On modeling the advertising-operations interface under asymmetric competition

Abstract

Sydney is Australia's advertising capital. Given the city's bustling, vibrant, and brash reputation, it seems obvious that the national advertising industry would reside in Sydney. However, the relationship between the city and the advertising industry stretches back to the earliest years of European settlement. Advertising helped propel commercial activity in Sydney, profiting handsomely from it in the process. While the city has left its mark on Australian advertising, the advertising industry has been no less active in shaping Sydney. In addition to illuminating the city's skyline and streetscape, advertising has also influenced the lives of all Sydneysiders-from suburban consumers to esteemed artists. Moreover, advertising has raised Sydney's international profile-as the must-see destination for tourists or as the backdrop for the latest blockbuster film. Commercial foundations Commercial activity has been integral to Sydney's growth. During the penal colony's fledgling years, local industry was largely agricultural, with the timber and brick industries emerging to service the settlement's infrastructure. Importers were therefore vital in transporting and distributing goods and wares to local retailers, manufacturers and consumers. While the settlement's initial size meant that word of mouth was the most common form of advertising, ongoing expansion demanded a more efficient means of publicising goods or services. Among the items brought out to the new settlement by the First Fleet was a screw-press for reproducing government orders. Seven years would elapse before a printer was found to operate it and produce Sydney's first outdoor advertisements. 1 The press was soon put to commercial use, as the city's theatrical promoters printed handbills for their latest performances. With performances changing regularly, they also pioneered the use of street frontage to advertise current and upcoming shows. The growth of Sydney's retail sector stimulated further outdoor advertising. To delineate themselves from their competitors, retailers adorned their shop frontages with signs advertising their names, wares and prices. A growing number employed sign-writers in order to convey a more professional image. Over time, brand names would also assume a more prominent role in these shopfront displays. The colony's first newspaper offered another solution. First published in 1803, the Sydney Gazette enabled commercial enterprises to speak directly to the entire colony through its advertising columns. Instantly lucrative, such columns established an interdependent relationship between local advertisers and the press. In subsequent issues, advertising material in the Sydney Gazette comprised almost two-thirds of each edition. 2 With land in abundant supply, auctioneers were first among local industries to dominate the advertising columns (laying, perhaps, the

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