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Advertising Agency

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Advertising Agency

  1. 1. Role of Advertising agency and other marketing communication organization
  2. 2. Organization of Advertising <ul><li>Purpose is to communicate effectively </li></ul><ul><li>Five participants of IMC process </li></ul><ul><li>Advertiser (Client) </li></ul><ul><li>Agency </li></ul><ul><li>Media organizers </li></ul><ul><li>Marketing Communications Specialists </li></ul><ul><ul><ul><li>Direct Marketing Agencies </li></ul></ul></ul><ul><ul><ul><li>Sales Promotion Agencies </li></ul></ul></ul><ul><ul><ul><li>Interactive Agencies </li></ul></ul></ul><ul><ul><ul><li>Public Relations Firms </li></ul></ul></ul><ul><li>Collateral services providers </li></ul>
  3. 3. <ul><li>One of the most important element </li></ul><ul><li>Have product/services to offer </li></ul><ul><li>Or some cause to market </li></ul><ul><li>Is one of the final participant to decide about ad. </li></ul>Advertisers (Clint)
  4. 4. <ul><li>Creates /produces/ place the ads. on media </li></ul><ul><li>Different types of agencies </li></ul><ul><li>Full service agency </li></ul><ul><li>Account services </li></ul><ul><li>Marketing services </li></ul><ul><li>Creative services </li></ul>Agency
  5. 5. <ul><li>Basic Function is to provide </li></ul><ul><ul><li>Entertainment </li></ul></ul><ul><ul><li>News </li></ul></ul><ul><ul><li>Knowledge in such a way that it provides an environment to agency or advertisers to buy their time and place </li></ul></ul>Media organizers
  6. 6. <ul><li>are </li></ul><ul><li>Direct marketing agencies </li></ul><ul><li>Sales promotion agencies </li></ul><ul><ul><ul><li>Contests/sweepstakes </li></ul></ul></ul><ul><li>Interactive firms </li></ul><ul><ul><ul><li>Develop websites </li></ul></ul></ul><ul><li>Public relations firms </li></ul>Marketing communication specialist
  7. 7. <ul><li>Services which are been provided to agencies and media organizers </li></ul><ul><li>Like vendors </li></ul><ul><li>Printers etc. </li></ul>Collateral services providers
  8. 8. Organizational Structure of Advertising <ul><li>Three types of structures each have its own adv. & disadv. </li></ul><ul><ul><li>Central system </li></ul></ul><ul><ul><li>Decentralized system </li></ul></ul><ul><ul><ul><li>Separate marketing, sales, advertising and promotion departments for various product lines or businesses of the company. Often use product or brand management system </li></ul></ul></ul><ul><ul><li>In-house system </li></ul></ul><ul><li>Selection of system depends upon </li></ul><ul><ul><li>Size of the orgz. </li></ul></ul><ul><ul><li># of products </li></ul></ul><ul><ul><li>Role of ads in the whole process </li></ul></ul><ul><ul><li>budget </li></ul></ul>
  9. 9. Procter & Gamble uses the brand management system
  10. 10. Basic function of manager in centralized system <ul><li>Planning and budgeting </li></ul><ul><li>Administration and execution </li></ul><ul><li>Coordination with other departments </li></ul><ul><ul><li>Like makting research dept./sales dept./materials regarding POP. </li></ul></ul><ul><li>Coordination with out side agencies and services </li></ul><ul><ul><li>Media buying services/ collateral services agencies etc. </li></ul></ul>
  11. 11. <ul><li>Advantages </li></ul><ul><li>Facilitated communications </li></ul><ul><li>Fewer personnel required </li></ul><ul><li>Continuity in staff </li></ul><ul><li>Involvement of top management/ experience is more </li></ul><ul><li>Disadvantage </li></ul><ul><li>Some times lower level staff can’t understand the over all mkting plan as the responsibility rests on top </li></ul><ul><li>Longer response time </li></ul><ul><li>Inability to handle multiple product line. </li></ul>Client Organization For IMC The Centralized System
  12. 12. Decentralized system or brand mangt. system <ul><li>Advantages </li></ul><ul><li>More flexible in term of promotional programs </li></ul><ul><li>Centralized managerial attention </li></ul><ul><li>Rapid response to the problems. </li></ul><ul><li>Disadvantage </li></ul><ul><li>Sometimes brand mangers are at junior level lack of experience </li></ul><ul><li>Brand manger may have less authority over the execution of plan which they have created. </li></ul><ul><li>Misallocation of funds. </li></ul>
  13. 13. In-house system <ul><li>Advantages </li></ul><ul><li>Cost saving </li></ul><ul><li>More control </li></ul><ul><li>Increased coordination </li></ul><ul><li>Disadvantage </li></ul><ul><li>Less experience </li></ul><ul><li>Less objectivity </li></ul><ul><li>Less flexible </li></ul>
