The Agency World


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The Agency World

  1. 1. The Agency World Chapter 2
  2. 2. The Agency World <ul><li>The traditional agency </li></ul><ul><li>New agency structures </li></ul><ul><li>The growing range of specialists </li></ul><ul><li>Selecting an agency </li></ul><ul><li>Paying the agency </li></ul>
  3. 3. The agency world Objectives <ul><li>Understand the role of advertising agencies and the relationship between agency and client </li></ul><ul><li>Appreciate the factors that promote creative and effective advertising </li></ul>
  4. 4. Introduction <ul><li>No business needs an agency </li></ul><ul><li>Can buy different services from separate specialists </li></ul><ul><li>Most businesses find it easier to use an agency </li></ul>
  5. 5. Alternative ways to perform the advertising function <ul><li>Necessitates employing an advertising staff and absorbing the operation costs </li></ul><ul><li>Unprofitable unless a company does a large and continuous advertising </li></ul>In-house advertising operation
  6. 6. Full-service advertising agency <ul><li>Advantages </li></ul><ul><li>In-depth knowledge and skills </li></ul><ul><li>Obtaining negotiating muscle with the media </li></ul><ul><li>Coordinating advertising and marketing efforts </li></ul><ul><li>Disadvantages </li></ul><ul><li>Some control is lost </li></ul><ul><li>Larger clients are favored over small clients </li></ul><ul><li>Occasionally inefficient in media buying </li></ul>
  7. 7. A la carte <ul><li>Advantages </li></ul><ul><li>Use services only when they are needed </li></ul><ul><li>Availability of high-caliber creative talent </li></ul><ul><li>Potential cost efficiencies </li></ul><ul><li>Disadvantages </li></ul><ul><li>Specialists approach client problems in a stereotyped fashion </li></ul><ul><li>Lack of cost accountability </li></ul><ul><li>Financial instability of smaller boutiques </li></ul>
  8. 8. Advertising Agency Organization <ul><li>Develop advertising copy and campaigns </li></ul><ul><li>Copywriters, production people, and creative directors </li></ul>Creative Services Account Management Media Services Research Services
  9. 9. Advertising Agency Organization <ul><li>Selecting the best advertising media </li></ul><ul><li>Media planners develop overall media strategy </li></ul><ul><li>Media buyers procure the selected media </li></ul>Creative Services Account Management Media Services Research Services
  10. 10. Advertising Agency Organization <ul><li>Study clients’ customers’ buying habits, purchase preferences, and responsiveness </li></ul><ul><li>Focus groups, mall intercepts, acquisition of syndicated research data </li></ul>Creative Services Account Management Media Services Research Services
  11. 11. Advertising Agency Organization <ul><li>Link the agency with the client </li></ul><ul><li>Act as liaisons so that the client does not need to interact directly with several different service departments and specialists </li></ul>Creative Services Account Management Media Services Research Services
  12. 12. Memorable Advertising <ul><li>Apple Computer’s “1984” TV Commercial </li></ul>
  13. 13. What Makes Effective Advertising? Sound Strategy Consumer’s View Persuasive Doesn’t Overwhelm Deliver on Promises Break Clutter Effective Advertising
  14. 14. Creating Effective Advertising <ul><li>The Role of Creativity </li></ul>
  15. 15. Being Creative <ul><li>Characteristics of </li></ul><ul><li>creative campaigns </li></ul><ul><li>Differentiates itself </li></ul><ul><li>Out-if-the-ordinary </li></ul><ul><li>Energizer Batteries </li></ul>
  16. 16. Energizer Batteries <ul><li>Energizer Batteries keep going, and going, and going… </li></ul><ul><li>Like the drum-beating bunny that reinforces the argument </li></ul>
  17. 17. Being Creative <ul><li>Characteristics of </li></ul><ul><li>creative campaigns </li></ul><ul><li>Differentiates itself </li></ul><ul><li>Out-if-the-ordinary </li></ul><ul><li>Energizer Batteries </li></ul><ul><li>Pepsi-Cola </li></ul>
  18. 18. Pepsi-Cola <ul><li>Pepsi-Cola </li></ul><ul><li>commercial </li></ul><ul><li>pokes fun at its </li></ul><ul><li>competitor, </li></ul><ul><li>Coca-cola </li></ul><ul><li>and subtly </li></ul><ul><li>conveys the </li></ul><ul><li>message that </li></ul><ul><li>perhaps </li></ul><ul><li>Pepsi is better </li></ul><ul><li>than Coke </li></ul>
  19. 19. Being Creative <ul><li>Characteristics of </li></ul><ul><li>creative campaigns </li></ul><ul><li>Differentiates itself </li></ul><ul><li>Out-if-the-ordinary </li></ul><ul><li>Energizer Batteries </li></ul><ul><li>Pepsi-Cola </li></ul><ul><li>Volkswagen Golf </li></ul>
  20. 20. Being Creative <ul><li>Characteristics of </li></ul><ul><li>creative campaigns </li></ul><ul><li>Differentiates itself </li></ul><ul><li>Out-if-the-ordinary </li></ul><ul><li>Energizer Batteries </li></ul><ul><li>Pepsi-Cola </li></ul><ul><li>Volkswagen Golf </li></ul><ul><li>Bud Light </li></ul>
  21. 21. Creating Effective Advertising The Role of Creativity <ul><li>Spuds MacKenzie campaign </li></ul><ul><li>Budfrogs </li></ul><ul><li>Louie and Frank </li></ul><ul><li>Whassup?! </li></ul>
