The Digital Transformation of the Advertising Industry

This thesis is primarily based on a case study on how the Internet affects the advertising industry in Oslo, Norway, and on how the digitization of advertising adds to our understanding of the geography of innovation and urban and regional development. The study argues that the Internet fundamentally changes and challenges the advertising industry, and that advertising merges into market communication and even user experience and product development. The interactive nature of the Internet and its parallel social and commercial worlds contribute to transcend the role of a traditional medium and to coalescence between production and consumption. Despite the fact that those involved in online and traditional advertising are located close to each other in Oslo, the extent of collective learning, knowledge externalities and innovation has been scarce. The study shows that the creative destruction of this industrial sector is ignited by actors outside the traditional advertising industry. Due to path dependency along one-way mass communication media incumbents within the advertising industry have left room for new actors, such as web agencies and technology consultants, to explore and take market share in online market communication services. The reconfiguration of market communication is regarded as the result of an industry mutation across advertising and ICT, and creates a need for bridging skills and competencies across creative, strategic and interactive domains…


1 Introduction
1.1 Aims and objectives
1.2 Research questions
1.3 Why is it interesting to study the advertising industry?
1.4 Structure of the thesis
2 Theoretical underpinnings and conceptual framework
2.1 Agglomeration theory
2.1.1 Localisation economies
2.1.2 Urbanisation economies
2.2 Innovation theory
2.2.1 Innovation systems
2.2.2 The consumer and later trends in innovation studies
2.3 Bridging agglomeration and innovation
3 The creative and digital economy
3.1 The Norwegian advertising market
3.2 Advertising and the Internet
3.3 Convergence of ICT and the rise of web 2.0
4 Research design and method
4.1 Epistemological and methodological underpinnings
4.2 Description of the data collection
4.2.1 Qualitative data
4.2.2 Selection criteria
4.2.3 Interviews
4.2.4 Quantitative data
4.2.5 Data collection for the study on the creative class
4.3 Reflections on the method applied
4.3.1 Pilot study
4.3.2 Interviewees
4.3.3 The economic context for the study
4.3.4 Delimitation of the study
4.3.5 Challenges and insights
4.3.6 Reliability and validity
5 Findings from the study on the digitization of the advertising industry
5.1 The Internet grows as an advertising channel
5.2 New activities emerge outside existing companies
5.3 The Internet changes the DNA of advertising
5.3.1 Interactivity, dialogue and engagement
5.3.2 Implications for the core product of advertising
5.3.3 New conditions for corporate organization
5.3.4 Production and consumption merge online
5.4 Institutional set-up of the local advertising industry
5.5 Innovation cycles of specialization and diversity
6 Broadening the perspective: Drivers of regional development
7 Concluding discussion
7.1 Summing up
7.2 Destructive creativity
7.3 The rise of the amateur class
7.4 Enabling creative destruction
7.5 Future research
8 References
9 Appendix
9.1 Glossary
9.2 Interview guide
9.3 List of informants
9.4 Co-author declaration
9.5 Definition of Oslo labour market region
9.6 Relevant websites in Internet-based advertising

Author: Bugge, Markus M

Source: Uppsala University Library

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