  14. 14. No Fear uses an in-house agency Source: Courtesy No Fear.
  15. 15. Role of Advertising Agency <ul><li>Is a service organization that specializes in </li></ul><ul><ul><li>Developing </li></ul></ul><ul><ul><li>Preparing and </li></ul></ul><ul><ul><li>Executing the promotional programs for its client. </li></ul></ul>
  16. 16. Reasons for using an outside Agency <ul><ul><li>U get highly professional people to work for. </li></ul></ul><ul><ul><li>Artists /writers /singers/media analysis are normally attached with </li></ul></ul><ul><ul><li>Agencies are specialized in certain areas like consumer goods etc. </li></ul></ul><ul><ul><li>U can get an overall image of mkt. very easily against company policies /biases/limitations or we can say it provides us an insight to the industry. an agency may have personnel who have worked in some client related industries. </li></ul></ul>
  17. 17. 4 Types of Agencies <ul><li>Full service agency </li></ul><ul><li>Involved in planning/creative /producing/research/media selection and also in some non advertising services like </li></ul><ul><ul><li>Strategic mkting planning </li></ul></ul><ul><ul><li>Sales promotions </li></ul></ul><ul><ul><li>Sales training </li></ul></ul><ul><ul><li>Trade shows </li></ul></ul><ul><ul><li>Package design </li></ul></ul><ul><ul><li>Public relations programs </li></ul></ul><ul><ul><li>Publicity </li></ul></ul>
  18. 18. Typical Full-Service Agency Organization
  19. 19. 2.Account services <ul><li>Account management is to provide a link b/w client and agencies </li></ul><ul><li>Normally a very experienced and professional person of marketing is involved in such type of arrangement. </li></ul>
  20. 20. 3.Marketing services <ul><li>Have : </li></ul><ul><li>Research departments </li></ul><ul><ul><li>Who is the target audiences </li></ul></ul><ul><ul><li>Who is the ultimate consumers </li></ul></ul><ul><ul><li>Trends of industries </li></ul></ul><ul><ul><li>Consumers habits etc </li></ul></ul><ul><ul><li>Segment analysis etc. </li></ul></ul><ul><li>Media departments </li></ul><ul><li>Must have media profiles </li></ul>
  21. 21. 4.Creative services <ul><li>Responsible for creating and executing ads. </li></ul><ul><li>Copy writers: r the personnel who write ,headlines/subhead lines/body copy. May be involved in basic theme or the big selling idea of the promotional campaigns. </li></ul><ul><li>May have diff. departments </li></ul><ul><ul><li>Art department </li></ul></ul><ul><ul><ul><li>Prepare story board for TV </li></ul></ul></ul><ul><ul><li>Production dept. </li></ul></ul><ul><ul><li>Traffic dept. </li></ul></ul>
  22. 22. Some more types of services <ul><li>Creative boutiques </li></ul><ul><ul><li>Provides only creative services. e.g. supreme with Shoaib Mansoor </li></ul></ul><ul><li>Media Buying Services </li></ul><ul><ul><li>Some people only buy space in media and sell to others </li></ul></ul>
  23. 23. Agency Compensation <ul><li>Diff. Forms of compensation </li></ul><ul><li>Commission from media </li></ul><ul><ul><li>15% from media </li></ul></ul><ul><li>Fixed fee method </li></ul><ul><li>Fee-commission combination </li></ul><ul><li>Cost plus agreement </li></ul><ul><ul><li>Fee basis on the cost of its work </li></ul></ul><ul><li>Pay actual cost+profit margin </li></ul><ul><li>Incentive based </li></ul><ul><li>% charges normally 20-25 % when sub let or purchase services from others. </li></ul>
  24. 24. Example of the Commission System
  25. 25. Why Agencies Lose Clients <ul><li>Poor performance </li></ul><ul><li>Poor communication </li></ul><ul><li>Unrealistic demands </li></ul><ul><li>Personality conflicts </li></ul><ul><li>Personnel changes </li></ul><ul><li>Changes in size </li></ul><ul><li>Conflict of interests </li></ul><ul><li>Changes in strategy </li></ul><ul><li>Declining sales </li></ul><ul><li>Payment conflicts </li></ul><ul><li>Policy changes </li></ul>
  26. 26. How Agencies Gain Clients <ul><li>Referrals </li></ul><ul><li>Solicitations </li></ul><ul><ul><li>Making calls and following them </li></ul></ul><ul><li>Presentation </li></ul><ul><ul><li>People ask agency to come and present itself. </li></ul></ul><ul><li>Presentations </li></ul><ul><li>Public Relations </li></ul><ul><li>Image and Reputation </li></ul>
  27. 27. Awards competitions are a way for agencies to build their reputation
  28. 28. A promotional agency advertises its services

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