Advertising Agencies

Presented By:Prakhar Kumar PandeyRoll No. 16

Definition“An organization that provides a variety of advertising related services to clients seeking assistance in their advertising activities.”

- American Marketing Association

Full-service advertising agency engages in the planning and administration of advertising campaigns, including setting advertising objectives, developing advertising strategies, developing and producing the advertising messages, developing and executing media plans, and coordinating related activities such as sales promotion and public relations.

Limited-service advertising agency concentrates on one of the major advertising agency functions such as developing and producing advertising messages or media plans.

Primary Services

• Complete a marketing analysis• Develop an advertising plan• Prepare a creative strategy• Create advertising executions• Develop and implement a media plan• Handle billing and payments• Integrate other marketing communication

Functions

• Account management• Creative• Media planning and placement• Research

Organisational Structure

Print

Traffic

Production ProductionBroadcast Analysts

Other MarketingCommunications

Services[PR, etc.]

Asst. AccountExecutive

AccountExecutive

ManagementSupervisor

Account Mgmt.Director

Copy Spvr. &Copywriters

Art Supervisor& Art Directors

CreativeGroup:

AssociateCreativeDirector

CreativeExec CD

ResearchAssistants

ProjectManagers

ResearchDirector

MediaPlanner

MediaBuyer

MediaSupervisor

AssociateMedia

Director

Media Dept.Director

StrategyReview Board[ManagmentCommittee]

Office Management[Personnel,Accounting,Legal, etc.]

President[COO]

Board ofDirectors

[Chairman/CEO]

Account Management

• Responsible for understanding... – the client’s business– the client’s marketing needs– strategy development

• Representing client point of view within the agency

Creative Department Responsibility

The creative department is responsible for creating and producing the print and broadcast advertising

Strategy is key Good creative work is always guided by a creative strategy that sets forth goals to be accomplished and key message points to be relayed

Media Department

The media department has two main functions - planning and buying.

• The planning group handles more strategic marketing and media issues.

• The buying group handles media negotiations and implementation.

Research Department

• Interpret market environment – Gather and analyze research data. – Primary and secondary techniques.

• Determine consumer needs/perceptions– Understand problems.

• Advise how ads can meet strategic goals– Help find solutions.

Auxiliary agency functions

• Account planning• Strategy/creative review board• Office management– Human resources– Legal services– Accounting– Recruitment

3 ways agencies make money

• Commissions– Usually 15% of gross costs

• Fees– Usually based on negotiated hourly rate

• Incentives– Still relatively new and problematic– Usually based on performance goals

Agency Commission• Media commission system– 15% media commission

• Adjustable commission rates– Negotiate to match client budget

• Markups-production & service– Add a percentage markup to costs– 17.65% of net = 15% of gross

Types of fees

• Fixed fee (retainer)• Cost-plus fee• Performance fee• Commission

Incentives

• Get paid based on how well you do, not how much you bill

• In practice, difficult to implement• If client makes final decision (instead of agency),

how can agency be responsible for final results?• Results based on many factors, such as competitive

efforts, not just advertising

Thank You!