Advertising Agency

Role of Advertising agency and other marketing communication organization

Organization of Advertising Purpose is to communicate effectively Five participants of IMC process Advertiser (Client) Agency Media organizers Marketing Communications Specialists Direct Marketing Agencies Sales Promotion Agencies Interactive Agencies Public Relations Firms Collateral services providers

One of the most important element Have product/services to offer Or some cause to market Is one of the final participant to decide about ad. Advertisers (Clint)

Creates /produces/ place the ads. on media Different types of agencies Full service agency Account services Marketing services Creative services Agency

Basic Function is to provide Entertainment News Knowledge in such a way that it provides an environment to agency or advertisers to buy their time and place Media organizers

are Direct marketing agencies Sales promotion agencies Contests/sweepstakes Interactive firms Develop websites Public relations firms Marketing communication specialist

Services which are been provided to agencies and media organizers Like vendors Printers etc. Collateral services providers

Organizational Structure of Advertising Three types of structures each have its own adv. & disadv. Central system Decentralized system Separate marketing, sales, advertising and promotion departments for various product lines or businesses of the company. Often use product or brand management system In-house system Selection of system depends upon Size of the orgz. # of products Role of ads in the whole process budget

Procter & Gamble uses the brand management system

Basic function of manager in centralized system Planning and budgeting Administration and execution Coordination with other departments Like makting research dept./sales dept./materials regarding POP. Coordination with out side agencies and services Media buying services/ collateral services agencies etc.

Advantages Facilitated communications Fewer personnel required Continuity in staff Involvement of top management/ experience is more Disadvantage Some times lower level staff can’t understand the over all mkting plan as the responsibility rests on top Longer response time Inability to handle multiple product line. Client Organization For IMC The Centralized System

Decentralized system or brand mangt. system Advantages More flexible in term of promotional programs Centralized managerial attention Rapid response to the problems. Disadvantage Sometimes brand mangers are at junior level lack of experience Brand manger may have less authority over the execution of plan which they have created. Misallocation of funds.

In-house system Advantages Cost saving More control Increased coordination Disadvantage Less experience Less objectivity Less flexible

No Fear uses an in-house agency Source: Courtesy No Fear.

Role of Advertising Agency Is a service organization that specializes in Developing Preparing and Executing the promotional programs for its client.

Reasons for using an outside Agency U get highly professional people to work for. Artists /writers /singers/media analysis are normally attached with Agencies are specialized in certain areas like consumer goods etc. U can get an overall image of mkt. very easily against company policies /biases/limitations or we can say it provides us an insight to the industry. an agency may have personnel who have worked in some client related industries.

4 Types of Agencies Full service agency Involved in planning/creative /producing/research/media selection and also in some non advertising services like Strategic mkting planning Sales promotions Sales training Trade shows Package design Public relations programs Publicity

Typical Full-Service Agency Organization

2.Account services Account management is to provide a link b/w client and agencies Normally a very experienced and professional person of marketing is involved in such type of arrangement.

3.Marketing services Have : Research departments Who is the target audiences Who is the ultimate consumers Trends of industries Consumers habits etc Segment analysis etc. Media departments Must have media profiles

4.Creative services Responsible for creating and executing ads. Copy writers: r the personnel who write ,headlines/subhead lines/body copy. May be involved in basic theme or the big selling idea of the promotional campaigns. May have diff. departments Art department Prepare story board for TV Production dept. Traffic dept.

Some more types of services Creative boutiques Provides only creative services. e.g. supreme with Shoaib Mansoor Media Buying Services Some people only buy space in media and sell to others

Agency Compensation Diff. Forms of compensation Commission from media 15% from media Fixed fee method Fee-commission combination Cost plus agreement Fee basis on the cost of its work Pay actual cost+profit margin Incentive based % charges normally 20-25 % when sub let or purchase services from others.

Example of the Commission System

Why Agencies Lose Clients Poor performance Poor communication Unrealistic demands Personality conflicts Personnel changes Changes in size Conflict of interests Changes in strategy Declining sales Payment conflicts Policy changes

How Agencies Gain Clients Referrals Solicitations Making calls and following them Presentation People ask agency to come and present itself. Presentations Public Relations Image and Reputation

Awards competitions are a way for agencies to build their reputation

A promotional agency advertises its services

Advertising Agency

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Advertising Agency