Economic Fluctuations And Changes Of Media Advertising Revenue: Comparative Study On Different Types Of Media

As one of the fresh troops of the tertiary industry, the advertising industry, from the momentof its budding, has attracted great attention from many scholars. For the research of advertising,there is a common phenomenon in all countries that, in the period of high-speed development ofadvertising, scholars are more concerned about the economical efficiency of it, which representsthe promoting and adjusting effects of advertising on macro economy. However, after accessinginto the period of stable development, as a standing army of the national industry, the advertisingwould be influenced by general economic environment naturally, especially in periods ofeconomic growth and recession, the impact on media advertising revenue would be more obvious.Inspired by these phenomena, scholars start to focus on the macroeconomic impact on theadvertising industry, and extend to all levels in the field of the research.In2008, it swept the world that the economic crisis of United States evolved from thesubprime mortgage crisis. In this economic crisis, the media industry of all nations was affectedmore or less. However, what’s interesting is that several reports indicated that the impact of thiseconomic crisis on different media of different countries is quite disparate. This truth made theresearch of the impact of economic fluctuations on advertising revenue become very attractive andsignificant. Therefore, on the basis of previous research, this article focuses on the analysis offinding the reason that different media would receive different adverting revenue under thebackground of economic fluctuations. After reviewing a lot of related literature, this articlesummarizes previous researching paths, theoretical hypotheses and conclusions, and based onmodel construction, hypothesis-based reasoning and empirical analysis of China’s actual data,examines the impact of economic fluctuations on media advertising revenue from the threedifferent perspectives of two levels, and analyzes the various reasons that arouse the phenomenon.In particular, except the compare of elasticity between the total GDP volume and the increasingand reducing share of media advertising revenue, this paper discusses two micro-perspectives thatthe internal reasons of media substitution and the external causes of advertising decisions ofenterprises; and the macro-level that the influence of industrial structure on different mediaadvertising revenues.In order to clarify factors of media substitution that influence media advertising revenues,this paper operates a step-wise analysis from two angles: media substitution of audience selectingand advertiser selecting, and tries to find the relationship between the two kinds of mediasubstitution. From the perspective of enterprise, this paper analyses the impact of the economicfluctuations in different stages been exerted on media as a whole and various media advertisingrevenues. From the perspective of industrial classification, this paper, by analyzing the degree ofthe influence of industry changes on GDP over the past25years, examines the effect of differentindustrial structures on various media advertising revenues.Specific to each section, the paper makes the following arrangements: part one is the introduction, the main part is divided into four chapters, and final part is the conclusion and issuesshould be discussed further.The introductory section outlines the relationship between economic fluctuations and mediaadvertising revenue, and reviews the literatures on this research field.Chapter one tests the relationship between changes of media advertising revenue andeconomic fluctuations, and initially establishes various emotional connections between changes ofmedia advertising revenue and economic fluctuations. Based on analyzing the literatures of theexisting relationship between economic fluctuations and the advertising industry, a study onChina’s advertising market is expended in this chapter. In addition, based on25years advertisingdata of China from1983to2007, this chapter attempts to discuss the impact of economicfluctuation on different media advertising revenues in China. In order to understand therelationship between changes of media advertising revenues and economic fluctuations in depth,two problems should be figured out: one is how economic fluctuation affects different mediaadvertising revenues; the second is reasons that cause the discrepancy. Therefore, the next threechapters analyze these reasons respectively, and in each chapter, China’s actual data were collectedand applied in the assumptions and empirical analyses from different perspectives.The focus of chapter two is media substitution in the context of economic fluctuations, thatthe analysis from micro perspective about the internal reasons of media. It tries to find the reasonsof the discrepancy of media advertising revenues from the view of media substitution. Combinedwith the data from China, this chapter calculates the proportional relationship of growth ratebetween a single media and media in general, reveals the possibility of media substitution inChina’s advertising market, and explains why the substitution would happen in the context ofeconomic fluctuations.Chapter three focuses on that, under the background of economic fluctuations, the effect ofdifferent advertising decisions on media advertising revenues, and correspondingly finds out howdifferent types of businesses, in the face of economic fluctuations, make promoting decision. Thischapter selects different types of enterprise, operates empirical study on the effects of economicfluctuations on their advertising decisions. This effect manifests what decisions of advertisingvolume and media choosing would be made by enterprises.The fourth chapter underlines the reason from macro perspective of industrial structure, thatthe influence of industrial structure on different media advertising revenues. This chapter analyzeshow do advertising decisions of different industries be affected by economic fluctuations, and theinfluence shows that enterprises in different industries would have various advertising decisionand choose different media.The last part is the conclusion of the paper. On one hand, it provides an overview of thefindings of this article, on the other hand, summarizes the shortcomings. Most important, itdiscusses the problems and goals should be paid attentions in future for the in-depth exploration ofsimilar studies.On the whole, this article attempts to dig out the relationship between economic fluctuationsand changes of media advertising revenue from both macro and micro perspectives. This paperindicates a large number of theories and works on the relationship between media advertising revenues and economic fluctuation, the media substitution, enterprise advertising decisions, andthe industrial structure. After that, based on the collected data of Chinese advertising, it builds upmodels and deduces assumptions. This paper not only analyzes the reasons why economicfluctuation would exert effect on media advertising revenues from the macro level, but alsodiscusses the reasons from diverse micro angles, such as alternating changes of annual growth ofadvertising revenues for different media, advertising decisions of different enterprises, variousadvertising preferences, industry structure, as well as the changing rate of share of GDP fordifferent industries. This study attempts to get innovations in the following areas:1. Currently, most results of academic researches are established on the data from developedcountries, such as British and America, or compare the situations in different OECD countries.Few scholars of Western pay close attention to China’s actual situation, while the researches ofChinese scholars often present a talk in generalities lacking of empirical researches on advertisingdata. This study is based on25years of annual advertising data in China, and analyzes the impactof economic fluctuation on media advertising revenues from both theoretical and empiricaldimensions. Thus, from the perspective of comprehensiveness, it can be regarded as an innovation.2. Existing researches only focus on the phenomenon in the period of economic growth ofrecession, however, the collected data of this paper spans25year, which includes at least a fulleconomic cycle covering recession, trough, recovery, and crest. Beside, the entire troughs andcrests in the selected period are discussed in detail. Therefore, from the view of completeness, itcan also be considered to be an innovation.3. This paper explains why economic fluctuation would cause changes of different mediaadvertising revenue from two micro perspectives, which makes up for one-way discussion aboutmacro issues and lacking of deep analyses from micro-perspective.4. This paper analyzes the influence of the industrial structure and its adjustment on mediaadvertising revenues, which brings a new breakthrough in the field, and the research oncharacteristics and preferences of industry subdivisions in industries will be the most valuabledirection of the field.5. The model parameters, which reflect the actual estimates of the different mediaadvertising revenues in China, and provide possibilities of taking advantage of existing actual datato make predictions, are estimated and calibrated in this paper detailedly.