Advertising agencies provide services like marketing analysis, creative development, media planning, and account management through departments like creative, media, research, and account services. Agencies make money through commissions typically around 15% of costs, fees based on hourly rates, and potential incentives tied to performance goals. Large agencies have also established their media departments as separate profit centers and many clients now view media as a separate service from creative and strategy.

1. advertising agencies

2. structure & organization
what agencies do.
and how they’re organized
to do it.

3. 7 primary services:
complete a marketing analysis
develop an advertising plan
prepare a creative strategy
create advertising executions
develop and implement a media plan
handle billing and payments
integrate other marketing communications

4. 4 functions of full-service agencies
account management
creative
media planning and placement
research

5. agency organization chart
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Broadcast Print Analysts
Production Production
Traffic

6. account management
liaison between agency and client
responsible for understanding...
the client’s business
the client’s marketing needs
strategy development
representing client point of view
within the agency

7. account management
A c c o u n t M g m t.
D ir e c to r
account management
director
M a n a g e m en t.
S u p e r v is o r
management supervisor
A ccount
S u p e r v is o r account supervisors
A ccount account executives
E x e c u tiv e
assistant account execs
A sst. A c c o u n t A ccoun t
E x e c u tiv e C o o r d in a to r
account coordinators
Traffic
traffic

8. creative department
responsibility
the creative department is responsible
for creating and producing the print and
broadcast advertising
strategy is key
good creative work is always guided by a
creative strategy that sets forth goals to
be accomplished and key message
points to be relayed

9. creative department
S tr a te g y
R e v ie w
B oard
executive & group creative
E x e c u tiv e
directors
creative director
C r e a tiv e
D ir e c to r (E C D )
C r e a tiv e
D ir e c to r (C D ) associate creative director
A s s o c ia te
C r e a tiv e
D ir e c to r (A C D )
copywriters
C r e a tiv e
art directors
G roup:
C opy Spvr. & A r t S u p e r v is o r
broadcast producers
print production managers
C o p y w r ite r s & A r t D ir e c to r s
Broadcast Print
Production Production
Traffic
traffic coordinators

10. media department
The media department has two main
functions - planning and buying.
The planning group handles more
strategic marketing and media issues.
The buying group handles media
negotiations and implementation.

11. media department
media director
M e d ia
D ir e c to r
A s s o c ia te
M e d ia
associate media directors
D ir e c to r
media supervisors
M e d ia
media planners
S u p e r v is o r
Media
M e d ia M e d ia Plan
P la n n e r B uyer media buyers
Analysts
media analysts

12. big changes in the
media department
mega-agency media departments
have now become profit centers
agencies have set up their media
departments as free-standing units
many large clients now look at media
as a separate service

13. research department
interpret market environment
gather and analyze research data.
primary and secondary techniques
determine consumer needs/perceptions
understand problems
advise how ads can meet Research
strategic goals Report
help find solutions

14. research department
R esea rch
D ir e c to r research director
P r o je c t
M anagers research project managers
R esea rch research assistants
A s s is ta n ts
Research
Outside outside research Report
Research
Suppliers specialists

15. auxiliary agency functions
account planning
strategy/creative review board
office management
human resources
legal services
accounting
recruitment

16. 3 ways agencies make money
commissions
usually 15% of gross costs
fees
usually based on negotiated hourly rate
incentives
still relatively new and problematic
usually based on performance goals

17. agency commissions
media commission system
15% media commission
adjustable commission rates
negotiate to match client budget
sliding scale
markups-production & service
add a percentage markup to costs
17.65% of net = 15% of gross

18. 4 types of fee systems
fixed fee (retainer)
cost-plus fee
performance fee
hybrid fee &
commission

19. incentives
in theory, a good way to work
get paid based on how well you do, not
how much you bill
in practice, difficult to implement
if client makes final decision (instead of
agency), how can agency be responsible
for final results?
results based on many factors, such as
competitive efforts, not just advertising

20. new business
three primary sources
“The critical objective business
build existing client’s and role
of any ad agency is IMC services
add and sell new gaining new
business.”
solicit new accounts
two ongoing problems
“spec” work
teams “walking” with accounts

21. things to think about:
why might you be interested in
going into the agency business?
what might keep you from choosing
a career in the agency business?