Advertising Organization 1
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  • 1.  
  • 2.
    • An Advertising Agency or ad agency is a service provider that works for clients to create an effective and goal oriented advertising campaign aimed at representing the Company positively in the eyes of its target customers.
  • 3.
    • “ An Advertising Agency is an independent organization of Creative people and business people who specialize in developing and preparing marketing plans, advertisements,
    • and other promotional tools.’’
  • 4.
    • Advertising agencies are outside companies that provide for the marketing and advertising needs of other businesses and organizations.
    • Advertising agencies offer a full range of advertising services and advice based on market studies, popular culture and advanced sales techniques
  • 5.
    • To advertise their products, brands and services to present and prospective customers.
    • For planning and creating an effective advertising campaign.
    • To take over the process of brand building, strategizing and pushing sales through other promotion techniques like sales promotions etc.
  • 6.
    • IN HOUSE AGENCY
    • FULL-SERVICES AGENCY
    • SPECIAL-SERVICES AGENCY
    • CREATIVE BOUTIQUES
    • SWEAT SHOPS
  • 7.
    • Location
    • Size
    • Agency working for competitors
    • Image of agency
    • Services offered by Ad Agency
    • Rates charged
    • Creative skills & New ideas
    • Past record of Agency
    Factors to be considered in selecting an Ad Agency:-
  • 8.
    • Quality & Caliber of Staff
    • Financially Sound
    • Agency Experience
    • So Ad-Agency should not be selected hurriedly. The advertiser should first develop its Job description, decide its needs, Ad-budget, & then look for a suitable agency whose talent. Image, experience & record matches closely with clients description, needs & Budget.
  • 9. On Departmental basis On Group basis
  • 10.
    • Client Liaison department
    • Research department
    • Copy Writing Department
    • Art Department
    • Media Department
    • Accounts Department
    • Audio-Visual Ad Production Department
    • Marketing Service Department
    • Public Relations Department
    • Evaluation Department
  • 11.
    • Planning of Advertising
    • Preparation of Advertisement
    • Placement & Execution of Advertisement
    • Marketing Services
  • 12. Advertising Agency General Manager Board of Directors Manager planning department Manager marketing services department Manager Ad-placement execution department Manager Ad-preparation department
    • Client’s product analysis
    • Market analysis
    • Competition analysis
    • Media analysis
    • Message contents
    • Copy Writing
    • Copy Designing
    • Copy developing
    • Message appeals, theme
    • Media selection
    • Media scheduling
    • Ad execution
    • Evaluating Ad effectiveness
    • Collecting & Paying Dues
    • Product services
    • Direct mail services
    • Sales training services
    • Publicity & Public Relations services
    • Tele-Marketing
    • Merchandising Services
  • 13. COMMISSION SYSTEM FEES SYSTEM SERVICE CHARGES
  • 14.
    • It is the traditional method of compensating Ad-agencies.
    • When the agency has sold space or time of media to its client, then media owners pay a commission on their sales to Ad agencies.
    • Usually ,this commission is 15% of the amount paid by client to media.
    • This commission covers the expenses of services rendered by agency to client & media.
  • 15.
    • Suppose an Ad agency prepares a full page magazine advertisement for its client.
    • The card rate for this page is Rest. 50000/- and the agency is entitled to commission of 15%.
    • If there is cash discount of 2% on amount due then cash discount is computed on the amount agency owes to the media i.e. 42,500(not full card rate).
    • This cash discount is passed on to the client( advertiser) by Ad-agency.
  • 16. Media bills agency Agency bills advertiser Cost of full page magazine Ad Less 15% Commission Less 2% cash Discount Agency pays Media Rs. 50,000 (-) 7500 Rs.42,500 Rs. 850 Rs. 41,650 Cost of full page magazine Ad Less 2% Cash Discount on Rs. 42,500(passed on to client) Agency charges from Advertiser Rs. 50,000 Rs. 850 Rs. 49,150
  • 17.
    • This system is easy to administer.
    • Fixed rate of commission.
    • It is beneficial for media as it procures large amount of business for media.
    • This type of compensation method has promoted non-price competition.
  • 18.
    • Advertising agency is always tempted to recommend an expensive media to draw a higher commission.
    • Fixed percentage of commission can not relate efforts made by agency to rewards earned.
    • Media inflation would increase agency’s remuneration which is not fair.
    • This system has also resulted in offerings kick-backs by Ad-agency to the directors of big-corporate concerns to procure business & to earn huge commission from media.
  • 19.
    • This is the second type of compensation method.
    • These service charges are added in the form of a fixed percentage to the cost of material & services purchased for the advertiser.
    • Normally this percentage is cost +15%.
  • 20.
    • Agency income is also derived from fees charged by agency form its clients.
    • Types of Fees-arrangements:-
    • Fixed- Fee Method
    • Speculative Method
  • 21.
    • This method is theoretically more appropriate than commission system as it is directly linked to services provided by the agent.
    • It is difficult to operate service charges method as it involves a lot of clerical work to prepare separate cost accounts for each client.