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Chapter 3_organizing for advertising and promotion.pptx
- 1. Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communications Organizations © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 2. Participants in the IMC Process Marketing Communications Specialist Organization Media Organizations Advertiser (Client) Advertising Agency Collateral Services Direct Response Agencies Sales Promotion Agencies Interactive Agencies Public Relations Firms © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 3. Advertising Department Under Centralized System President Production Finance Marketing Research and Develop- ment Human Resources Advertising Marketing Research Sales Product Planning © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 4. Fewer Personnel Better Communications Continuity Of Staff Longer Response Time Less Goal Involvement Better Communications Fewer Personnel Continuity Of Staff Less Goal Involvement Longer Response Time Pros & Cons of Centralization The Centralized System + Positive - Negative Can’t Do Multiple Product Lines © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 5. Decentralized Brand Management System Production Finance Sales Brand Manager Ad agency Brand Manager Ad agency Product Management Sales Promotion Package Design Merchandising Advertising Department Marketing Research Marketing Services Marketing Research and Development Human Resources Corporate © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 6. Competition for Resources Competition for Resources Lack of Experience in IMC Lack of Experience in IMC Rapid Problem Response Concentrated Attention Increased Flexibility Increased Flexibility Rapid Problem Response Concentrated Attention Pros & Cons of Decentralization The Decentralized System + Positive - Negative Lack of Authority © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 8. More Control Cost Savings Better Coordination Less Objectivity Less Experience Less Objectivity Less Experience Better Coordination More Control Cost Savings Pros & Cons of In-House Agencies The In-house Agency + Positive - Negative Less Flexibility © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 9. Most No Fear advertising is done by their in-house agency + © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 10. Comparison of Advertising Organizational Systems
- 11. Artists Ad Agencies Have Skilled Specialists Writers Researchers Photographers Media Analysts Other Skills © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 12. Creating advertising Planning advertising Producing advertising Performing research Selecting media Sales promotion and training Strategic market planning Trade show materials Package design Planning advertising Creating advertising Producing advertising Performing research Selecting media Strategic market planning Sales promotion and training Trade show materials Package design Full-Services Agencies Full Range of Marketing Communication and Promotion Services Non-Advertising Services Public relations and publicity © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 13. Typical Full-Service Agency Organization Writers Art Directors Traffic TV Produciton Traffic Print Production VP Creative Services Account Executive Account Supervision VPAccount Services Media Research Sales Promotion VPMarketing Services Personnel Accounting Finance Office Management VP Management and Finance President Board of Directors © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 14. Services Provided by Agencies The link between agency and client Managed by the Account Executive Research department may design and execute research programs Media department may analyze, select and contract media resources Creation and execution of ads Copywriters, artists, other specialists Marketing Services Account Service Creative Services Marketing Services © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Account Service Agency Services
- 15. The Role of Creative Boutiques Creative Boutiques Provide Only Creative Services Full-Service Agencies May Subcontract With Creative Boutiques Provide Only Creative Services Full-Service Agencies May Subcontract With Creative Boutiques Other Functions Provided by the Internal Client Departments © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 17. Coca Cola’s in-house boutique created this popular spot + © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 18. Specialize in Buying Media, Especially Broadcast Time Agencies and Clients Develop Media Strategy Agencies and Clients Develop Media Strategy Specialize in Buying Media, Especially Broadcast Time Media Buying Can Be Specialized Media Buying Services Media Buying Organizations Implement the Strategy and Buy Time and Space © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 19. Commissions Method Cost-Plus Agreements Percentage Charges Fee Arrangements Incentive-Based Payment Commissions Method Cost-Plus Agreements Percentage Charges Fee Arrangements Methods of Agency Compensation Compensation Methods © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 20. Young & Rubicam has handled Dr. Pepper for over 30 years + © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 21. Foote, Cone & Belding was the agency for Levi’s for 68 years *Click outside of the video screen to advance to the next slide © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 22. Policy changes Poor performance Poor communications Unrealistic demands Personality conflicts Personnel changes Changes in size Conflict of interests Changes in strategy Declining sales Payment conflicts Why Agencies Lose Clients © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 23. Referrals How Agencies Gain Clients Solicitations Presentations Public Relations Image, Reputation © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 24. Gateway Changed Its Advertising After Changing Agencies *Click outside of the video screen to advance to the next slide © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 25. A Change in Strategy Led to a Change in Gateway’s Advertising *Click outside of the video screen to advance to the next slide © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 26. Direct Mail Data Base Management Research Creative Media Services Creative Media Services Research Direct Mail Data Base Management Direct Response Agency Activities Direct Response Agencies Production © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 27. Contest/Sweepstakes Development Contest/Sweepstakes Development Promotion Planning Creative Work Research Coordination With Advertising Premium Design Premium Design Coordination With Advertising Research Creative Work Promotion Planning Data Base Marketing Activities performed by Sales Promotion Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 28. Strategy Development Generating Publicity Lobbying Public Affairs Damage Control Image Portrayal Functions performed by Public Relations Firms Program Planning © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 29. Audio Special Effects Video Web Banner Ads Kiosks Web Sites CD-ROMs Special Effects Video Audio Kiosks CD-ROMs Web Sites Web Banner Ads Functions performed by Interactive Agencies Interactive Media Creation Digital Content Animation © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
