14. The broad framework for
Purchase
A
Allow for dialogue Drive awareness
Conversation Realisation
Facilitate
Reduce Cognitive Dissonance information
Confirmation Investigation
Increase Consumption
Consumption Acquisition
Help acquisition
B
15. The Purchase Funnel -
McKinsey
Spont
Consideration Preference Most Likely
Awareness
Role of Personal Media
Roll of Mass Media
16. The New McKinsey purchase
funnel
New
Brands
BLOGS
Brands
Considered
Trigger Awareness Consideration Loyalty Moment of
=
Purchase
−
Pasive Active
Loyalist Loyalist
Unsatisfied
Validation
17. Assignment 1
Identify the steps in the purchase process
for :
Life Insurance
General Insurance (Health, Motor)
Buying an entry level car
Switches in the House
Paint to be used in the House
Shampoo (for women only)
Non Cola Soft Drink
Mobile Handset
Mutual Fund
Online/ Offline trading
18. Submission Format
Name
Roll No
Age
Gender
Product Category
Education of CWE
Occupation of CWE
Purchase process:
Step 1
Step 2
Step 3..
20. Definition 1
The decisions made by advertisers which
determine the media to use for an
advertising campaign and the most effective
use to make of each medium, within the
limits of the media budget
21. Definition 2
The advertising agency function that
involves the determination of advertising
objectives, advertising strategies, and,
advertising tactics relating to the advertising
media to be used by specific clients
22. Definition 3
The series of decisions involved in the
delivery of an advertising message to
prospective purchasers and / or users of a
product or service
25. The Advertiser
The Manufacturer/ Provider
Has something to offer to the consumer which the
consumer may/ may not want
Is focused on maximising the consumption of his
offering at the lowest possible cost and the
highest possible yield
The Client
Doesn‟t usually have consumer expertise – just
69[xb48ASDFG customer expertise
Is not the Media expert usually
25
26. The Media
The Conduit between the Advertiser and
the Consumer
Plays multiple roles for the Consumer –
Entertainer, Informer and Interface
Is neutral to any particular medium
Is focused on providing the maximum
exposure at the minimum cost
26
27. The Consumer
The King!
Is a moving target
Looks for – “Whats in it for me?”
Is not loyal to any brand easily
2
28. Earlier classifications were
simple
Traditional Media
New Media
TV
Internet
Print
Mobile
Radio
Malls/ Multiplexes
Cinema
Social Networking
Outdoors
28
29. The reality
The same media are now trying to fit into multiple
shoes:
TV : FPC = Pay
per view
Print : Specialised
supplements
Radio : Yet to be
splintered in
this manner
Outdoor : Moving the
electronic way
29
30. Media Map
High Measurability
SMS TV
Personal Contact Newspapers
Internet
Radio
Magazines
Personal Mass
Loose Inserts
Direct Mailers
Events
Road Shows
Word-of-mouth
Low Measurability
34. The Genesis…
The first Ad Agency was started as a space
broker in a newspaper by V B Palmer who
started selling space for his client
newspaper on a commission basis
35. The History
Initial Advertising Agencies were traders with
little or no knowledge of either Brand,
Communication or Creative
The focus was on the margins they made while
releasing and not on the brand requirements
Today Ad Agencies hire thousands of people
across the globe and manage Crores of
Rupees
37. Role of Account Management
Maps the Communication needs of the Client
Defines clearly the role of the Agency
Engages the resources of the agency to ensure that all
the work done is suitable for the Clients business
Ensures smooth functioning within and outside the
agency
Communicating the Agency point of view, presenting the
agency work and setting timelines and budgets
Account
Management
38. Role of Account Management
Is ultimately responsible for ensuring that all
Agency work is effective, and, all projects
are completed on time within budgets
Account
Management
39. Role of Creative Services
The creators of the product of the
Advertising Agency – the advertisements
These products can take many forms,but,
collectively they are referred to as “the
creative” or “ the work”
Copywrite
r
Art
Directo
r
Rough
Creative
s
Creative
Services
40. Role of Creative Services
Development of the Creative is done usually
in combinations with a member from “Art”
and “Copywriting”
Creative teams usually work in pairs and
their success/failure is usually together
These teams are supervised by a Creative
Director who guides the team and plays a
major influencer in their work
Creative
Services
41. Role of Creative Services
Once an idea for the medium (say TV) is
ready, a Producer joins the team
The Producer coordinates with all outside
resources to produce finished ads
The Producer estimates costs, writes
contracts and coordinates the production
from start to finish
The Traffic Manager plays a similar role for
Print ads
Also the Traffic Manager is responsible for
getting the finished material to wherever it is
to be delivered
Creative
Services
42. Role of Media Planning
The final conduit of all
communication to the consumers
Media Planners determine how
to best expose the creative
message to the desired audience
They determine what mix of
media would reach the desired
number of consumers
The mix that they determine and
the specific vehicles that they
incorporate form the Media plan
Media
Planning
Buying
43. Role of Media Buying and
Implementation
Media Buyers then take over and buy the
desired media as per the quantity and
quality specifications at the lowest possible
cost
The implementers then execute the plan by
booking space/time and ensuring the
advertising is carried as per the specifics
Media
Planning
Buying
44. Research and Account
Planning
Research done is to specifically answer
certain questions pertaining to the brand:
Do Consumers like the fragrance?
