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what is it ?? Ad Agency is a service organised which provides specialized services in the field of advertising. It: Plans Designs Executes,and Promtes the ad campaingns in return of [mainly]: Fee by clients Commission by ad vehicles

Ad Agency is a service organised which provides specialized services in the field of advertising. It:

Plans

Designs

Executes,and

Promtes

the ad campaingns in return of [mainly]:

Fee by clients

Commission by ad vehicles

the first advertising agents 1843 volney palmer agent for media , not advertisers 1864 - george p. rowell “ the johnny appleseed of advertising” Rowell’s American Newspaper Directory space wholesaler shared his “secret” 1888 - “Printer’s Ink”

1843 volney palmer

agent for media , not advertisers

1864 - george p. rowell

“ the johnny appleseed of advertising”

Rowell’s American Newspaper Directory

space wholesaler

shared his “secret”

1888 - “Printer’s Ink”

founded in 1864 by francis w. ayer, 20 the first advertising agency “ & son” made the business seem more established worked for advertiser slogan - “keeping everlastingly at it brings success.” n.w. ayer & son

founded in 1864 by francis w. ayer, 20

“ & son” made the business seem more established

worked for advertiser

slogan - “keeping everlastingly at it brings success.”

n.w. ayer & son

major types of agency: mega-agency groups independent agencies national, regional, and local specialized/niche agencies agency service suppliers media buying, creative services

mega-agency groups

independent agencies

national, regional, and local

specialized/niche agencies

agency service suppliers

media buying, creative services

mega-agency groups prompted by mergers and client globalization financial pressures service multinational accounts subsidiaries provide “IMC” (integrated marketing communication) services martin sorrell, chairman WPP

prompted by mergers and client globalization

financial pressures

service multinational accounts

subsidiaries provide “IMC” (integrated marketing communication) services

mega-agency pros & cons positives: larger talent pool negotiating clout financial rewards account security competitive edge strong partnerships more services international link negatives: people vs. profit creativity vs. size conflict of interests people business

positives:

larger talent pool

negotiating clout

financial rewards

account security

competitive edge

strong partnerships

more services

international link

negatives:

people vs. profit

creativity vs. size

conflict of interests

people business

national, regional & local these are independent agencies there are now fewer national agencies which are not part of mega-agency groups regional and local agencies work with smaller clients who are usually located nearby

these are independent agencies

there are now fewer national agencies which are not part of mega-agency groups

regional and local agencies work with smaller clients who are usually located nearby

specialized/niche agencies industry specialists ethnic agencies

industry specialists

ethnic agencies

specialized/niche agencies industry specialists ethnic agencies internet agencies

industry specialists

ethnic agencies

internet agencies

specialized/niche agencies industry specialists ethnic agencies internet agencies business-to-business agencies creative boutiques and design houses

industry specialists

ethnic agencies

internet agencies

business-to-business agencies

creative boutiques and design houses

other suppliers provide “unbundled” services one part of what an agency does media buying services freelancers & consultants production companies in-house or “house” agencies agencies owned by clients

provide “unbundled” services

one part of what an agency does

media buying services

freelancers & consultants

production companies

in-house or “house” agencies

agencies owned by clients

primary roles of agencies idea generation brand-building

idea generation

brand-building

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 communications

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 communications

integrated marketing communication “ done right, IMC is the planning and implementation of the various communications disciplines as a single, overall communications system -- making all the channels work.”

“ done right, IMC is the planning and implementation of the various communications disciplines as a single, overall communications system -- making all the channels work.”

integrated marketing communication advertising public relations direct response sales promotion personal selling the imc promotion mix

advertising

public relations

direct response

sales promotion

personal selling

ad agency departmentalization Following are the types of department in a normalized ad agency: Accounts management Creative management Media department Research department

Following are the types of department in a normalized ad agency:

Accounts management

Creative management

Media department

Research department

liaison between agency and client responsible for understanding... the client’s business the client’s marketing needs strategy development representing client point of view within the agency account management

liaison between agency and client

responsible for understanding...

the client’s business

the client’s marketing needs

strategy development

representing client point of view within the agency

account management director management supervisor account supervisors account executives assistant account execs account coordinators traffic account management

account management director

management supervisor

account supervisors

account executives

assistant account execs

account coordinators

traffic

responsibility creative department 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

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

creative department executive & group creative directors creative director associate creative director copywriters art directors broadcast producers print production managers traffic coordinators

executive & group creative directors

creative director

associate creative director

copywriters

art directors

broadcast producers

print production managers

traffic coordinators

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.

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.

media director associate media directors media supervisors media planners media buyers media analysts media department

media director

associate media directors

media supervisors

media planners

media buyers

media analysts

mega-agency media departments have now become profit centers agencies have set up their media departments as free-standing units many large clients now look at media as a separate service big changes in the media department

mega-agency media departments have now become profit centers

agencies have set up their media departments as free-standing units

many large clients now look at media as a separate service

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 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

research director research project managers research assistants outside research specialists research department

research director

research project managers

research assistants

outside research specialists

auxiliary agency functions account planning strategy/creative review board office management human resources legal services accounting recruitment

account planning

strategy/creative review board

office management

human resources

legal services

accounting

recruitment

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

commissions

usually 15% of gross costs

fees

usually based on negotiated hourly rate

incentives

still relatively new and problematic

usually based on performance goals

agency commissions media commission system 15% media commission adjustable commission rates negotiate to match client budget sliding scale markups-production & service add a percentage markup to costs 17.65% of net = 15% of gross

media commission system

15% media commission

adjustable commission rates

negotiate to match client budget

sliding scale

markups-production & service

add a percentage markup to costs

17.65% of net = 15% of gross

types of fee systems fixed fee (retainer) cost-plus fee performance fee hybrid fee & commission

fixed fee (retainer)

cost-plus fee

performance fee

hybrid fee & commission

incentives in theory, a good way to work 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

in theory, a good way to work

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

new business three primary sources build existing client’s business add and sell new IMC services solicit new accounts two ongoing problems “ spec” work teams “walking” with accounts “ The critical objective and role of any ad agency is gaining new business.”

three primary sources

build existing client’s business

add and sell new IMC services

solicit new accounts

two ongoing problems

“ spec” work

teams “walking” with accounts

beyond 2K10” advertising agency trends

advertising agency trends

agency trends clutter, overload , “overchoice” increased media options increasing audience fragmentation more messages everywhere doing more with less economic pressures, “downsizing” ongoing client budget pressures managing size more mergers and mega-agencies

clutter, overload , “overchoice”

increased media options

increasing audience fragmentation

more messages everywhere

doing more with less

economic pressures, “downsizing”

ongoing client budget pressures

managing size

more mergers and mega-agencies

agency trends managing technology interactive marketing e-mail, web sites improving internal systems account planning re-engineering agency organization improving delivery of imc services

managing technology

interactive marketing

e-mail, web sites

improving internal systems

account planning

re-engineering agency organization

improving delivery of imc services

as long as marketers need ideas to build their brands, they’re going to need in conclusion... advertising agencies

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