advertising agency management

1. Clients and
Advertising
Agency
GROUP MEMBERS
LALIT
RADHIKA
ANKIT
MOHIT
JONATHAN
NAMRATA
Advertising Management

2. Clients
Relationship starts when client appoints an advertising agency for
making his ad.
It continues till the ad agency provides satisfactory services to him.

3. Advertisers( Clients)
They are the ones who want to communicate with target audience
about products, services, ideas or causes.
They provide funds that go into media buying and creating
advertisements

4. Advertising Agency
It is a business dedicated to creating, planning, and handling
advertising and sometimes other forms of promotion and marketing for
its clients.
Clients include businesses, non-profit organizations and private
agencies.

5. Major Advertising Media
Magazine
Television
Newspaper
Yellow pages
Radio
Outdoor
Cinema
Internet

6. Importance of Advertising
Builds awareness of products and brands
Creates a brand image
Provides product and brand information
Increases Sales

7. Centralized Organizational
Structure
Centralized organizational structures rely on one individual to make
decisions and provide direction for the company.
Small businesses often use this structure since the owner is responsible
for the company’s business operations.

8. Advertising Department Under
Centralised System

9. Planning and Budgeting
To develop advertising and other promotion plans.
The budget is prepared by the advertising department .

10. Administration and Execution
Advertising manager is responsible for the organisation supervision and
control of the advertising department .
In case an outside ad agency is hired the advertising manager reviews
and approves the prepared advertising plans .

11. Coordination within Company
Advertising manager has to coordinate with other marketing functions ,
particularly marketing research and sales
They provide valuable information about product features that are
valued by customers
Research also furnish profiles of product user and non-users which help
in media selection .

12. The Decentralized System
It is used in large corporations with many products lines and brands.
The company has different manufacturing units or divisions.
Each brand is assigned to a brand manager, who is responsible for
managing the brand ,including planning ,budgeting ,sales and profit
performance etc.

13. Brand Management under
Decentralized System

14. Category Manager
He is responsible for the management of all brands in the entire
product category and focuses on the strategic role of different brands to
build market share and profit.

15. Category Management System

16. In-house Advertising Agencies
It is a team within a company that focuses on the advertisement of their
own product. This team is responsible for handling all the aspects of a
brand. This agency is owned and operated by its one and only client
which is the advertiser.

18. Advertising Agency
An advertising agency creates, plans and handles advertising for its
clients.
It creates an effective and goal oriented advertising campaign.

19. Functions
Planning
Advertising budget
Media selection
Creating and producing the advertising
Trade shows
Public relations

20. Departments
Account Services
Creative team
Marketing service

21. Account Services
Most important department.
Taking all major decisions related to a client.
Responsibilities include locating and negotiating to acquire clients.
Works closely with the client to develop advertising strategy.

22. Marketing service
Media Planners – Find the best media match for a client.
Production Team – Involved in every aspect of the project.
Researchers .

23. Creative Team
The principle role is to manage the overall advertising campaign for a
client.
Generating ideas, designing concepts and creating the final
advertisement.
Consists of specialists in graphic design, film and audio production,
copywriting, computer programming.

24. Examples
Ogilvy & Mather- Vodafone, Cadbury, and Fevicol.
JWT (J Walter Thompson)- Nestle, Ford and Nokia.
Mudra Communication- HBO, Philips, Big Bazaar.
FCB Ulka Advertising Ltd- Whirlpool, Santoor, and amul.
Grey Worldwide (I) Pvt. Ltd- Hero Honda, Maruti Suzuki.

25. Agency Structures (Full
Service)
Departmental System
The organisation of an ad agency into departments grouped around functions
and as per the need, specific departments are called up to serve the clients
requirements.
Group System
The organization of an ad agency into a number of little agencies or groups, each
with the various people required to meet the needs of the particular clients
being served by the group.

26. Other Types of Agencies (Not
Full Service)
Media Buying Services
Independent agencies specializing in media buying. Clients and Ad agencies usually
develop their own media plans and then contract media buying services to execute
them. Paid a commission or fee.
Creative Boutiques
Such an agency provides only creative services. They have high creative talent. They
are sometimes subcontracted to work for full service agencies. They work on a fee
basis.

27. Agency Compensation
There are 3 methods used to compensate agencies for their services
1. Commission
2. Negotiated Fee
3. Percentage Charges

28. Commission
Most traditional method & Simple and easy to operate
The usual commission amount is 15%
Commission system is controversial
Both put in the same amount of effort.
100,000 vs 500,000 – Agency Earns 15,000 vs 75,000
Critics say that this system encourages agencies to recommend higher media
expenditures to increase earnings.

