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  • Strategic Communications Agencies

  • AgenciesThe key playersTypes of agenciesHow agencies charge clientsOrganization of agencies

  • The Four PlayersThe ClientsThe Strategic Communication AgenciesThe MediaThe Vendors

  • Types of ClientsManufacturersResellers (retailers)Institutions Individuals

  • The AgenciesIndependent communications agenciesFull service agenciesCreative boutiquesSpecialty shopsIn-house communication departments

  • Advertising MediaPrint (newspapers, magazines)Broadcast (television, radio)Outdoor (billboards, transit)Direct response (direct mail, telemarketing)Internet and InteractiveMiscellaneous

  • The VendorsFreelancersConsultantsProduction Professionals

  • Types of AgenciesThe full-service agencyCreative boutiquesMedical agenciesPolitical agenciesMinority agenciesIn-house agenciesMedia buying services

  • The Full-Service AgencyMajor staff functions:Research and account planningAccount management/client serviceCreative servicesMedia planning and buyingPubic relationsPromotions and event planningDirect responseInteractive

  • The Full-Service AgencyOther major agency functions:AccountingLegal ServicesTrafficProductionHuman resources

  • Services ProvidedAnalysis of marketing and cultural dataFormulation of core strategy and tacticsRecommendation of creative directionProduction of brand messages - Ad/PRCreate promotions and databasesPlacement in print, broadcast & InternetVerification of message placement

  • Creative BoutiquesSmall agencies focus on creativeSpecialize in producing adsLittle staff for research, strategy, media planning, or public relationsSub-contract for creative work from full-service agenciesOften have short life spans

  • Medical/Political ShopsEntirely service specialized clientsSpecialized knowledge of categoryProvide full-service functions

  • Minority AgenciesOften full-service agenciesSpecializing in campaigns that target minorities/specialized populationsBlacks, Hispanics, Asians, Gay/Lesbian

  • In-house AgenciesOwned and supervised by companyReasons for in-house agencies:SavingsSpecializationPriority serviceBut, minimum staffing of experts and possibility of group-think

  • Media Buying ServicesOriginal format of ad agenciesSole function is media buyingGrowing complexity of media buyingBuying media in bulk

  • How Agencies are PaidThe Commission SystemThe Fee SystemIncentive-based Systems

  • The Commission SystemStandard rate: 15% of media buysTrend toward negotiated commissionFierce competition among agencies

  • The Fee SystemNegotiated hourly feeMedia buys billed directly to clientHourly rate rule of thumb:3 x hourly salary of each employeeEmployee hourly salary =Salary / Hours worked per year

  • Incentive-based SystemsHigher fees for good performanceIncentives negotiated in advancePay per performance system

  • Organization of AgenciesOrganized around departmentsOrganized around clientsOrganized around tasksOrganized by ownership

  • Organizing Agencies

  • Tradeoffs in Agency Organization

  • Agency AssignmentGet in your agencies and decide what structure you want to adoptGreater integration usually results in more coherent campaignsMore need to negotiate decisions - share responsibilities for sectionsBe realistic about level of integration

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