05 agencies


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05 agencies

  1. 1. advertising agencies
  2. 2. what agencies do. structure & organization and how they’re organized to do it.
  3. 3. 7 primary services: <ul><li>complete a marketing analysis </li></ul><ul><li>develop an advertising plan </li></ul><ul><li>prepare a creative strategy </li></ul><ul><li>create advertising executions </li></ul><ul><li>develop and implement a media plan </li></ul><ul><li>handle billing and payments </li></ul><ul><li>integrate other marketing communications </li></ul>
  4. 4. 4 functions of full-service agencies <ul><li>account management </li></ul><ul><li>creative </li></ul><ul><li>media planning and placement </li></ul><ul><li>research </li></ul>
  5. 5. agency organization chart
  6. 6. <ul><li>liaison between agency and client </li></ul><ul><li>responsible for understanding... </li></ul><ul><ul><li>the client’s business </li></ul></ul><ul><ul><li>the client’s marketing needs </li></ul></ul><ul><ul><li>strategy development </li></ul></ul><ul><li>representing client point of view within the agency </li></ul>account management
  7. 7. <ul><li>account management director </li></ul><ul><li>management supervisor </li></ul><ul><li>account supervisors </li></ul><ul><li>account executives </li></ul><ul><li>assistant account execs </li></ul><ul><li>account coordinators </li></ul><ul><li>traffic </li></ul>account management
  8. 8. <ul><li>responsibility </li></ul>creative department <ul><ul><li>the creative department is responsible for creating and producing the print and broadcast advertising </li></ul></ul><ul><li>strategy is key </li></ul><ul><ul><li>good creative work is always guided by a creative strategy that sets forth goals to be accomplished and key message points to be relayed </li></ul></ul>
  9. 9. creative department <ul><li>executive & group creative directors </li></ul><ul><li>creative director </li></ul><ul><li>associate creative director </li></ul><ul><li>copywriters </li></ul><ul><li>art directors </li></ul><ul><li>broadcast producers </li></ul><ul><li>print production managers </li></ul><ul><li>traffic coordinators </li></ul>
  10. 10. media department <ul><li>The media department has two main functions - planning and buying. </li></ul><ul><li>The planning group handles more strategic marketing and media issues. </li></ul><ul><li>The buying group handles media negotiations and implementation. </li></ul>
  11. 11. <ul><li>media director </li></ul><ul><li>associate media directors </li></ul><ul><li>media supervisors </li></ul><ul><li>media planners </li></ul><ul><li>media buyers </li></ul><ul><li>media analysts </li></ul>media department Media Plan
  12. 12. <ul><li>mega-agency media departments have now become profit centers </li></ul><ul><li>agencies have set up their media departments as free-standing units </li></ul><ul><li>many large clients now look at media as a separate service </li></ul>big changes in the media department
  13. 13. <ul><li>interpret market environment </li></ul><ul><ul><li>gather and analyze research data. </li></ul></ul><ul><ul><li>primary and secondary techniques </li></ul></ul><ul><li>determine consumer needs/perceptions </li></ul><ul><ul><li>understand problems </li></ul></ul><ul><li>advise how ads can meet strategic goals </li></ul><ul><ul><li>help find solutions </li></ul></ul>research department Research Report
  14. 14. <ul><li>research director </li></ul><ul><li>research project managers </li></ul><ul><li>research assistants </li></ul><ul><li>outside research specialists </li></ul>research department Research Report
  15. 15. auxiliary agency functions <ul><li>account planning </li></ul><ul><li>strategy/creative review board </li></ul><ul><li>office management </li></ul><ul><ul><li>human resources </li></ul></ul><ul><ul><li>legal services </li></ul></ul><ul><ul><li>accounting </li></ul></ul><ul><ul><li>recruitment </li></ul></ul>
  16. 16. 3 ways agencies make money <ul><li>commissions </li></ul><ul><ul><li>usually 15% of gross costs </li></ul></ul><ul><li>fees </li></ul><ul><ul><li>usually based on negotiated hourly rate </li></ul></ul><ul><li>incentives </li></ul><ul><ul><li>still relatively new and problematic </li></ul></ul><ul><ul><li>usually based on performance goals </li></ul></ul>
  17. 17. agency commissions <ul><li>media commission system </li></ul><ul><ul><li>15% media commission </li></ul></ul><ul><li>adjustable commission rates </li></ul><ul><ul><li>negotiate to match client budget </li></ul></ul><ul><ul><li>sliding scale </li></ul></ul><ul><li>markups-production & service </li></ul><ul><ul><li>add a percentage markup to costs </li></ul></ul><ul><ul><li>17.65% of net = 15% of gross </li></ul></ul>
  18. 18. 4 types of fee systems <ul><li>fixed fee (retainer) </li></ul><ul><li>cost-plus fee </li></ul><ul><li>performance fee </li></ul><ul><li>hybrid fee & commission </li></ul>
  19. 19. incentives <ul><li>in theory, a good way to work </li></ul><ul><li>get paid based on how well you do, not how much you bill </li></ul><ul><li>in practice, difficult to implement </li></ul><ul><li>if client makes final decision (instead of agency), how can agency be responsible for final results? </li></ul><ul><li>results based on many factors, such as competitive efforts, not just advertising </li></ul>
  20. 20. new business <ul><li>three primary sources </li></ul><ul><ul><li>build existing client’s business </li></ul></ul><ul><ul><li>add and sell new IMC services </li></ul></ul><ul><ul><li>solicit new accounts </li></ul></ul><ul><li>two ongoing problems </li></ul><ul><ul><li>“ spec” work </li></ul></ul><ul><ul><li>teams “walking” with accounts </li></ul></ul>“ The critical objective and role of any ad agency is gaining new business.”
  21. 21. things to think about: <ul><li>why might you be interested in going into the agency business? </li></ul><ul><li>what might keep you from choosing a career in the agency business? </li></ul>