© 2006 pearson education canada inc. 2.1 canadian advertising in action chapter 2 the advertising...

© 2006 Pearson Education Canada Inc. 2.1

Canadian Advertising in Action

Chapter 2

The Advertising Industry

© 2006 Pearson Education Canada Inc. 2.2

Learning Objectives

Identify organizations in ad industry Identify & describe advertising management systems Identify roles & responsibilities of clients Describe roles, responsibilities, & types of agencies Discuss relationships between clients & agencies Outline structure of agencies & functions of

personnel Identify key concepts in managing client’s business Identify methods of compensation for agencies

© 2006 Pearson Education Canada Inc. 2.3

Industry Participants

AdvertisersAdvertisers

• ACA

AgencyAgency

• ICA

• Production Firms

MediaMedia

• Broadcasters

• Print

• Out-of-Home

• Direct

• Internet

© 2006 Pearson Education Canada Inc. 2.4

Client Side Management

Brand and Category Management

Regional Management

Global Management

© 2006 Pearson Education Canada Inc. 2.5

Client Role and Responsibility

1. Ad planning and budgeting

2. Advertising coordination

3. Monitoring program implementation

4. Evaluation (effectiveness)

5. Liaison with agency

© 2006 Pearson Education Canada Inc. 2.6

Agency Role and Responsibility

1. Experience / expertise in

communications

2. Strategic planning assistance

3. Objectivity in preparing strategy

© 2006 Pearson Education Canada Inc. 2.7

Agency - Client Relationships

Key to business success depends on:

• A healthy and prosperous client-agency relationship

• A partnership that encourages open and honest communications

• Trust and respect for each other

© 2006 Pearson Education Canada Inc. 2.8

Account Shifting

Client-agency relationships sour for a variety of reasons:

Quality of ads or service provided

New communications demands not adequately served

Philosophical differences

Lack of team concept

Client consolidates advertising with fewer agencies

Conflict situations

© 2006 Pearson Education Canada Inc. 2.9

action item

• Read the ‘action’ item on page 44 of the text.

• Visit Marketing Magazine online and prepare to discuss other articles that comment on client-agency relations.

© 2006 Pearson Education Canada Inc. 2.10

Types of Ad Agencies

Services required by client determine the type of agency they work with.

• Full Service

• Creative Boutiques

• Media Buying Service

• Other Specialists: Direct and Interactive

© 2006 Pearson Education Canada Inc. 2.11

The Full Service Agency

FullService Agency

FullService Agency

• Account Management

• Creative

• Media

• Research

• Direct Response

• PR

© 2006 Pearson Education Canada Inc. 2.12

Functional Areas of the Ad Agency

Account Management

Account Management

CreativeDepartment

CreativeDepartment

MediaDepartment

MediaDepartment

Business & Marketing Orientation

Conceptual & Creative Orientation

Analytical & Strategic Orientation

© 2006 Pearson Education Canada Inc. 2.13

Account Management

Account Director

Account Director

Account SupervisorAccount

Supervisor

Account ExecutiveAccount Executive

© 2006 Pearson Education Canada Inc. 2.14

Creative Department

Creative Director

CopywriterArt

Director

Creative director oversees the team. Team develops creative concept.

© 2006 Pearson Education Canada Inc. 2.15

Media Department

Media department plans media strategy & places messages with media. A media director heads up the department.

• Media Planner

• Media Buyer

• Media Supervisor

© 2006 Pearson Education Canada Inc. 2.16

Managing the Client’s Business

1. Agency Teams

• Account Exec / Supervisor

• Art Director / Copywriter

• Media Planner / Media Buyer

2. Competing Accounts

3. Agency of Record

© 2006 Pearson Education Canada Inc. 2.17

The Creative Boutique

Creative BoutiqueCreative Boutique

• Specialist

• Creative concept development (message ideas)

• Staffed by ex-FSA personnel

© 2006 Pearson Education Canada Inc. 2.18

Media Buying Service

MediaBuying Service

MediaBuying Service

• Media Planning

• Media Buying

• Media Research

© 2006 Pearson Education Canada Inc. 2.19

The Agency of Record

Media

Agency B(AOR)

Client

Agency CAgency A

Flow of creative informationFlow of media information

© 2006 Pearson Education Canada Inc. 2.20

Agency Compensation

Commissions:

• Standard Commission Rate (15%)

• Reduced Rate Commissions

© 2006 Pearson Education Canada Inc. 2.21

Agency Compensation

Fee System:

• Minimum Guarantees

• Hourly Rates

• Costs Plus Profit

© 2006 Pearson Education Canada Inc. 2.22

Agency Compensation

Payment by Results:

• Usually a reduced rate percentage plus incentives for achieving goals

• Typical goals may be brand market share, advertising effectiveness and advertising recall