Relation to text This slide relates to material on pp. 69-71 of the text and Figure 1-3. Summary Overview The various participants in the IMC process are shown on this slide. These include: Advertiser (client) – the company or organization that has the product, service or cause to be marketed and provides the funds to pay for the IMC program Advertising Agency – a firm that specializes in the creation, production, and often the placement of the communications messages and may provide other services to facilitate the IMC process Media Organizations – companies that provide information and entertainment to subscribers, viewers, listeners and/or readers and in which marketers can purchase time or space to deliver their advertising and promotion messages Marketing Communication Specialist Organizations – companies that provide specialized marketing communication services that are used as part of the IMC process. These include Direct response agencies Sales promotion agencies Public Relations Firms Interactive Agencies Collateral Services – companies that provide a wide array of support functions used by advertisers, agencies, media organizations, and specialist organizations such as marketing research, package design, photography, video production and other services Use of this slide This slide can be used to introduce the various participants in the IMC process and provide a brief overview of their roles. More detailed discussion of the role and responsibilities of each participant will follow.
Relation to text This slide relates to the material on pp. 71-72 of the text and Figure 3-2. Summary Overview Companies have several options as to how they choose to organize for advertising including the centralized, decentralized and in-house systems. This slide shows how companies often organize for advertising under a centralized system. Under this system various organizational activities are divided along functional lines with marketing being a key area along with production, finance research and development and human resources. Within marketing, activities are also divided along functional lines with advertising placed alongside other areas including marketing research, sales, and product planning. Use of this slide This slide can be to show how companies often organize under a centralized system whereby an advertising or marketing communications manager assumes responsibility for supervising all promotion activities. The various activities of an advertising or marketing communications manager should be discussed including: Planning and budgeting Administration and Execution Coordination with other departments Coordination with outside agencies and services
Relation to text This slide relates to the material on pp. 71-72 of the text and Figure 3-5. Summary Overview This slide presents the pros and cons of using a centralized system to organize for advertising and promotion. The positive aspects of this system include: Better communications as developing and coordinating the advertising and promotional program from one central office facilitates communication Fewer personnel are needed as fewer people are involved in advertising and promotion program decisions which facilitates decision making Continuity of staff often results as there may be less turnover and more experience among those involved in managing the advertising and promotion program The negative aspects of centralization include: Less goal involvement as it may be difficult for the advertising manager to become involved with the marketing strategy and goals for the company or brand Longer response time as the advertising department may be slow in responding to the specific marketing problems or needs of the company or brand Inability to do multiple product lines as the company becomes larger and adds more products, services and/or brands and there is more demand on the department Use of this slide The text discusses the pros and cons of the various systems used to organize for advertising and promotion. This slide summarizes the pros and cons of the centralized system.
Relation to text This slide relates to the material on pp. 72-75 of the text and Figure 3-3. Summary Overview This slide shows how companies often organize for advertising and promotion under a decentralized brand management system, which is often used by large companies with multiple divisions and many different products and brands. Under this system responsibility for responsibility for the various functions associated with IMC are assigned to a product or brand manager who works closely with the outside advertising agency as well as other marketing communication specialists. The brand manager may also work with other areas of marketing within the firm such as sales, marketing research and the advertising/promotion department. Use of this slide Companies have several options as to how they choose to organize for advertising including the centralized, decentralized and in-house systems. This slide can be to show how companies often organize under a decentralized system whereby a brand manager assumes responsibility for supervising all promotion activities and works closely with the company’s marketing services group as well as an outside advertising agency and other marketing communication specialist organizations.
Relation to text This slide relates to the material on pp. 72 to 75 of the text and Figure 3-5. Summary Overview This slide presents the pros and cons of using a decentralized system to organize for advertising and promotion. The positive aspects of this system include: Concentrated managerial attention for a product or brand Rapid response to problems and opportunities facing a brand Increased flexibility allowing for adjustments to various aspects of the advertising and promotional program The negative aspects of decentralization include: Ineffective decisions since brand managers often lack training and experience in advertising and promotion Internal conflict as brand managers compete for top management attention and marketing resources Lack of authority by brand managers over the functions needed to implement and control the plans they develop Use of this slide The text discusses the pros and cons of the various systems used to organize for advertising and promotion. This slide summarizes the pros and cons of the decentralized brand manger system. Brand management is very common among many large companies and attention should be given to issue involved with the use of this system for effective management of the IMC function.