29. Commission
The agency prepares a full page
magazine ad, the cost of this is
100,000. Once the ad is run the
magazine will bill the agency 15%
commission.
The media(magazine) will also offer
a 2% cash discount for early
payment which the agency will pass
on to the client.

30. Negotiated Fee
It is a fixed fee method.
Client and ad agency negotiate a flat sum to be paid to the agency for all
work done.
Agency estimates costs.
Client either accepts or negotiates for a lesser amount.

31. Cost Plus Agreement
Happens in the case of industrial products.
It is used when media billings are relatively low and a great deal of
agency services is required by the client. (Preparing of brochures,
catalogues and other non commissionable marketing activities)
Client agrees to pay the agency fee based on the costs of its work plus
some agreed upon profit margin.

32. Incentive Based Compensation
Agencies ultimate compensation level will depend on how well it meets the
predetermined performance goals.(Agency Accountability)
Goals include sales or market shares as well as agency’s creative work.
Evaluation of the quality of the agencies creative work.
Compensation through media commissions, fees, bonuses, or combinations of
these methods.

33. Percentage Charges
When the client-agency purchases different services from outside the
media/creative-agency is deprived commission hence a mark up of such
percentage charges are added to the bill.
The services include market research, artwork, printing and other services.
The percentage charge varies from 17.65% - 20%
For Eg: The agency pays Rs 100,000 for research, 17.65% of this figure is
added to reach a total of Rs 117,650.

34. AGENCY EVALUATION
There two aspects are involves assessment in performance area
1. Financial
2. qualitative

35. Financial
It focused on how is conducts it business to verify
cost and expanse
Number of personnel houses and what payment is
done to media and others
qualitative
• In this effects devoted toward to planning
,developing and implementation

36. Reasons for losing clients
1. Poor communication problem between client and agency
2. Clients dissatisfaction with agency performance with regards
to advertising quality or services
3. Personality clashes between the client and agency personnel
4. Unrealistic client demands which reduce the account's
profitability for the agency.
5. New managers in client's organisation may want to use an
agency with which they already have established ties.
6. Often when agencies merge, there is a conflict of interest as
two close competitors may be on the merged agency's
account list.

37. 1. Changes in the client's marketing strategy may lead to change of agency.
2. When the company's sales decline, the advertising agency is viewed as
unsuitable and the agency is changed.
3. The client may insist upon adopting a compensation method to which the
agency disagrees.
4. When some companies or agencies outgrow in size, either may think the
other unsuitable and sever the ties.

38. How the Agencies Acquire
New Clients
The competition among advertising agencies is intense.
Most companies already have advertising agencies working for them
there are few new entrants in the business arena each year.
The advertising budgets of new entrants may not be attractive for large
agencies.
Smaller agencies may be willing to work with such clients and hope to grow
with them.
Most new business for large agencies comes from clients who drop their
agency and want to hire a new one, or in some cases want to use more than
one agency for different product lines.
Agencies are always on the look out for new clients leading to competition.

39. Referrals
Agencies gain new clients as a result of recommendations from existing
satisfied clients, media representatives and often by smaller agencies.
This requires maintaining good relations with outside parties.

40. Solicitations
This is quite a common method of gaining new clients by smaller
agencies
The top man calls on prospects and seeks accounts.
Most large advertising agencies have a new business development
group responsible to seek out and establish contact with new clients,
make cold calls, write request letters, and follow up on any leads.

41. Presentations
The objective of business development group is to create opportunities
so that the agency receive invitation form company to make
presentation.
The presentation the agency may succeed m selling its services to new
clients
The agency tell its experience and capabilities and procedures and work
demonstrates is outstanding work

42. Client Agency RELATIONSHIP
The agency commitments: What you expect from your agency.
1. Commitment to the success of your business. The best agency people
are 100 percent committed to the same goal. Their commitment is
evidenced by their time, enthusiasm, work, etc
2. Knowledge of your business. Agency people, particularly the account
group, cannot solve your advertising problems unless they have understood
and evaluated the market in which you compete. Assess how keen they are
in understanding the essence and details of your business and
communication strategy objectives.

43. Client Agency RELATIONSHIP
3. Open-mindedness. Good agency people are committed to the
importance of a good idea, no matter what its source. Non
Cooperative and opinionated attitude, fixed ideas, etc has no place in a
collaborative relationship.
4. Honesty.: Open, Frank, Transparency, Delivery, Billing, etc
5. Leadership from your account people. Account people are your
primary contact and your source of communication within the agency.

44. Thank You