Which packaging is more appealing?...
While Research was not otherwise a domain
of the Ad agency, with the Advent of Account
Planning it became an integral part of the
agency
Account
Planning
45. Research and Account
Planning
AP takes a more insightful look into
consumer attitudes and behaviour
AP‟s weave facts into compelling stories
Account
Planning
51. The McKinsey Purchase funnel
Spont Purchase
Preference Consideration Most Likely
Awareness
Spontaneous Bank ranked Amongst the The most Main bank for
recall of Bank among Top 3 Top 2 preferred preferred bank the customer
SBI 67 46 36 22 19
ICICI 55 41 30 16 08
HDFC 39 23 16 06 04
UTI 14 08 05 03 02
Spontaneous Awareness as provided by Client
52. Inferences
Conversion rate best for SBI – 28%
Our conversion rate matches ICICI
Hence, need to focus on Spont awareness
to grow our share of subscribers
53. Implications for conversion
Spont Purchase
Preference Consideration Most Likely
Awareness
Spontaneous Bank ranked Amongst the The most Main bank for
recall of Bank among Top 3 Top 2 preferred preferred bank the customer
• Weak • Lack of • Lack of • Competitor‟s • Poor experience
branding awareness of interaction brand equity at point of sale
brand benefit involvement
• Lack of with the brand • Lack of positive • Dissatisfaction at
brand- • Unconvincing W-o-M the „last mile‟
image advertising contact point
Spontaneous Awareness as provided by Client
54. Implications for media
Spont Purchase
Preference Consideration Most Likely
Awareness
Spontaneous Bank ranked Amongst the The most Main bank for
recall of Bank among Top 3 Top 2 preferred preferred bank the customer
Role of mass media
Boosting Awareness and Role of personal media
Preference by building
Differentiation Relevance Building Consideration and
for the brand Most Likely by enabling
interaction with the brand
Corporate Image advertising (touch feel) across points of
to be the driver contact with the core TGs
TV, Print, Outdoor, Radio Internet, SMS, Direct Non-
conventional media to activate
inquiries
60. Creative Department
Creative
Director
Team 1 Team 2
Copywriter Visualiser Copywriter Visualiser
61. Production Department
Studio
Production
Head
Studio Production
Head Head
Studio Artist Studio Artist Production Production
1 2 Assistant 1 Assistant 2
63. Media Department
Vice
President
Business
Director
Media Media
Director - Director -
Planning Buying
64. Project Assignment
•Client details business objectives to the Client Servicing person
•Together define the role for advertising
•Client Servicing Person in turn briefs the people from the four departments
Strategic Development
•Agency team analyses the task in a group
•The goal of strategic development is to find a compelling story about the product
(referred to as the positioning) and a unique message for the advertising creative (the
creative brief)
Media Development
•Typically initiated alongside Strategic Development
•Details TG , Market Prioritisation, Media Mix, Media weights etc
•Media Plan is devised to reach these consumers
Creative Development
•Creative team develops rough concepts of the ad
•After the inputs of the Creative Director, the Account Manager and the Account
Planners inputs are also taken for fine tuning
•Creative Work is then presented to the Client on whose approval the Creatives are
finally converted/produced into actual advertising for release
Campaign Debut
•Traffic (Client Servicing) and Implementation (Media) coordinate to ensure that the ad
reached the respective Media houses in time
66. Full Service Agencies
Can effectively manage advertising
Agencies come in various sizes with various
strengths
Normally global in scale
Offer all services under a single roof
67. Regional Agencies
Where Agencies tie up with local agencies
which belong to the region and advertise in
the region, eg. Mudra for DDB, Rediffusion
for DYR, RK Swamy for BBDO
68. Boutiques
Focus almost exclusively on the Creative
function
Do not provide Media and Strategic inputs
69. Media Agencies
Specialise in the planning and buying of all
types of media
Increasingly, these agencies are formed
from the combination of media departments
of multiple full-service agencies
By joining their purchasing power, media
agencies are often able to command lower
rates from TV networks and magazine
publishers and pass the savings on to their
clients
70. Industry Specialty Agencies
Concentrate on particular industries with
