmentalists, safety experts, legislators, special interest lobbyists, and the digital advertising companies (FairWarning, 2012). As digital billboard companies aggressively place digital signs on U.S. highways and municipal byways, many argue that the eye-catching displays divert drivers' attention to a degree that is unsafe (FairWarning, 2012). Under the Freedom of Information Act, FairWarning has learned that the study was apparently botched, producing results that are such outliers that they don't pass the straight face test (FairWarning, 2012). FairWarning gained access to hundreds of pages of records and agency emails that clearly signal the "political and financial stakes, as well as industry efforts to influence public opinion" (FairWarning, 2012). Given that states can rule separately on the placement and use of digital billboards, CBS Outdoors would do well to address the issue strategically by working with the Federal Highway Administration to ensure an accurate and honest assessment of the safety of highway digital signage is conducted.

Resources, Capabilities, And Core Competencies

CBS Outdoor has developed a range of consumer resources that add substantively to the company's offerings. For instance, there is an outdoor advertising locator, and a performance tool that lets ad agencies and media buyers track the performance of their campaigns. CBS Outdoor advertising connects products and consumers. A core competency of CBS Outdoor is its ability to offer outdoor advertising campaigns to a client's consumers in a direct, effective, and powerful manner. A second core competency is that CBS Outdoor has been able to create offerings that make them the most diversified Out-of-Home media provider in the Americas. CBS Outdoor Americas Inc. shows a market cap (intraday) of $4.14 billion, a profit margin of 10.13%, and an EBITDA (ttm)6 of $377.20 million.

Value Chain Analysis

CBS Outdoor is able to reach millions of commuters on a daily basis. The potential impact that the company could have on consumer behavior and the environment is enormous. With that potential comes a level of responsibility that CBS Outdoor has not yet met, nor does it appear that altruistic endeavors are anywhere on the radar screen fro CBS Outdoor, particularly given its recent IPO. Referencing Value Chain in CBS Outdoor's business processes, the primary areas in which product excellence, operations excellence, and customer excellence can be executed appear to be in the functions of research and development and the design of products, services, or processes (Hansen & Birkinshaw, 2007).

References

Hitt, M.A., Ireland, R.D., & Hoskisson, R.E. (2013). Strategic management: Concept and cases: Competiveness and globalization (10th ed.). Mason, OH: South-Western Cengage Learning.

Levin, M. (2012, February). Was study of digital billboard safety botched? Fair Warning. NBC News. Retrieved http://investigations.nbcnews.com/_news/2012/02/14/10400036-was-study-of-digital-billboard-safety-botched

Ross Sorkin, A. (2014). CBS Outdoor in $690 million deal for advertising assets. Dealbook. The New York Times. Retreived http://dealbook.nytimes.com/2014/07/21/cbs-outdoor-in-690-million-deal-for-outdoor-advertising-assets/?emc=edit_dlbkpm_20140721&nl=business&nlid=54745473

Hansen, M.T. And Birkinshaw, J. (2007, June). The innovation value chain. The Harvard Business Review. Retreived http://hbr.org/2007/06/the-innovation-value-chain/ar/1… [END OF PREVIEW]

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Is Digital Advertising a Blot or a Benefit?.  (2014, July 22).  Retrieved March 24, 2019, from https://www.essaytown.com/subjects/paper/digital-advertising-blot-benefit/4597193

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"Is Digital Advertising a Blot or a Benefit?."  Essaytown.com.  July 22, 2014.  Accessed March 24, 2019.
https://www.essaytown.com/subjects/paper/digital-advertising-blot-benefit/4597193.