Chapter 2 P P T

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Chapter 2 P P T

  1. 1. Chapter 2 The Structure of the Advertising Industry: Advertisers, Agencies, Media Companies, and Support Organizations © 2009 South-Western, a part of Cengage Learning PPT 2-1
  2. 2. Trends Affecting the Advertising and Promotion Industry  The “Undoing” of Agency Consolidation and Globalization—or not  Media Proliferation, Consolidation, and “Multiplatform” Media Organizations  Media Clutter and Fragmentation  Consumer Control: Blogs and TiVos  Web 2.0 PPT 2-2
  3. 3. Scope of the Advertising Industry U.S. Advertising Spending >$300 B Worldwide Advertising Spending >$600B PPT 2-3
  4. 4. Structure of the Advertising Industry (text Ex. 2.5) Advertisers Advertising and Promotion Agencies External Facilitators Media Organizations Target Audience PPT 2-4
  5. 5. Advertisers Manufacturers and Service Firms Procter & Gamble, Verizon Trade Resellers Sears, McDonald’s Government Federal, State, Local Social/Not-for-profit Organizations United Way, Nature Conservancy PPT 2-5
  6. 6. Ad in Context Example In addition to companies, the government makes extensive use of advertising. PPT 2-6
  7. 7. The Role of the Advertiser in IBP  Describe the value that the firm’s brand provides  Describe the brand’s position in the market Describe the firm’s objectives for the brand in the near-term and long-term  Identify the target market(s) that are most likely to respond favorable to the brand  Identify and manage the supply chain/distribution system that will most effectively reach the targets  Be committed to using advertising and other promotional tools to grow the brand PPT 2-7
  8. 8. Agencies Advertising Agencies: Promotion Agencies: Full-Service Direct Marketing/ Creative Boutique Database Interactive E-commerce In-House Sales Promotion Media Specialists Event Planning Design Firms Public Relations Firms PPT 2-8
  9. 9. Ad in Context Example Advertising agencies make extensive use of advertising to acquire new clients. PPT 2-9
  10. 10. Full Service Agency Services  Account Services  Marketing Research Services  Creative and Production Services  Media Planning and Buying Services  Administrative Services PPT 2-10
  11. 11. Agency Compensation  Commissions: – around 15% of airtime fees—in flux – 16 2/3 percent for outdoor media – web media is all negotiated  Markup Charges: – production cost + fixed %  Fee Systems: – hourly rates, or by project  Pay-for-Results: – tightly-specified objectives PPT 2-11
  12. 12. External Facilitators  Consultants – Creative, Media, Database  Production Facilitators  Software Firms – Web tracking, fulfillment PPT 2-12
  13. 13. Media Organizations  Broadcast – TV, radio  Print – Magazines, direct mail, – Newspapers, specialty  Interactive Media – Internet, interactive broadcast, – iPod, Cell Phone  Support Media – Outdoor, directories, sponsorship, – Point-of-purchase, branded entertainment  Media Conglomerates – Time Warner, Disney, Turner PPT 2-13
  14. 14. Target Audiences  Household Consumers  Businesses  Professionals  Government Organizations PPT 2-14

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