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Economic Analysis: Theory and Practice
 

Developing a business model and internal reports as a way for advertising businesses to adapt to recession

Vol. 20, Iss. 1, JANUARY 2021

Received: 24 December 2020

Received in revised form: 5 January 2021

Accepted: 13 January 2021

Available online: 28 January 2021

Subject Heading: BUSINESS PERFORMANCE

JEL Classification: M41

Pages: 107123

https://doi.org/10.24891/ea.20.1.107

Mariya A. VAKHRUSHINA Financial University under Government of Russian Federation, Moscow, Russian Federation
vakhrushina@mail.ru

https://orcid.org/0000-0003-3896-5345

Nadezhda E. GIRYA OOO Greycom Group, Moscow, Russian Federation
nadezhda_girya@mail.ru

https://orcid.org/0000-0003-4964-5486

Subject. The advertising business in Russia is characterized by high level of competition. Many areas of advertising activities showed a negative trend even before the start of the COVID-19 pandemic. In such unfavorable conditions, solutions to problems associated with the development of adequate business models of advertising agencies, become especially relevant.
Objectives. Our aim is to underpin the need for transforming the business models of advertising agencies as a way of their survival in the face of future recession. Our working hypothesis is that under crisis conditions, organizations that continue to develop their business model tend to survive.
Methods. The study employs general scientific methods, like comparison, deduction, analysis, synthesis.
Results. We updated the definitions of business model, optimal business model, internal reporting, disclosed relationship between them. Based on foreign and domestic experience of advertising business functioning in conditions of the global financial and economic crisis of 20142015 and existing approaches to building business models, we offered an integrated business model. We also developed a form of management consolidated report, which reflects the specifics of advertising agencies. The recommended business model for an integrated group of companies and the adapted form of management consolidated report will provide the top management with integrated information about the total operating activities of agencies and enable adequate economic decisions.
Conclusions. To address the threats of the looming crisis, companies should continue to develop their business model and improve in-house management reporting.

Keywords: advertising activities, business model, management accounting, internal reporting, integrated report

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