unique set of advertising related issues
Pharma and IPO‟s are two such examples
72. Principles of Client Agency
Relationships
Agency will not handle a competing brand or a close
substitute
Client will not give his business to other agencies
Client will approve all the expenses before any
activity is undertaken which involves a cost for the
agency
The agency keeps the media commission for itself,
and, the Client promises to foot the bill as per the
terms and conditions
Any Cash discount from media should be passed
onto the Client
The Agency is not taken to task for Media lapses in
terms of scheduling, positioning etc
73. Different types of
Relationships
In-house Agency
Mudra started out as an in-house agency
for Reliance
Lintas for HUL
Global alignments
Burnett : McDonalds
DDB : Volkswagon, Lipton
Publicis : Garnier
YR : Colgate
74. Single Client and Agency
VIP : Lowe
Piaggio : RK Swamy
Philips : Mudra
Single Client Multiple Agencies
PG : Leo Burnett, Saatchi
HUL : Lowe, JWT and McCann
77. Some terminologies
Capitalised billings : The total advertising
spend that is handled by the agency
Income : The total income/commission
generated by the agency
Other Income : Income done from other
activities (PR, DM etc)
78. Commission system
15% Commission charged on the Gross
spends
While the client pays Rs 100, the agency
pays the media house only Rs 85
The commission is split between the various
businesses (Creative, Media etc)
79. Retainer System
Works where the business volume is low, or,
is so large and the Client requirements in
terms of Man Hours is not as much
What works very often - a hybrid of the two
81. The procedure
Clients think of switching for various
reasons:
Need for fresh creative thinking
Drop in servicing standards
Internal politics
Inefficient Media handling
International realignments
Fixed period contracts for PSU‟s
82. Steps taken
Identifying the reason for the change
Buy-in from the management
Credentials presentation
Shortlisting the Agencies in the
consideration set
Sending out a detailed brief
Presentation by agencies
Agency selection
83. Many factors play a role…
Agency should be a known one
Agencies are known for their Creativity. Their Creative product must be
known
Agency must have a sound track record and depth of experience
How well the Agency comprehends the Clients problems are also important
The accounts that are handled by the Agency also plays a big role
The Personal Equation of the Client with the agency also matters
Agency ability and what they present
Other unique considerations
84. Evaluation sheet
A. Agency Shortlist
Sl. Design Skill Strategic Total
No. Agency Overall Creativity Relevance Process Costs Ratin
Tot Rati Weig Tot Rati Weig Tot Rati Weig Tot g
Rating Weight al ng ht al ng ht al ng ht al
1 Madison 2 0 4 0 3 0 3 0 0
2 JWT 2 0 4 0 3 0 3 0 0
3 Mudra 2 0 4 0 3 0 3 0 0
4 McCann 2 0 4 0 3 0 3 0 0
5 Lowe 2 0 4 0 3 0 3 0 0
B. Final Selection
Sl. Design Proposal Total
No. Agency Relevance/ Skill Response Rating
Understanding of Brief Method Relevance Time/Speed Team Costs
Tot Rati Weig Tot Rati Weig Tot Rati Weig Tot Ratin Weig Tot Rati Weig Tot
Rating Weight al ng ht al ng ht al ng ht al g ht al ng ht al
1 3 0 5 0 2 0 2 0 4 0 4 0 0
2 3 0 5 0 2 0 2 0 4 0 4 0 0
3 3 0 5 0 2 0 2 0 4 0 4 0 0
Maximum
Weightage: 5
Maximum Rating:
20
85. Evolution of Agencies
From in-house to independent agencies
Fragmentation of functions – media
disassociated itself from the rest of the
business
Further fragmentation – Media splits by type
of media
Re-emergence of the Full Service Agency
90. Key sectors and Advertisers
TV Rs L TV Rs L
Toilet Soaps 73834 Hindustan Lever Ltd 158626
Social Advertisements 58604 Procter Gamble 36208
Shampoos 46779 Reckitt Benckiser (india) Lt 36022
Cellular Phone Service 44073 Cadburys India Ltd 26954
Auto-cars/jeeps 36025 Colgate Palmolive India Ltd 23798
Tooth Pastes 35562 Smithkline Beecham 23362
Washing Powders/liquids 31591 Ponds India 23094
Cellular Phones 31162 Itc Ltd 22701
Fairness Creams 29036 L Oreal India Pvt Ltd 21599
Milk Beverages 28656 Johnson Johnson Ltd 19332
91. Key issues and trends for
each sector :
Trends Issues
Advertising revenue growth propels the Completely addressable digitization still
Television Industry a distant dream for stakeholders
DTH leads growth in distribution segment
High cost of content production
Regional channels are increasing their
share in TV advertising Low ARPU‟s to increase payback time
