III.

Importance of Advertising Services to Other Business Sectors Locally and Globally

Advertising is a significant economic force in the world.  Underlining the scale of advertising's

importance is the size of the expenditures.  Total world advertising expenditure in measured

media projected for 2001 is $494.1 billion or an increase of 6.2% growth from the 2000 level.

Added to this is an estimated $741.2 billion in non measured media, for a total global disposable

of $1,235.3 trillion.

Advertising is a powerful catalyst for competition, promoting the entry of new firms, new

products and new services.  Advertising raises capital, creates jobs and spurs production.

It launches new products, provides consumer information and furthers competition, thereby

lowering consumer prices.  It increases government revenues since jobs produce taxable income,

and more sales increase the sales tax base.  When advertising stops, information stops.  The

ability to introduce new and improved products stops, marketplace prices increase, and

competitive market shares freeze.

Advertising is the foundation and financial support of a free press.  Advertising revenues

significantly offset the cost of newspapers, magazines, cable, satellite and broadcast services.

Moreover, in many countries, advertising completely underwrites radio and television broadcast

programming.  These media, along with the Internet could not exist freely without the support of

advertising.  Advertising is also an important source of information for consumers.  Without

advertising, how will consumers know about insurance rate reduction opportunities, discounts

for product purchases and specials that will save them money?  Without advertising, would

drivers understand the benefits of seat belts?  Without advertising, would consumers only have

access to one magazine as opposed to several?  Without advertising, would we see the diverse

array of specialty magazines providing information to consumers on hobbies, fashion, sports,

world events, and a host of other topics?

IV.

Differences in Advertising Sector:  Pre  and Post Uruguay Round

The advertising industry has evolved greatly since completion of the Uruguay Round of trade

negotiations because of technological advancements, innovative marketing techniques and the

advent and expansion of new media outlets such as pay TV and the Internet and their use as

commercial communications vehicles.  In addition, advertisers, advertising agencies and media

companies are seeking to maintain their competitiveness by expanding globally, through both

growth and consolidation to offer new services and value to their customers.

One of the most fundamental changes has been the advent of the Internet.  The Internet has

essentially changed the way people interact with the world around them.  Going forward, the

implications for marketers are countless as this new medium simultaneously offers challenges

and opportunities.  At its essence, marketing is about excelling at identifying and meeting

consumer requirements.   The Internet, by giving the ultimate control to the consumer on when

and where to shop, makes it even more imperative for marketers to fully understand and meet the

needs of an increasingly discerning consumer. At the same time, the Internet enables the

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