An empirical examination of the evolving advertising and media markets: Using a triadic perspective to assess the relative importance of services diversity, network position, and the client portfolio

This study is motivated by the diversity of media vehicles that have recently become available and determines the relative importance of offering advertising services related to these media vehicles. It focuses on relationships among three kinds of firms: advertising agencies, their clients, and media companies. Specifically, this examination investigates individual advertising agencies' position as the "middleman" in providing advertising services to their clients and enabling their clients to buy media from media companies. The study asks two main questions: Does services diversity affect an agency's client portfolio and, in turn, does the client portfolio affect performance? Is this effect moderated by network position? A triadic perspective is used to examine the relative importance of services diversity, network position (centrality), and the client portfolio in driving agency performance. Based on archival data from the advertising industry, results suggest that it is relatively more important for advertising agencies to focus on managing the client portfolio and network position rather than services diversity to drive performance. Results are obtained using social networks analysis, partial least squares, ANOVA, and multiple regression.