Broadcasters are rebranding themselves Need to improve measurement tools for
to establish greater connect with younger measuring viewership
audiences
Regional players are increasingly focusing
on the kids channel market
Sports channels boosted by IPL and other
cricketing events, are clocking good
advertising revenues
HD feed gaining ground
93. Key sectors and Advertisers
Print Rs L Print Rs L
Properties/real Estates 93272 Tata Motors Ltd 17613
Social Advertisements 92259 Pantaloons Retail India Ltd 14374
Educ-educational Institutions 90155 Naaptol.com 11713
Independent Retailers 71307 Maruti Udyog Ltd 9453
Auto-cars/jeeps 62625 Lg Electronics India Ltd 8856
Events 36582 Sbi (state Bank Of India) 8511
Corporate/brand Image 36514 General Motors India Ltd 8207
Audited/unaudited Financial R 35251 Samsung India Electronics Lt 7197
Cellular Phones 24467 Dell Computer Corporation 6817
Hospital/clinics 22953 Sony India Ltd 6751
94. Key issues and trends for
each sector :
Trends Issues
Hindi dailies grab the top three spots Fluctuating newsprint costs
and continue to strengthen their position
Ad-edit ratios up on account of
There is a growing trend of hyper profitability pressures
localization in the print media
Subscription schemes increasing
Industry players are unbundling dependence on advertising revenues
products to increase profitability
New media yet to pose a threat to print
New entrants are expanding readership industry
in respective markets
Niche and business magazines show
robust growth
96. Key sectors and Advertisers
Radio Rs L Radio Rs L
Cellular Phone Service 10112 Bharti Airtel Ltd 2525
Properties/real Estates 8704 Vodafone Essar Ltd 2344
Independent Retailers 7803 Tata Teleservices 1991
Social Advertisements 7738 Ministry Of Health Fly Wel 1842
Cellular Phones 3956 Pantaloons Retail India Ltd 1808
Events 3751 Research In Motion Limited 1490
Auto-cars/jeeps 3462 Bennett Coleman Co Ltd 1383
Jewellery 3446 Johnson Johnson Ltd 1349
Educ-educational Institutions 3235 Nokia Corporation 1291
Insurance-life 2636 Life Insurance Corp Of India 1173
97. Key issues and trends for
each sector : 2010
Trends Issues
Telecom players and handset Lack of measurement and research
manufacturers are increasing their
spend on radio E-auction methodology for Phase III
auction
Improvement in margins is expected
with favourable legislation Differentiation of content and channel
offerings
Innovation will drive the industry as the
competition is set to increase Royalty payment between music
companies and radio industry
Increasing FM-enabled mobile phones
are driving radio growth in India
99. Key issues and trends for
each sector : 2010
Trends Issues
Cricket craze led to multifold growth in web Indian wariness of online shopping
traffic
Need for effective means to monetize
Social media is showing promising signs
content
for online advertising
3G has arrived, but is yet to make an Lack of trust in online medium and
impact in mobile advertising and the effective measurement tools
internet market
Internet users in rural India have grown
Travel sites push e-commerce growth on
the fast track
online ad-sales have been outsourcing to
specialised agencies
102. Key issues and trends for
each sector : 2010
Trends Issues
Telecom, BFSI, EM and FMCG were Measurement mechanism
among the top advertisers for 2010
Highly unorganised industry
Focus is shifting from the number of
screens to the quality and quantity of
audience Lack of quality properties
Digital OOH is the next growth medium for
the industry
OOH players are offering innovative and
customised solutions to advertisers for
specific target audiences
OOH players are focusing on ROI rather
than on increasing the number of
properties
105. Education of Chief Wage Earner / Main Income Earner (MIE)
Lit. no Some Grad./ Grad./
sch/school College Post- Post-Grad.
OCCUPATION Illiterate Sch 5-9 yrs SSC/HSC
upto 4 but not Grad. Profession
years Grad. General al
Unskilled Workers E2 E2 E1 D D D D
Skilled Workers E2 E1 D C C B2 B2
Petty Traders E2 D D C C B2 B2
Shop Owners D D C B2 B1 A2 A2
Businessmen/ Industrialists with no
of employees
: None D C B2 B1 A2 A2 A1
1-9 C B2 B2 B1 A2 A1 A1
10 + B1 B1 A2 A2 A1 A1 A1
Self employed Professional D D D B2 B1 A2 A1
Clerical / Salesman D D D C B2 B1 B1
Supervisory level D D C C B2 B1 A2
Officers/ Executives Junior C C C B2 B1 A2 A2
Officers/Executives Middle/ Senior B1 B1 B1 B1 A2 A1 A1
