Advertising Organization 1


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Advertising Organization 1

  1. 2. <ul><li>An Advertising Agency or ad agency is a service provider that works for clients to create an effective and goal oriented advertising campaign aimed at representing the Company positively in the eyes of its target customers. </li></ul>
  2. 3. <ul><li>“ An Advertising Agency is an independent organization of Creative people and business people who specialize in developing and preparing marketing plans, advertisements, </li></ul><ul><li>and other promotional tools.’’ </li></ul>
  3. 4. <ul><li>Advertising agencies are outside companies that provide for the marketing and advertising needs of other businesses and organizations. </li></ul><ul><li>Advertising agencies offer a full range of advertising services and advice based on market studies, popular culture and advanced sales techniques </li></ul>
  4. 5. <ul><li>To advertise their products, brands and services to present and prospective customers. </li></ul><ul><li>For planning and creating an effective advertising campaign. </li></ul><ul><li>To take over the process of brand building, strategizing and pushing sales through other promotion techniques like sales promotions etc. </li></ul>
  5. 6. <ul><li>IN HOUSE AGENCY </li></ul><ul><li>FULL-SERVICES AGENCY </li></ul><ul><li>SPECIAL-SERVICES AGENCY </li></ul><ul><li>CREATIVE BOUTIQUES </li></ul><ul><li>SWEAT SHOPS </li></ul>
  6. 7. <ul><li>Location </li></ul><ul><li>Size </li></ul><ul><li>Agency working for competitors </li></ul><ul><li>Image of agency </li></ul><ul><li>Services offered by Ad Agency </li></ul><ul><li>Rates charged </li></ul><ul><li>Creative skills & New ideas </li></ul><ul><li>Past record of Agency </li></ul>Factors to be considered in selecting an Ad Agency:-
  7. 8. <ul><li>Quality & Caliber of Staff </li></ul><ul><li>Financially Sound </li></ul><ul><li>Agency Experience </li></ul><ul><li>So Ad-Agency should not be selected hurriedly. The advertiser should first develop its Job description, decide its needs, Ad-budget, & then look for a suitable agency whose talent. Image, experience & record matches closely with clients description, needs & Budget. </li></ul>
  8. 9. On Departmental basis On Group basis
  9. 10. <ul><li>Client Liaison department </li></ul><ul><li>Research department </li></ul><ul><li>Copy Writing Department </li></ul><ul><li>Art Department </li></ul><ul><li>Media Department </li></ul><ul><li>Accounts Department </li></ul><ul><li>Audio-Visual Ad Production Department </li></ul><ul><li>Marketing Service Department </li></ul><ul><li>Public Relations Department </li></ul><ul><li>Evaluation Department </li></ul>
  10. 11. <ul><li>Planning of Advertising </li></ul><ul><li>Preparation of Advertisement </li></ul><ul><li>Placement & Execution of Advertisement </li></ul><ul><li>Marketing Services </li></ul>
  11. 12. Advertising Agency General Manager Board of Directors Manager planning department Manager marketing services department Manager Ad-placement execution department Manager Ad-preparation department <ul><li>Client’s product analysis </li></ul><ul><li>Market analysis </li></ul><ul><li>Competition analysis </li></ul><ul><li>Media analysis </li></ul><ul><li>Message contents </li></ul><ul><li>Copy Writing </li></ul><ul><li>Copy Designing </li></ul><ul><li>Copy developing </li></ul><ul><li>Message appeals, theme </li></ul><ul><li>Media selection </li></ul><ul><li>Media scheduling </li></ul><ul><li>Ad execution </li></ul><ul><li>Evaluating Ad effectiveness </li></ul><ul><li>Collecting & Paying Dues </li></ul><ul><li>Product services </li></ul><ul><li>Direct mail services </li></ul><ul><li>Sales training services </li></ul><ul><li>Publicity & Public Relations services </li></ul><ul><li>Tele-Marketing </li></ul><ul><li>Merchandising Services </li></ul>
  13. 14. <ul><li>It is the traditional method of compensating Ad-agencies. </li></ul><ul><li>When the agency has sold space or time of media to its client, then media owners pay a commission on their sales to Ad agencies. </li></ul><ul><li>Usually ,this commission is 15% of the amount paid by client to media. </li></ul><ul><li>This commission covers the expenses of services rendered by agency to client & media. </li></ul>
  14. 15. <ul><li>Suppose an Ad agency prepares a full page magazine advertisement for its client. </li></ul><ul><li>The card rate for this page is Rest. 50000/- and the agency is entitled to commission of 15%. </li></ul><ul><li>If there is cash discount of 2% on amount due then cash discount is computed on the amount agency owes to the media i.e. 42,500(not full card rate). </li></ul><ul><li>This cash discount is passed on to the client( advertiser) by Ad-agency. </li></ul>
  15. 16. Media bills agency Agency bills advertiser Cost of full page magazine Ad Less 15% Commission Less 2% cash Discount Agency pays Media Rs. 50,000 (-) 7500 Rs.42,500 Rs. 850 Rs. 41,650 Cost of full page magazine Ad Less 2% Cash Discount on Rs. 42,500(passed on to client) Agency charges from Advertiser Rs. 50,000 Rs. 850 Rs. 49,150
  16. 17. <ul><li>This system is easy to administer. </li></ul><ul><li>Fixed rate of commission. </li></ul><ul><li>It is beneficial for media as it procures large amount of business for media. </li></ul><ul><li>This type of compensation method has promoted non-price competition. </li></ul>
  17. 18. <ul><li>Advertising agency is always tempted to recommend an expensive media to draw a higher commission. </li></ul><ul><li>Fixed percentage of commission can not relate efforts made by agency to rewards earned. </li></ul><ul><li>Media inflation would increase agency’s remuneration which is not fair. </li></ul><ul><li>This system has also resulted in offerings kick-backs by Ad-agency to the directors of big-corporate concerns to procure business & to earn huge commission from media. </li></ul>
  18. 19. <ul><li>This is the second type of compensation method. </li></ul><ul><li>These service charges are added in the form of a fixed percentage to the cost of material & services purchased for the advertiser. </li></ul><ul><li>Normally this percentage is cost +15%. </li></ul>
  19. 20. <ul><li>Agency income is also derived from fees charged by agency form its clients. </li></ul><ul><li>Types of Fees-arrangements:- </li></ul><ul><li>Fixed- Fee Method </li></ul><ul><li>Speculative Method </li></ul>
  20. 21. <ul><li>This method is theoretically more appropriate than commission system as it is directly linked to services provided by the agent. </li></ul><ul><li>It is difficult to operate service charges method as it involves a lot of clerical work to prepare separate cost accounts for each client. </li></ul>