chapter 3
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Chapter 3. Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communications Organizations. Last Class. Role of IMC in marketing Segmentation Positioning Competitive Advantage Pull vs push strategies. Objectives. - PowerPoint PPT PresentationTRANSCRIPT
Chapter 3
Organizing for Advertising and Promotion:The Role of Ad Agencies and Other Marketing Communications Organizations
Last Class
Role of IMC in marketing
Segmentation
Positioning
Competitive Advantage
Pull vs push strategies
Objectives
To understand how firms organize advertising and IMC
To examine methods for selecting, compensating and evaluating Ad Agencies
To explain the role of specialized marketing communications organizations
The Worldwide Advertising Industry
Global expenditures $425 billionIn the UK £19 billion in 2006
Participants in the IMC Process
Marketing Communications Specialist Organization
Media Organizations
Advertiser (Client)
Advertising Agency
Collateral Services
Direct Response Agencies
Sales Promotion Agencies
Interactive Agencies
Public Relations
Firms
The Advertising Industry...Advertisers (clients)
advertise themselves & their productsAdvertising agencies
plan, create, prepare client’s ad campaignsSuppliers
photographers, illustrators, printers, video production houses, color film separators, etc.
Media companies selling electronic & print media
Top 10 Advertisers in U.S.
Rank CompanyAd SpendingGeneral Motors $ 4,040,000,000
Proctor & Gamble $ 2,611,700,000Phillip Morris $ 2,201,600,000Pfizer $ 2,142,400,000AT&T $ 1,950,900,000DaimlerChrysler $ 1,804,100,000Ford Motor Company $ 1,639,800,000Sears Roebuck $ 1,505,200,000PepsiCo $ 1,315,700,000Verizon Communications $ 1,312,700,000
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2002 Top 10 Multinational Advertisers (Ad Age Global Marketing Report Nov 10, 2003) 1. Procter & Gamble Co. US$4,479 million
2. Unilever. US$3,315 million
3. General Motors Corp. US$ 3,218 million
4. Toyota Motor Corp. US$2,405 million
5. Ford Motor Co. US$2,387 million
6. Time Warner. US$2349 million
7. Daimler Chrysler. US$1,800 million
8. L'Oreal. US$1,683 million
9. Nestle SA. US$1,547 million
10. Sony Corp. US$1,513 million
Global Advertising
Standardized
Localized
Global brands Efficiency / Recognition
Based on differences in each country or culture Relevance / Understanding
Most companies blend strategies to fit their unique situations
Local Advertising…
Businesses in a particular city or county targeting customers in that geographic area (50% of all advertising $ are local)
Focus
Time
Resources
Local vs. National Advertisers
National Local
Long-term Short-term
$$$$ $Many Specialists Few Generalists
Building the Brand Place of BusinessMarket Share Sales
Strategy TacticsMarkets Customers
The _____ is an outside firm that specializes in the creation, production, and/or placement of the communications message and that may provide other marketing and promotions related services
Top Ten World Advertising Agencies
Source: http://www.adage.com/international/world_brands, February 12, 2002.
McCann-Erickson Worldwide 58 1348DDB Worldwide 40 721Grey Advertising 45 700Ogilvy & Mather Worldwide 33 672EURO RSCG Worldwide 29 651J.Walter Thompson Co. 27 627BBDO Worldwide 32 597Y & R Advertising 27 517Publicis Communication 23 512D’Arcy Masius Benton & Bowles 21 452
Agency Markets Clients
What Do Advertising Agencies Provide?
Account services
Marketing services
Creative services Media Planning and Buying Traffic Management
FewerPersonnel
BetterCommunications
ContinuityOf Staff
LongerResponse Time
Less GoalInvolvement
BetterCommunications
FewerPersonnel
ContinuityOf Staff
Less GoalInvolvement
LongerResponse Time
Pros & Cons of Centralization
TheCentralized
System
+ Positive+ Positive - Negative- Negative
Can’t DoMultiple Product
Lines
Competition for Resources
Competition for Resources
Lack of Experience
in IMC
Lack of Experience
in IMC
Rapid ProblemResponse
ConcentratedAttention
IncreasedFlexibilityIncreasedFlexibility
Rapid ProblemResponse
ConcentratedAttention
Pros & Cons of Decentralization
TheDecentralized
System
+ Positive+ Positive - Negative- Negative
Lack ofAuthority
MoreControl
CostSavings
BetterCoordination
LessObjectivity
LessExperience
LessObjectivity
LessExperience
BetterCoordination
MoreControl
CostSavings
Pros & Cons of In-House Agencies
TheIn-houseAgency
+ Positive+ Positive - Negative- Negative
LessFlexibility
Most No Fear advertising is done by their in-house agency
+
Cannes Lions Live Advertising Awards Type Of Advertisement: Newspaper
Category: Entertainment & LeisureTitle: PERISCOPE Advertiser: LEGO Product or Service: LEGO CONSTRUCTION BLOCKS Entrant Company: FCB JOHANNESBURGCountry: SOUTH AFRICAAdvertising Agency: FCB JOHANNESBURG Country: SOUTH AFRICA Creative Director: Brett Morris Copywriter: Lance Vining Art Director: Lance Vining/Charles Foley Photographer: Gerard Turnely Typographer: Lance Vining Account Supervisor: Joanne Donald Advertiser's Supervisor: Gavin Mansour
“1984”
More than a good TV commercial
A new way of thinking about advertising
Total Marketing! Marketing Public Relations:
Computer Magazine Reviews, Major Media Coverage
Sales Promotion: In-store materials
New Media Products: MacWorld, MacWeek
And more . . .
