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  • 1. atulravish@gmail.comatulravish@gmail.com
  • 2. what is it ??what is it ?? Ad Agency is a service organised whichAd Agency is a service organised which provides specialized services in the field ofprovides specialized services in the field of advertising. It:advertising. It: PlansPlans DesignsDesigns Executes,andExecutes,and PromtesPromtes the ad campaingns in return of [mainly]:the ad campaingns in return of [mainly]: Fee by clientsFee by clients Commission by ad vehiclesCommission by ad vehicles
  • 3. the first advertising agentsthe first advertising agents s 1843 volney palmer1843 volney palmer q agent foragent for mediamedia, not advertisers, not advertisers s 1864 - george p. rowell1864 - george p. rowell q ““the johnny appleseedthe johnny appleseed of advertising”of advertising” q Rowell’s AmericanRowell’s American Newspaper DirectoryNewspaper Directory q space wholesalerspace wholesaler q shared his “secret”shared his “secret” q 1888 -1888 - “Printer’s Ink”“Printer’s Ink”
  • 4. q founded in 1864 byfounded in 1864 by francis w. ayer, 20francis w. ayer, 20 the first advertising agencythe first advertising agency q ““& son” made the& son” made the business seem morebusiness seem more establishedestablished q worked forworked for advertiseradvertiser q slogan -slogan - “keeping“keeping everlastingly at iteverlastingly at it brings success.”brings success.” s n.w. ayern.w. ayer & son& son
  • 5. major types of agency:major types of agency: s mega-agency groupsmega-agency groups s independent agenciesindependent agencies q national, regional, and localnational, regional, and local s specialized/niche agenciesspecialized/niche agencies s agency service suppliersagency service suppliers q media buying, creative servicesmedia buying, creative services
  • 6. mega-agency groupsmega-agency groups s prompted by mergers andprompted by mergers and client globalizationclient globalization s financial pressuresfinancial pressures martin sorrell, chairman WPP s service multinationalservice multinational accountsaccounts s subsidiaries providesubsidiaries provide “IMC” (integrated marketing“IMC” (integrated marketing communication) servicescommunication) services
  • 7. mega-agency pros & consmega-agency pros & cons positives:positives: s larger talent poollarger talent pool s negotiating cloutnegotiating clout s financial rewardsfinancial rewards s account securityaccount security s competitive edgecompetitive edge s strong partnershipsstrong partnerships s more servicesmore services s international linkinternational link negatives:negatives: s people vs. profitpeople vs. profit s creativity vs. sizecreativity vs. size s conflict ofconflict of interestsinterests s people businesspeople business
  • 8. national, regional & localnational, regional & local s these arethese are independent agenciesindependent agencies s there are nowthere are now fewer nationalfewer national agenciesagencies which are not part ofwhich are not part of mega-agency groupsmega-agency groups s regionalregional andand local agencieslocal agencies workwork with smaller clients who are usuallywith smaller clients who are usually located nearbylocated nearby
  • 9. specialized/niche agenciesspecialized/niche agencies s industry specialistsindustry specialists s ethnic agenciesethnic agencies
  • 10. specialized/niche agenciesspecialized/niche agencies s industry specialistsindustry specialists s ethnic agenciesethnic agencies s internet agenciesinternet agencies
  • 11. specialized/niche agenciesspecialized/niche agencies s industry specialistsindustry specialists s ethnic agenciesethnic agencies s internet agenciesinternet agencies s business-to-business agenciesbusiness-to-business agencies s creative boutiques andcreative boutiques and design housesdesign houses
  • 12. other suppliersother suppliers s provide “unbundled” servicesprovide “unbundled” services q one part of what an agency doesone part of what an agency does s media buying servicesmedia buying services s freelancers & consultantsfreelancers & consultants s production companiesproduction companies s in-house or “house” agenciesin-house or “house” agencies q agencies owned by clientsagencies owned by clients
  • 13. primary roles of agenciesprimary roles of agencies s idea generationidea generation s brand-buildingbrand-building
  • 14. primary services:primary services: s complete acomplete a marketing analysismarketing analysis s develop andevelop an advertising planadvertising plan s prepare aprepare a creative strategycreative strategy s createcreate advertising executionsadvertising executions s develop and implement adevelop and implement a media planmedia plan s handlehandle billingbilling andand paymentspayments s integrateintegrate other marketingother marketing communicationscommunications
  • 15. integrated marketing communicationintegrated marketing communication s““done right,done right, IMCIMC is theis the planningplanning andand implementationimplementation of theof the variousvarious communicationscommunications disciplinesdisciplines as aas a single, overallsingle, overall communicationscommunications system --system -- making allmaking all the channels work.”the channels work.”