- 30. Planning and Implementing Research Planning and Implementing Research Information Application Analysis and Interpretation Primary Data Collection Qualitative & Quantitative Secondary Data Collection Primary Data Collection Qualitative & Quantitative Analysis and Interpretation Information Application Marketing Research Companies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Editor's Notes
- A centralized organizational system is often used when companies do not have many different divisions, product or service lines, or brands to advertise. For example, airlines such as Southwest, American, and JetBlue have centralized advertising or marcom departments, as do major retailers such as Target, Walmart, and Best Buy. Many companies prefer a centralized department because developing and coordinating advertising and marketing programs from one central location facilitates communication regarding the promotions program, making it easier for top management to participate in decision making. At the same time, problems are inherent in a centralized operation. First, it may be difficult for advertising department staff members to understand the overall marketing strategy for the brand, particularly if they are not brought into the planning process. The department may also be slow in responding to specific needs and problems of a product/service or brand. As companies become larger and develop or acquire new products, services, brands, or even divisions, the centralized system may become impractical.
- In large corporations with multiple divisions and many different products, it is very difficult to manage all the advertising, promotional, and other functions through a centralized department. These types of companies generally have a decentralized system, with separate manufacturing, research and development, sales, and marketing departments for various divisions, product lines, or businesses. Many companies that use a decentralized system, such as Procter & Gamble, Unilever, PepsiCo, Google, and Nestle, assign each product/service or brand to a brand manager who is responsible for the total management of the brand, including planning, budgeting, sales, and profit performance. Under this system, the responsibilities and functions associated with advertising and promotions are transferred to the brand manager, who works closely with the outside advertising agency and other marketing communications specialists as they develop the promotional program.2 In a multiproduct or service firm, each brand may have its own ad agency and may compete against other brands within the company, not just against outside competitors. For example, Exhibit 3–2 shows ads for Tide and Gain, which are both Procter & Gamble products that compete for a share of the laundry detergent market. the advertising department is part of marketing services and provides support for the brand managers. The role of marketing services is to assist the brand managers in planning and coordinating the integrated marketing communications program.
- Some companies, in an effort to reduce costs and maintain greater control over agency activities, have set up their own advertising agencies internally. An in-house agency is an advertising agency that is set up, owned, and operated by the advertiser. A major reason for using an in-house agency is to reduce advertising and promotion costs. Companies with very large advertising budgets pay a substantial amount to outside agencies in the form of media commissions or negotiated fees. With an internal structure, these commissions or fees go to the in-house agency.
- Many companies employ what is known as a full-service agency, which offers its clients a full range of marketing, communications, and promotions services, including planning, creating, and producing the advertising; performing research; and selecting media. A full-service agency may also offer nonadvertising services such as strategic market planning; sales promotions, direct marketing, and digital/interactive capabilities; package design; and public relations and publicity.
- Account services, or account management, is the link between the ad agency and its clients. Depending on the size of the client and its advertising budget, one or more account executives serve as liaison. The account executive is responsible for understanding the advertiser’s marketing and promotions needs and interpreting them to agency personnel. He or she coordinates agency efforts in planning, creating, and producing ads. The account executive also presents agency recommendations and obtains client approval. Over the past two decades, use of marketing services has increased dramatically. One service gaining increased attention is research, as agencies realize that to communicate effectively with their clients’ customers, they must have a good understanding of the target audience. The creative services department is responsible for the creation and execution of advertisements. The individuals who conceive the ideas for the ads and write the headlines, subheads, and body copy (the words constituting the message) are known as copywriters. They may also be involved in determining the basic appeal or theme of the ad campaign and often prepare a rough initial visual layout of the print ad or television commercial. Like any other business, an advertising agency must be managed and perform basic operating and administrative functions such as accounting, finance, and human resources. It must also attempt to generate new business. Large agencies employ administrative, managerial, and clerical people to perform these functions.
- Creative boutiques are small ad agencies that provide only creative services and have long been an important part of the advertising industry. These specialized agencies have creative personnel such as writers and artists on staff but do not have media, research, or account planning capabilities.
- Droga5 also has done outstanding creative work for Under Armour including the “I Will What I Want” campaign that won the Grand Prix Award at the 2015 Cannes International advertising festival.