1. Advertising Agencies
Presented By:
Prakhar Kumar Pandey
Roll No. 16

2. Definition
“An organization that provides a variety of advertising related services to
clients seeking assistance in their advertising activities.”
- American Marketing Association
Full-service advertising agency engages in the planning and administration of
advertising campaigns, including setting advertising objectives, developing
advertising strategies, developing and producing the advertising
messages, developing and executing media plans, and coordinating related
activities such as sales promotion and public relations.
Limited-service advertising agency concentrates on one of the major
advertising agency functions such as developing and producing advertising
messages or media plans.

3. 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 communication

4. Functions
•
•
•
•
Account management
Creative
Media planning and placement
Research

5. Organisational Structure
Board of
Direct ors
[ Chairm an/CEO]
President
[ COO]
Other Market ing
Com municat ions
Services
[ PR, etc.]
Strat egy
Review Board
[M
anagment
Com mitt ee]
Off ice M
anagement
[ Pers onnel,
Accounting,
Legal, etc.]
Account Mgmt .
Direct or
Creat ive
Exec CD
Research
Direct or
M
anagement
Supervis or
Ass ociate
Creat ive
Direct or
Project
M
anagers
Ass ociate
M
edia
Direct or
Account
Execut ive
Creat ive
Group:
Research
Ass is tants
M
edia
Supervis or
Ass t. Account
Execut ive
Copy Spvr. &
Copywrit ers
Broad
cast
Production
Traff ic
Art Supervisor
& Art Direct ors
Print
Production
M
edia Dept .
Direct or
M
edia
Planner
M
edia
Buyer
Analys ts

6. Account Management
• Responsible for understanding...
– the client’s business
– the client’s marketing needs
– strategy development
• Representing client point of view within the agency

7. 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

8. 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.

9. 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 strategic goals
– Help find solutions.

10. Auxiliary agency functions
• Account planning
• Strategy/creative review board
• Office management
– Human resources
– Legal services
– Accounting
– Recruitment

11. 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

12. Agency Commission
• Media commission system
– 15% media commission
• Adjustable commission rates
– Negotiate to match client budget
• Markups-production & service
– Add a percentage markup to costs
– 17.65% of net = 15% of gross

13. Types of fees
•
•
•
•
Fixed fee (retainer)
Cost-plus fee
Performance fee
Commission

14. Incentives
• 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

15. Thank You!