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Advertising agencies


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  • 1. Advertising Agencies Presented By: Prakhar Kumar Pandey Roll No. 16
  • 2. Definition “An organization that provides a variety of advertising related services to clients seeking assistance in their advertising activities.” - American Marketing Association Full-service advertising agency engages in the planning and administration of advertising campaigns, including setting advertising objectives, developing advertising strategies, developing and producing the advertising messages, developing and executing media plans, and coordinating related activities such as sales promotion and public relations. Limited-service advertising agency concentrates on one of the major advertising agency functions such as developing and producing advertising messages or media plans.
  • 3. Primary Services • • • • • • • Complete a marketing analysis Develop an advertising plan Prepare a creative strategy Create advertising executions Develop and implement a media plan Handle billing and payments Integrate other marketing communication
  • 4. Functions • • • • Account management Creative Media planning and placement Research
  • 5. Organisational Structure Board of Direct ors [ Chairm an/CEO] President [ COO] Other Market ing Com municat ions Services [ PR, etc.] Strat egy Review Board [M anagment Com mitt ee] Off ice M anagement [ Pers onnel, Accounting, Legal, etc.] Account Mgmt . Direct or Creat ive Exec CD Research Direct or M anagement Supervis or Ass ociate Creat ive Direct or Project M anagers Ass ociate M edia Direct or Account Execut ive Creat ive Group: Research Ass is tants M edia Supervis or Ass t. Account Execut ive Copy Spvr. & Copywrit ers Broad cast Production Traff ic Art Supervisor & Art Direct ors Print Production M edia Dept . Direct or M edia Planner M edia Buyer Analys ts
  • 6. Account Management • Responsible for understanding... – the client’s business – the client’s marketing needs – strategy development • Representing client point of view within the agency
  • 7. Creative Department  Responsibility The creative department is responsible for creating and producing the print and broadcast advertising  Strategy is key Good creative work is always guided by a creative strategy that sets forth goals to be accomplished and key message points to be relayed
  • 8. Media Department  The media department has two main functions planning and buying. • The planning group handles more strategic marketing and media issues. • The buying group handles media negotiations and implementation.
  • 9. Research Department • Interpret market environment – Gather and analyze research data. – Primary and secondary techniques. • Determine consumer needs/perceptions – Understand problems. • Advise how ads can meet strategic goals – Help find solutions.
  • 10. Auxiliary agency functions • Account planning • Strategy/creative review board • Office management – Human resources – Legal services – Accounting – Recruitment
  • 11. 3 ways agencies make money • Commissions – Usually 15% of gross costs • Fees – Usually based on negotiated hourly rate • Incentives – Still relatively new and problematic – Usually based on performance goals
  • 12. Agency Commission • Media commission system – 15% media commission • Adjustable commission rates – Negotiate to match client budget • Markups-production & service – Add a percentage markup to costs – 17.65% of net = 15% of gross
  • 13. Types of fees • • • • Fixed fee (retainer) Cost-plus fee Performance fee Commission
  • 14. Incentives • Get paid based on how well you do, not how much you bill • In practice, difficult to implement • If client makes final decision (instead of agency), how can agency be responsible for final results? • Results based on many factors, such as competitive efforts, not just advertising
  • 15. Thank You!