Relation to text This slide relates to the material on pp. 75-76 and Figure 3-5 Summary Overview This slide presents the pros and cons of using an in house agency to organize for and handle a company’s advertising and promotion. Advantages of this system include: Cost savings that result since media commissions that would go to an outside agency go to the in- house agency More control over the advertising function since it is handled within the company rather than by an outside agency Better coordination of advertising and promotion with the firm’s other marketing activities Negative aspects of this system include: Less advertising experience than is available from an outside agency with has a variety of specialists in various areas of advertising Less objectivity since those working for an in-house agency are part of the company rather than an outside agency Less flexibility as outside agencies can be changed much more easily whereas changes among in-house agency personnel are slower and more disruptive Use of this slide The text discusses the pros and cons of the various systems used to organize for advertising and promotion. This slide summarizes the pros and cons of using in-house agencies. Examples of companies that use in-house agencies should be provided such as Calvin Klein and Radio Shack.
Relation to text This slide relates to material on pp. 75-76 and Exhibit 3-3 of the text. Summary Overview This slide shows an ad for sports apparel company No Fear which is an example of a company that handles most of its advertising and promotion in-house. No Fear does use an outside agency to handle some of its creative work but is an example of a company that continues to create effective IMC programs while maintaining their advertising in-house. Use of this slide This slide can be used to show that despite some of the drawbacks of using in-house agencies as stated in the previous slide, many companies such as No Fear have been successful in creating quality and meaningful advertising that has a positive impact on sales and revenue.
Relation to text This slide relates to material on pp. 78-79 of the text. Summary Overview One of the main reasons outside advertising agencies are used is that they provide the client with the services of highly skilled individuals who are specialists in their fields. A list of these specialists is provided in the slide and includes: Artists Writers Researchers Photographers Media Analysts Specialists with other skills Use of this slide This slide can be used to introduce the various services and specialists of an advertising agency. The expertise and skills of outside advertising agencies is only one reason for choosing to use them. Other reasons are they provide a more objective viewpoint and they have a broad range of experience with a variety of products, companies, and industries.
Relation to text This slide relates to material on pp.79-82 of the text. Summary Overview This slide defines and summarizes the activities of a full service advertising agency. A full service agency offers a full range of marketing, communications, and promotions services. These advertising services include: Planning, creating, and producing advertising campaigns Performing marketing and advertising research Selecting media The non-advertising services performed by a full service agency are: Strategic market planning Sales promotion Trade show materials Package design Public relations and publicity Use of this slide This slide can be used to introduce the wide array of activities performed by a full service advertising agency.
Relation to text This slide relates to Figure 3-7 on p.79 of the text. Summary Overview This slide shows how a full service adverting agency is organized. A full service agency is made up of departments that provide the activities needed to perform the various advertising functions and serve the client. These departments are shown in the slide and include creative services, account services, marketing services, and management and finance. Use of slide This slide can be used to introduce the activities of a full service advertising agency and how it is organized. The activities of these various departments should be discussed.
Relation to text This slide relates to material on pp.79-82 of the text Summary Overview The slide shows the various services of a full service advertising agency. These agency services consist of: Account services – this is the link between the agency and its clients. The account executive is the liaison and focal point of the agency-client relationship. They are responsible for understanding the advertiser’s marketing and promotions needs and interpreting them to agency personnel. Marketing services – includes marketing research and media planning. Marketing research is growing in importance as advertisers realize they need a good understanding of the target audience if they are to effectively communicate. Media departments analyze, select, and contract media sources. Creative services – is responsible for the creation and execution of advertisements. Copywriters and artists are specialists in this department. Additionally there is a production department that coordinates all phases of production of advertising and other creative work. Use of slide This slide can be used to discuss the roles of the various departments in a full service ad agency. There are many activities and many personnel involved in the planning, creating and producing of ads. The coordination of their effort is critical to the success of an IMC program.
Relation to text This slide relates to material on p.83 of the text. Summary Overview Creative boutiques have developed in response to some client’s desire to use only the creative talent of an outside agency while maintaining the other functions internally. Clients seek the help of creative boutiques when an extra creative effort is required or because its own employees do not have sufficient skills in this regard. They can be used: By client companies for creative services only Full service agencies may subcontract for their creative services when busy or when not wanting to add permanent employees Other functions such as advertising planning, research and media buying may be done internally within the company or contracted out Use of slide This slide can be used to explain the role of creative boutiques in planning an IMC program. They usually are hired for their creative talent and are paid on a fee basis. They can be hired directly by a company for their specialized services or by a full service agency when they are very busy or do not want to hire full time employees.
Relation to text This slide relates to material on p. 83 and Exhibit 3-5 of the text. Summary Overview This slide shows an ad from the popular Always campaign that was used by Coca Cola for a number of years and was developed by a creative boutique rather than a traditional full service agency. Edge Creative, the boutique that created this campaign, was a joint venture between Coca Cola, the Disney Company, and three former employees of Creative Artists Agency (a Hollywood talent agency). Use of slide This slide can be used to show the use of creative boutiques in the advertising agency industry. It also can be used as part of a discussion of how some advertisers have been bypassing traditional agencies and tapping into the entertainment industry for creative ideas.