Artists
Ad Agencies Have Skilled Specialists
Writers Researchers
Photographers Media Analysts Other Skills
Creating advertising
Planning advertising
Producing advertising
Performing research
Selecting media
Sales promotion and training
Strategic market planning
Trade show materials
Package design
Planning advertisingCreating
advertisingProducing advertising
Performing research
Selecting media
Strategic market planning
Sales promotion and training
Trade show materials
Package design
Full-Services Agencies
Full Range of Marketing
Communication and Promotion
Services
Non-Advertising Services Public relations
and publicity
Typical Full-Service Agency Organization
WritersArt Directors
Traffic
TVProduciton
Traffic
PrintProduction
VP CreativeServices
AccountExecutive
AccountSupervision
VP AccountServices
Media Research SalesPromotion
VP MarketingServices
Personnel Accounting Finance
OfficeManagement
VP Managementand Finance
President
Board ofDirectors
Services Provided by Agencies
Agency Services
The link between agency and client
Managed by the Account Executive
Research department may design and execute research programs
Media department may analyze, select and contract media resources
Creation and execution of ads
Copywriters, artists, other specialists
Marketing Services
Account Service
Creative Services
Marketing Services
Account Service
The Role of Creative Boutiques
CreativeBoutiques Provide Only Creative Services
Full-Service Agencies May Subcontract With Creative
Boutiques
Provide Only Creative Services
Full-Service Agencies May Subcontract With Creative
Boutiques
Other Functions Provided by the Internal Client Departments
Coca Cola’s in-house boutique created this popular spot
+
Specialize in Buying Media, Especially Broadcast Time
Agencies and Clients Develop Media Strategy
Agencies and Clients Develop Media Strategy
Specialize in Buying Media, Especially Broadcast Time
Media Buying Can Be Specialized
Media Buying
Services
Media Buying Organizations Implement the Strategy and
Buy Time and Space
Foote, Cone & Belding was the agency for Levi’s for 68 years
Poorperformance
PoorcommunicationsUnrealistic
demands
Personalityconflicts
Personnelchanges
Changesin size
Conflict ofinterests
Changesin strategy
Decliningsales
Paymentconflicts
Poorperformance
PoorcommunicationsUnrealistic
demands
Personalityconflicts
Personnelchanges
Changesin size
Conflict ofinterests
Changesin strategy
Decliningsales
Paymentconflicts
Why Agencies Lose Clients
Policy changes
Referrals
How Agencies Gain Clients
Solicitations
Presentations
Public Relations Image, Reputation
Gateway Changed Its Advertising After Changing Agencies
A Change in Strategy Led to a Change in Gateway’s Advertising
DirectMail
Data BaseManagement
Research
Creative
Media Services
Creative
Media Services
Research
DirectMail
Data BaseManagement
Direct Response Agency Activities
DirectResponseAgencies
Production
StrategyDevelopment
GeneratingPublicity
LobbyingPublicAffairs
DamageControl
ImagePortrayal
StrategyDevelopment
GeneratingPublicity
LobbyingPublicAffairs
DamageControl
ImagePortrayal
Functions performed by Public Relations Firms
ProgramPlanning
Audio
Special Effects
Video
WebBanner Ads
Kiosks
Web Sites
CD-ROMs
Special Effects
VideoAudio
KiosksCD-ROMs
Web SitesWebBanner Ads
Functions performed by Interactive Agencies
Interactive Media Creation
DigitalContent
Animation
Planning and Implementing
Research Planning and Implementing
Research
Information Application
Analysis and Interpretation
Primary Data Collection
Qualitative & Quantitative
Secondary Data Collection
Primary Data Collection
Qualitative & Quantitative
Analysis and Interpretation
Information Application
Marketing Research Companies
Sum Up
Ad Agency structure Ad Agency Organization Evaluation of Ad Agencies
Next Class
Perspectives on Consumer Behaviour
Read Chapter 4