MAKAUT MBA Sem 3 Lecture Seriez

1. Lecture 2
Advertising Industry
Prof. (DR.) R. Bakshi

2. Caveat
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Bakshi, created for teaching - learning purpose only and is based on
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3. Advertisers
A person, organization or company that places
advertisements in order to target customers.

4. Advertising agencies
• An advertising agency, often referred to as a creative agency, is a
business dedicated to creating, planning, and handling advertising
and sometimes other forms of promotion and marketing for its clients.
An ad agency is generally independent from the client; it may be an
internal department or agency that provides an outside point of view
to the effort of selling the client's products or services, or an outside
firm. An agency can also handle overall marketing and branding
strategies promotions for its clients, which may include sales as well.
• Typical ad agency clients include businesses and corporations,non-
profit organizations and private agencies. Agencies may be hired to
produce television commercials, radio commercials, online
advertising, out-of-home advertising, mobile marketing, and Augmented
reality AR advertising, as part of an advertising campaign.

5. An Ad Agency Example O&M

6. Evolution of Agency
• Space Broker
• Standard Service
• Agency Recognition
• Marketing service
• Full Service

7. Client Relationship
• Excellence
• Know the trade / business
• Be in action with partners
• Honest
• Crazy ideas
• Loyalty
• Contract and Secrecy
• Good options
• Involvement

8. Types of Advertising Agency
• Full serviceAgencies.
• InteractiveAgencies.
• Creative Boutiques.
• Media Buying Agencies.
• In-House Agencies.

9. Departments inside the organization
• Client Services
• Production
• Account Management
• Credit Collection
• Finance
• Adminiatration
• Creative
• Film and Radio
• Internet and Digital Media

10. Support Organizations
• Media (Print, Radio, Internet, Social)
• Producers
• Artists
• Traffic
• Legal
• Labs

11. Role and of ad agencies
• Booking of Space
• Designing the Copy
• Collecting feedback
• Adjusting
• Distribution to Media
• Public Relations

12. Structure

13. Functions
• Attracting clients,
• Research function,
• Advertising planning,
• Creative function,
• Media selection,
• Advertising budget,
• Coordination,
• Sales promotion,
• Marketing research,
• Non-advertising functions, and
• Public relations.

14. Agency compensation
• The Commission System
• Fee Arrangements
• Cost-Plus Agreements
• Incentive-Based Compensation
• Percentage Charge
• Retainor
• Share of Profit based on Project
• Blended Models

15. Evaluation
• The financial assessment focuses on how the agency conducts its
business to verify costs and expenses, the number of personnel hours
charged to an account to an account and what payments are made to
media and other outside service suppliers.
• Qualitative assessment explores the agency’s efforts devoted in planning,
developing and implementing the client company’s advertising campaign
and an assessment of the achievements. For a qualitative assessment
even the small things matter; such as a quick turnaround time, creativity
because this is what the agency is in the business of, value add in terms
of giving the client a creative edge by giving them a ‘creative leap’ etc.One
can also evaluate agencies by their track record of losing clients or
acquiring new clients and retaining them.

16. Selection of the Advertising Agency
•Compatibility of the agency team,
•Agency stability,
•Services,
•Credibility
•Problem solving approach.

17. Thank You