  • 16. integrated marketing communicationintegrated marketing communication s advertisingadvertising s public relationspublic relations s direct responsedirect response s sales promotionsales promotion s personal sellingpersonal selling the imc promotion mixthe imc promotion mix
  • 17. ad agency departmentalization sFollowing are the types of department in a normalized ad agency: qAccounts management qCreative management qMedia department qResearch department
  • 18. s liaison between agency and clientliaison between agency and client s responsible for understanding...responsible for understanding... q the client’s businessthe client’s business q the client’s marketing needsthe client’s marketing needs q strategy developmentstrategy development s representing client point of viewrepresenting client point of view within the agencywithin the agency account managementaccount management
  • 19. s account managementaccount management directordirector s management supervisormanagement supervisor s account supervisorsaccount supervisors s account executivesaccount executives s assistant account execsassistant account execs s account coordinatorsaccount coordinators s traffictraffic account managementaccount management
  • 20. s responsibilityresponsibility q the creative departmentthe creative department is responsibleis responsible for creating and producing the print andfor creating and producing the print and broadcast advertisingbroadcast advertising s strategy is keystrategy is key q good creative workgood creative work is always guided by ais always guided by a creative strategycreative strategy that sets forththat sets forth goals togoals to be accomplishedbe accomplished andand key messagekey message pointspoints to be relayedto be relayed creative departmentcreative department
  • 21. creative departmentcreative department s executive & group creativeexecutive & group creative directorsdirectors s creative directorcreative director s associate creative directorassociate creative director s copywriterscopywriters s art directorsart directors s broadcast producersbroadcast producers s print production managersprint production managers s traffic coordinatorstraffic coordinators
  • 22. media departmentmedia department s TheThe media departmentmedia department has two mainhas two main functions -functions - planningplanning andand buying.buying. s The planning groupThe planning group handles morehandles more strategic marketing and media issues.strategic marketing and media issues. s The buying groupThe buying group handles mediahandles media negotiations and implementation.negotiations and implementation.
  • 23. s media directormedia director s associate media directorsassociate media directors s media supervisorsmedia supervisors s media plannersmedia planners s media buyersmedia buyers s media analystsmedia analysts media departmentmedia department
  • 24. s mega-agency media departmentsmega-agency media departments have now becomehave now become profit centersprofit centers s agencies have set up their mediaagencies have set up their media departments asdepartments as free-standing unitsfree-standing units s many large clients now look at mediamany large clients now look at media as aas a separate serviceseparate service big changes in thebig changes in the media departmentmedia department
  • 25. research departmentresearch department s interpret market environmentinterpret market environment q gather and analyze research data.gather and analyze research data. q primary and secondary techniquesprimary and secondary techniques s determine consumer needs/perceptionsdetermine consumer needs/perceptions q understand problemsunderstand problems s advise how ads can meetadvise how ads can meet strategic goalsstrategic goals q help find solutionshelp find solutions
  • 26. s research directorresearch director s research project managersresearch project managers s research assistantsresearch assistants s outside researchoutside research specialistsspecialists research departmentresearch department
  • 27. auxiliary agency functionsauxiliary agency functions s account planningaccount planning s strategy/creative review boardstrategy/creative review board s office managementoffice management q human resourceshuman resources q legal serviceslegal services q accountingaccounting q recruitmentrecruitment
  • 28. ways agencies make moneyways agencies make money s commissionscommissions q usually 15% of gross costsusually 15% of gross costs s feesfees q usually based on negotiated hourly rateusually based on negotiated hourly rate s incentivesincentives q still relatively new and problematicstill relatively new and problematic q usually based on performance goalsusually based on performance goals
  • 29. agency commissionsagency commissions s media commission systemmedia commission system q 15% media commission15% media commission s adjustable commission ratesadjustable commission rates q negotiate to match client budgetnegotiate to match client budget q sliding scalesliding scale s markups-production & servicemarkups-production & service q add a percentage markup to costsadd a percentage markup to costs q 17.65% of net = 15% of gross17.65% of net = 15% of gross
  • 30. types of fee systemstypes of fee systems s fixed fee (retainer)fixed fee (retainer) s cost-plus feecost-plus fee s performance feeperformance fee s hybrid fee &hybrid fee & commissioncommission
  • 31. incentivesincentives s in theory, a good way to workin theory, a good way to work s get paid based on how well you do, notget paid based on how well you do, not how much you billhow much you bill s in practice, difficult to implementin practice, difficult to implement s if client makes final decision (instead ofif client makes final decision (instead of agency), how can agency be responsibleagency), how can agency be responsible for final results?for final results? s results based on many factors, such asresults based on many factors, such as competitive efforts, not just advertisingcompetitive efforts, not just advertising
  • 32. new businessnew business s three primary sourcesthree primary sources q build existing client’s businessbuild existing client’s business q add and sell new IMC servicesadd and sell new IMC services q solicit new accountssolicit new accounts s two ongoing problemstwo ongoing problems q ““spec” workspec” work q teams “walking” with accountsteams “walking” with accounts ““The critical objective and roleThe critical objective and role of any ad agency is gaining newof any ad agency is gaining new business.”business.”
  • 33. beyond 2K10”beyond 2K10” advertisingadvertising agency trendsagency trends
  • 34. agency trendsagency trends sclutter, overloadclutter, overload,, “overchoice”“overchoice” q increasedincreased media optionsmedia options q increasingincreasing audience fragmentationaudience fragmentation q more messagesmore messages everywhereeverywhere s doing more with lessdoing more with less q economic pressures,economic pressures, “downsizing”“downsizing” q ongoingongoing client budget pressuresclient budget pressures s managing sizemanaging size q moremore mergersmergers andand mega-agenciesmega-agencies
  • 35. agency trendsagency trends s managingmanaging technologytechnology q interactive marketinginteractive marketing q e-mail, web sitese-mail, web sites s improvingimproving internal systemsinternal systems q account planningaccount planning q re-engineeringre-engineering agency organizationagency organization q improving delivery ofimproving delivery of imc servicesimc services
  • 36. as long as marketers needas long as marketers need ideasideas to build theirto build their brands,brands, they’re going to needthey’re going to need in conclusion...in conclusion... advertising agenciesadvertising agencies
  • 37. thanxthanx for any queries or suggestions, visit:for any queries or suggestions, visit: http://ravishroshan.blogspot.com/