Relation to text This slide relates to material on pp.83-84 of the text. Summary Overview The task of purchasing advertising media has grown more complex as specialized media proliferate. As such, media buying services have found a niche by specializing in the analysis and purchase of advertising time and space. Agencies and clients usually develop their own media strategies and hire independent buying services to execute them. Some of the characteristics of media buying services include: They specialize in buying media time, particularly radio and television time Because the purchase large amounts of time and space, they usually receive large discounts and can save the agency/company money on media purchases. They are paid a fee or commission for their work The agency or client may often develop the media strategy Media buying organizations may be used to implement the media strategy and buy broadcast time and/or space in print publications Use of slide This slide can be used to show the role of media buying services. Their use is growing as more companies look for ways to get more clout from their advertising budgets.
Relation to text This slide relates to material on pp. 85-88 of the text. Summary Overview Because the type and amount of service an agency performs can vary from one client to another, a variety of methods are used to compensate them for their services. Various ways for compensating agencies are shown in this slide and include: Commission method – traditional method whereby the agency receives a specified commission (usually 15%) from the media on any advertising time or space it purchases for its client. Cost-plus agreement – the client pays a fee based on the costs of its work plus some agreed-on profit margin (a percentage of total costs). This method requires careful accounting and detailed records of agency costs Percentage Charges – adding a markup to the various services the agency purchases from outside providers. These may include market research, artwork, printing, photography, etc. and range from 17.65 to 20 per cent. Fee arrangement – the agency charges a basic monthly fee for all of its services. Agency and client agree on work to be done and the amount to be paid. This is the primary method accounting for 68 percent of the compensation plans. Incentive-based – fee is based on how well the agency meets its performance goals such as sales or market share. There is a general movement toward the use of this method by many companies. Use of slide This slide can be used to discuss how advertising agencies are compensated for their work. Changes in the compensation systems have been a result of many companies moving away from traditional mass media in favor of a wider array of marketing tools and an effort to make their agencies more accountable for their work.
Relation to text This slide relates to material on pp.90-92 and Exhibit 3-8 in the text. Summary Overview Many advertising agencies have had a very long relationship with their clients. This slide shows an ad run by Dr. Pepper/Seven Up celebrating its long-term relationship with Young & Rubicam, the agency that has handled Dr. Pepper advertising for over three decades. Use of this slide This slide can be used to show that long-term relationships between client and agency are still found in the advertising industry. However, the industry is changing and long-term relationships are becoming less common.
Relation to text This slide relates to the material on p. 90 which discusses how some companies have terminated their long-term relationships with their agencies. Summary Overview In Chapter 3 we discuss how advertising agencies gain and lose clients and some of the long-standing client/agency relationships that have been terminated in recent years. One of these occurred in 1998 when Levi Straus & Co. terminated its 68 year relationship with Foote, Cone & Belding, San Francisco and transferred its advertising to TBWA/Chiat/Day. This move surprised many people in the advertising industry as FCB had created a number of award-winning and popular campaigns for Levi’s jeans during the ‘80s and ‘90s. The “Elevator Fantasy” spot show here is an example of the excellent creative work done by FCB. Use of this slide This commercial can be used as part of a discussion as to why companies might terminate a long-term relationship with an agency. In this situation, Levi Strauss & Co. had lost market share to other brands and felt that a change in agencies was needed.
Relation to text This slide relates to material on pp. 90-92 of the text which discusses reasons why agencies lose clients. Summary Overview While many successful client-agency relationships last for years, long-term relationships are becoming less common. The various reasons an agency might lose clients are shown on this slide. Some of these are avoidable while others may be beyond the agency’s control. Use of this slide This slide can be used to show reasons why an agency can lose its clients. Understanding these problems can help agencies avoid them.
Relation to text This slide relates to material on pp. 92-93 in the text that discusses how agencies gain new clients. Summary Overview Competition for accounts in the agency business is intense. For most large agencies, most new business comes from clients who already have an agency but decide to change their relationships. Thus, agencies must constantly search and compete for new clients. Some of the ways they do this are through Referrals Solicitations Presentations Public relations efforts Image or reputation Use of this slide Gaining new business is very important to advertising agencies. This slide can be used to show the various ways an agency can gain new business.
