organizing for advertising and promotion the role of ad agencies
DESCRIPTION
Chapter 3TRANSCRIPT
McGraw-Hill/Irwin Copyright © 2012 McGraw-Hill Companies, Inc., All right reversed
3
Organizing for Advertising and Promotion: The Role of Ad Agencies
and Other Marketing Communication Organizations
3-4
The Ad Agency’s Role
• Reasons for using an ad agency• Highly skilled specialists• (Careful!!!!! skill vs # of years)
• Specialization in a particular industry• Objective viewpoint of the market• Broad range of experience
3-5
Organizing for Advertising & Promotions
• The way a company (the client) organizes depends on• Its size• The number of products it markets• The role of advertising and promotion in
the marketing mix• The budget• Its marketing organization structure
3-6
Advertising Dept. Under a Centralized System
PresidentPresident
ProductionProduction FinanceFinance MarketingMarketingResearch
and develop-
ment
Research and
develop-ment
Human resourcesHuman
resources
Marketing research
Marketing research AdvertisingAdvertising SalesSales Product
planningProduct planning
3-7
Decentralized Advertising System
Production Finance
Sales
Brand Manager
Ad agency
ProductManagement
Sales promotion
Package design
Marketingservices
Marketing R & D Human Resources
Corporate
Brand Manager
Ad agency
AdvertisingDept
Marketing Research
Merchandising
3-8
Pros & Cons of In-house Agencies
Less experienceLess experience
ConsCons
Less objectivityLess objectivity
Less flexibilityLess flexibility
Less access to top creative talent
Less access to top creative talent
More controlMore control
Cost savingsCost savings
Increased coordinationIncreased coordination
ProsPros
StabilityStability
Access to top managementAccess to top management
3-9
Full-Service Agencies
Performing research
Performing research
Selecting mediaSelecting media
Full range of marketing
communication and promotion
services
Full range of marketing
communication and promotion
services
Creating advertisingCreating
advertising
Planning advertisingPlanning
advertising
Producing advertisingProducing advertising
Interactive capabilitiesInteractive capabilities
Package designPackage design
Nonadvertising services
Nonadvertising services
Public relations and publicity
Public relations and publicity
Sales promotions
Sales promotions
Strategic market planning
Strategic market planning
Direct marketing
Direct marketing
Negotiate and buy
3-11
Agency Services
Research department
May include account planners
Media dept. obtains media space, time
Research department
May include account planners
Media dept. obtains media space, time
Marketing Services
Marketing Services
The link between agency and client
Managed by the account executive
The link between agency and client
Managed by the account executive
Account Services
Account Services
Creation, execution of ads
Copywriterartists, other specialists
Creation, execution of ads
Copywriterartists, other specialists
Creative Services
Creative Services
Accounting
Finance
Human resources
New business generation
Accounting
Finance
Human resources
New business generation
Mgmt & Finance
Mgmt & Finance
3-12
Creative Boutiques
CreativeBoutiquesCreative
BoutiquesProvide only
creative servicesProvide only
creative services
May subcontract from full-service agencies
May subcontract from full-service agencies
Strength is turning out creative work quickly
Strength is turning out creative work quickly
3-13
• Boutique Agency• Limited, Specialty services• Hire vendor firms who specialize in
• Research, Music, Special Photography• Song writing, Aerial Photography• Dance choreography, Computer
Graphics• Animation, In store displays (P.O.P)
3-14
Media Buying
Specialize in buying media, especially broadcast time
Specialize in buying media, especially broadcast time
Agencies and clients develop media strategy
Agencies and clients develop media strategy
Media Specialist
Companies
Media Specialist
Companies
Media buying organizations implement strategies, and
buy time and space
Media buying organizations implement strategies, and
buy time and space
3-15
Agency Compensation Methods
Commissions from media
Fee, cost, and incentive-based systems
Percentage charges
3-16
Evaluating Agencies
Financial Audit
Verify costs, expenses
Personnel hours billed
Payments to media
Payments to suppliers
Qualitative Audit
Planning
Program development
Implementation
Results achieved
Who will actually work on your account?
3-17
How Agencies Gain Clients
ReferralsReferrals
SolicitationsSolicitations
PresentationsPresentations
Public RelationsPublic Relations Image, ReputationImage, Reputation
3-18
Sales Promotion Agencies
Catalog production
Promotional planning
Creative research
Tie-in coordination
Fulfillment
Premium design and manufacturing
Contest/sweepstakes management
3-19
Functions Performed by Public Relations Firms
Strategydevelopment
Generatingpublicity
Lobbying
Publicaffairs
News releases,communication
Research
Managingcrisis
Coordinationw/promotional
areas
Specialevents