  22. 22. Little Caesar’s <ul><li>The toga-clad “Pizza, </li></ul><ul><li>Pizza” man captures </li></ul><ul><li>and holds the viewer’s </li></ul><ul><li>attention and provides </li></ul><ul><li>Little Caesar’s with a </li></ul><ul><li>unique image vis-a-vis </li></ul><ul><li>its more laid-back </li></ul><ul><li>competitors </li></ul>
  23. 23. Volkswagen Golf <ul><li>This simple ad dramatizes that the Volkswagen </li></ul><ul><li>Golf is a roomy car while holding the viewer’s </li></ul><ul><li>attention in an entertaining manner </li></ul>
  24. 24. New agency structures <ul><li>Three factors that influence the ways in which new agency formats have emerged </li></ul>
  25. 25. The new agency structures <ul><li>Technological changes </li></ul><ul><li>Growing importance of internationally held accounts for large agencies </li></ul><ul><li>Recognition that different clients have diversified needs </li></ul>
  26. 26. Reorganizing the old <ul><li>The ‘account room’ approach </li></ul><ul><li>Structure the agency around its clients </li></ul><ul><li>- creates a focus for the account team </li></ul><ul><li>- keeps them close to the brand </li></ul>
  27. 27. Reorganizing the old <ul><li>The “Virtual Account Group” or “Virtual agency” </li></ul><ul><li>Uses linked computers </li></ul><ul><li>Intranet </li></ul><ul><li>Video conferencing </li></ul><ul><li>High tech connections </li></ul>
  28. 28. Reorganizing the old <ul><li>“ hot desking” </li></ul><ul><li>First come first served offices </li></ul>
  29. 29. Results of reorganization <ul><li>Gets agencies away from what they always criticized in their clients. </li></ul><ul><li>- focus on products and production with less regard to customers needs </li></ul><ul><li>- Allows for anyone on the team to be involved in the creative process. </li></ul>
  30. 30. Specialist Agencies <ul><li>Media Buying agencies </li></ul><ul><li>Creative boutiques </li></ul><ul><li>Direct marketing </li></ul><ul><li>Account planning </li></ul><ul><li>Management consultants </li></ul>
  31. 31. Media Buying Agencies <ul><li>Buy blocks of space or time from media business </li></ul><ul><li>Effectively became media wholesalers </li></ul><ul><li>An important source of advertising research </li></ul>
  32. 32. Creative Boutiques <ul><li>Creative hot-shops </li></ul><ul><li>Using briefs from clients – create advertisements </li></ul><ul><li>Often freelancers </li></ul><ul><li>Assist full service agencies when under pressure </li></ul>
  33. 33. Direct Marketing <ul><li>Nowadays full service agencies are merging or aquiring direct specialists </li></ul><ul><li>Allows for common creative direction </li></ul><ul><li>Also developing new skills necessary for the internet advertising market </li></ul>
  34. 34. Account Planning <ul><li>Take over the planning role for an agency </li></ul><ul><li>Act as supplementary source of ideas for agency or advertiser </li></ul>
  35. 35. Management consultants <ul><li>Provide general consultancy on brand strategy </li></ul>
  36. 36. Selecting an agency <ul><li>Have they fully understood the brief? </li></ul><ul><li>Do they know how to use market research? Can they contribute to our thinking here? </li></ul><ul><li>Is their strategic thinking sound? </li></ul><ul><li>Is it imaginative? Have I learned anything useful from it? </li></ul><ul><li>Are they professional and businesslike? </li></ul><ul><li>Can I work with their senior people? And will they be actually working on my business? </li></ul><ul><li>Are their capabilities high in all key areas – management, strategy, creative, media? </li></ul><ul><li>Do they work well as a team – both among themselves and with our people? </li></ul>
  37. 37. Selecting an agency <ul><li>Is their creative work of a high quality? </li></ul><ul><li>Is this confined to TV, or does it go across all media? </li></ul><ul><li>Does this include below-the-line? New media? Can they offer an integrated service? </li></ul><ul><li>Do they have real expertise in the specialist areas which we are looking at, egl direct marketing, new media? </li></ul><ul><li>Can they work with us internationally (now or in the future) </li></ul><ul><li>How do they propose to evaluate the effectiveness of the campaign? </li></ul>
  38. 38. Selecting an agency <ul><li>What is their attitude to costs? Will they save us money? </li></ul><ul><li>How will they relate to our media buying agency/other specialists? </li></ul><ul><li>How important to them will our account be? Will we be one of their larger accounts, or simply a small fish in a very large pool? </li></ul><ul><li>Will they fit with our ways of working? Are they willing and able to be business partners, or will they simply be suppliers? (This depends – of course – on how we see our own style of dealing with agencies) </li></ul>
  39. 39. Agency Compensation <ul><li>Commissions from media (15%) </li></ul><ul><li>Reduced commission system(<15%) </li></ul><ul><li>Labor-based fee system </li></ul><ul><li>Outcome-based </li></ul>Three Sources