Relation to text This slide relates to IMC Perspective 3-3 on pp. 91-92 which discusses Gateway’s search for the right ad agency. Summary Overview IMC Perspective 3-3 discusses how Gateway has changed advertising agencies numerous times in recent years. This slide shows a commercial created by Siltanen/Keehn during its brief tenure as Gateway’s agency in 2001-02. The campaign created by S/K featured Gateway founder and CEO Ted Waitt and a talking Holstein cow. This particular spot is called “Whip It” and features Waitt and the cow cruising down a highway in a tractor trailer singing along to a CD playing Devo's classic song from the early ‘80s. The commercial was designed to promote Gateway’s music lovers’ special which included 500X computer with a CD burner, music software package, speakers, and blank CDs. Use of this slide This slide can be used as part of a discussion as to why companies such as Gateway sometime change agencies very frequently. The advertising developed by S/K was considered to be very good. However, Gateway hired a new agency when a decision was made to position the company as more modern, cool and hip.
Relation to text This slide related to IMC Perspective 3-3 on pp. 91-92 which discusses Gateway’s search for the right ad agency. Summary Overview This slide shows another Gateway commercial created by the Siltanen/Keehn agency for the company. This spot is called “Profile 4” and is a comparative ad that was used by Gateway to take on the highly successful Apple iMac PC. The computer animated spot shows an iMac alongside a feisty Gateway Profile PC and emphasizes the similar look o the two machines. However, at each point of comparison the Profile leapfrogs over the iMac and then does a back flip and issues a raspberry to the iMac as the voice-over notes its lower prices. Use of this slide This slide can be used to show how advertisers often develop new types of ads after changing agencies. This comparative ad was developed by Gateway in response to the success of the iMac and to promote the company’s own new Profile PC featuring an all-in-one design.
Relation to text This slide relates to material on p. 94 of the text which discusses direct response agencies. Summary Overview One of the fastest growing areas of IMC is direct marketing. As the industry has grown, numerous direct response agencies have evolved that offer companies their specialized skills in both consumer and business markets. This slide shows the various services and departments of a direct response agency. Services include: Database management Direct mail Research Departments of a direct response agency include: Media services Creative Production Use of slide This slide can be used to discuss the role of direct response agencies, the types of services they provide and their role in the development of an IMC program.
Relation to text This slide relates to material on pp. 94-95 of the text which discusses Sales Promotion agencies Summary Overview The sales promotion agency is another specialized service used by many marketers. Most companies use sales promotion agencies to develop and administer their sales promotional programs. These firms often work with the client’s advertising and/or direct response agencies to coordinate their efforts with the advertising and direct marketing programs. Services provided by sales promotion agencies include: promotion planning creative work research coordination with advertising premium design contest/sweepstakes development database marketing Use of this slide This slide can be used to discuss the role of sales promotion agencies. These agencies play an important role in the development and implementation of IMC programs, particularly for consumer packaged goods companies that make extensive use of sales promotion.
Relation to text This slide relates to material on p. 95 of the text that discusses Pubic Relations firms. Summary Overview Most large companies use public relations firm. A public relations firm develops and implements programs to manage the organization’s publicity, image, and affairs with consumer and other relevant publics. This slide shows the activities of the PR firm. These include: Strategy development Generating publicity Lobbying Public affairs activities Damage control Image portrayal Program planning Use of slide This slide can be used to show the services provided by public relations firms. As companies adopt an IMC approach to promotional planning, they are coordinating their PR activities with advertising and other promotional areas. They are also integrating PR and publicity into the marketing communications mix to increase message credibility and save media costs.
Relation to text This slide relates to material on pp. 95-96 of the text. Summary Overview With the rapid growth of the Internet and other forms of interactive media, a new type of specialized marketing communications organizations has evolved, the interactive agency. This various functions performed by an interactive agency are shown on this slide. Interactive agencies specialize in development and strategy of the various interactive tools such as web banner ads, web sites, CD-ROMs, and kiosks. They also have expertise in digital technology elements such as audio, video, special effects and animation. Use of slide This slide can be used as part of a discussion of the role of interactive agencies. Many companies are using interactive agencies to take advantage of their expertise in designing, managing, and supporting interactive media.
Relation to text This slide relates to material on pp. 96-97 of the text. Summary Overview The final participants in the promotional process are those that provide various collateral services. These services include marketing research, package design firms, photographers, printer, video production houses, and event marketing services companies. The marketing research companies are widely used to help companies understand their target audiences and gather information that will be of value in designing and evaluating their advertising and promotions programs. The activities provided by marketing research companies include: Program implementation Information application Analysis and interpretation Primary data collection (qualitative and quantitative) Secondary data collection Use of slide This slide can be used to introduce the marketing research agency as a collateral service in the promotional process. The marketing research agency continues to be a valuable resource as companies try to better understand their targeted consumer and how best to meet their needs.
3. organizing for advertising and promotion the role of ad agencies and other mc os