3. advtg and other agencies
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Organizing for Advertising and
Promotion:
The Role of Ad Agencies and Other
Marketing Communication
Organizations
Organizing for Advertising and
Promotion:
The Role of Ad Agencies and Other
Marketing Communication
Organizations
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Participants in the IMC Process
Advertiser or Client
Advertising Agency
Media Organizations
Marketing Communications Specialists
Direct Marketing Agencies
Sales Promotion Agencies
Interactive Agencies Public Relations Firms
Collateral Services
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Organizational Options For Clients
Centralized System
Advertising and promotion placed alongside other marketing
functions such as sales, research and product planning
Decentralized System
Separate marketing, sales, advertising and promotion
departments for various product lines or businesses of the
company. Often use product or brand management system
In-House Agencies
Advertising agency set up within the company and is owned andoperated internally
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Functions of An Advertising Manager
Planning and Budgeting
Administration and Execution
Coordination with other departments
Coordination with outside agencies andservices
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Client Organization For IMC
The Centralized SystemAdvantages
Better Communications
Fewer Personnel
Continuity of Staff
More top management input
Disadvantages Less Goal Involvement
Longer Response Time
Problems with multiple product lines
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Client Organization for IMC
The Decentralized SystemAdvantages
Concentrated Managerial Attention
Rapid Problem Response
Increased Flexibility
Advantages
Concentrated Managerial Attention
Rapid Problem Response
Increased Flexibility
Disadvantages
Ineffective Decision Making Internal Conflicts
Problems with fund allocation
Lack of Authority
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In-House Agencies
Advantages Cost savings
More control
Better coordination
Disadvantages Less experience
Less objectivity Less flexibility
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Full-Services Agencies
Full Range of Marketing,Communication and
Promotion services Planning, creating,
producing advertising
Performing research
Selecting and purchasingmedia
Non-Advertising Services
Strategic market planning
Sales promotion Internet and interactive
Public relations and publicity
Production of trade showmaterials
Package design
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Typical Full-Service Agency Organization
Writers
Art Directors
Traffic
TV
Produciton
Traffic
Print
Production
VP Creative
Services
Account
Executive
Account
Supervision
VP Account
Services
Media Research Sales
Promotion
VP Marketing
Services
Personnel Accounting Finance
Office
Management
VP Management
and Finance
President
Board of
Directors
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Agency Services
Account services The link between agency and client
Managed by the account executive
Marketing services Research department designs and executes
research programs
Media department analyzes, selects andcontracts media time and space
Creative services Creation and execution of ads
Copywriters, artists, other specialists
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Creative Boutiques
Provide only creative services
Other functions provided by the internal client
departments or outside agency such as media buying
service
Full-service agencies may subcontract with creative
boutiques
Agencies that specialize in thecreative process of advertising
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Media Buying Services
Specialize in analyzing and buying media, especially
broadcast time
Agencies and clients may develop media strategy
Media buying organizations implement the strategy and
buy time and space
Independent companies that specialize inthe planning and purchasing of media
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Agency Compensation
The Commission System Agency usually receives 15 percent Commissions are paid by the media Commission system is controversial
System is becoming less common Fee Arrangements
Fixed fee method Fee-commission method
Cost-Plus Agreements Incentive-Based Compensation
Percentage Charges
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Example of the Commission System
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AgencyEvaluation Process
Financial Audit focuses on how the agencyconducts its business and includes verification of
costs, expenses, number of personnel hours chargedto an account and payments to suppliers and media
Qualitative audit focuses on the agencysefforts in planning, developing, and
implementing the clients advertising andpromotion program and the results achieved
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Why Agencies Lose Clients
Poor performance Poor communication
Unrealistic demands
Personality conflicts
Personnel changes Changes in size
Conflict of interests
Changes in strategy
Declining sales Payment conflicts
Policy changes
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How Agencies Gain Clients
Referrals
Solicitations
Presentations Public Relations
Image and Reputation
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Direct Response Agencies
Services include:
Data Base Management
Direct Mail Programs
Research
Media Services
Creative
Production
Agencies that specialize in providingdirect marketing services to their clients
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Sales Promotion Specialists
Services include
Promotion Planning
Creative
Research
Design and Production
Contests/sweepstakes
Refunds and rebates
Sampling and incentive programs
Agencies that specialize in developing andadministering sales promotion programs
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Public Relations Firms
Strategy Development
Program Planning
Generating Publicity
Lobbying
Public Affairs
Image portrayal
Damage control
Firms that develop and implement programsto manage an organizations publicity, image
and affairs with consumers and publics
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Interactive Agencies
Services include:
Development of strategy for Internet and other interactivemarketing tools
Interactive Media Creation
Web sites
Web banner ads
Digitized content (audio, video, animation)
CD-ROMs
Kiosks
Agencies that specialize in the development andstrategic use of various interactive marketing tools
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Collateral Services
Marketing Research Firms
Package Design Firms
Video Production Companies
Photographers
Printers
Event Marketing Companies