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Organizing for Advertising and Promotion
- 1. Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communication Organizations 3 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
- 2. Participants in the IMC Process Marketing communications specialist organizations Media organizations Advertiser (Client) Advertising agency Collateral services Direct- response agencies Sales promotion agencies Interactive agencies Public relations firms
- 3. Organizing for Advertising and Promotion • The way a company (the client) organizes depends on – Its size – The number of products it markets – The role of advertising and promotion in the marketing mix – The budget – Its marketing organization structure
- 4. Advertising Dept. Under Centralized System President Production Finance Marketing Research and develop- ment Human resources Marketing research Advertising Sales Product planning
- 5. Pros & Cons of a Centralized System Fewer personnel Better communications Continuity Longer response time Less goal involvement The Centralized System + Positive - Negative Impractical for multiple brands, products, divisions More top management involvement
- 6. Decentralized Advertising System Production Finance Sales Brand Manager Ad agency Product Management Sales promotion Package design Marketing services Marketing R & D Human Resources Corporate Brand Manager Ad agency Advertising Dept Marketing Research Merchandising
- 7. Pros & Cons of Decentralization Internal conflicts Ineffective decision making Rapid problem response Concentrated attention Increased flexibility The Decentralized System + Positive - Negative Unequal distribution of funds Lack of Authority
- 8. Test Your Knowledge A major reason why some companies choose to use an in-house agency is to: A) Maintain creative freshness B) Reduce advertising and promotions costs C) Better understand how advertising works D) Win advertising awards that will enhance the image of their brands E) Do all of the above
- 9. In-House Agencies Benetton’s in-house agency works with outside agencies to develop ads
- 10. Pros & Cons of In-House Agencies More control Cost savings Better coordination Less objectivity Less experience The In-house Agency + Positive - Negative Less flexibility
- 11. The Ad Agency’s Role • Reasons for using an ad agency – Highly skilled specialists – Specialization in a particular industry – Objective viewpoint of the market – Broad range of experience
- 12. Ad Agencies Have Skilled Specialists Artists Writers Researchers Photographers Media Analysts Other Skills
- 14. Full-Service Agencies Creating advertising Planning advertising Producing advertising Performing research Selecting media Sales promotions Strategic market planning Direct marketing Interactive capabilities Package design Full range of marketing communication and promotion services Nonadvertising services Public relations and publicity
- 15. Typical Full-Service Agency Organization Writers Art directors TV production Traffic Print production Account Executive Account supervision VP account services Media Research Sales Promotion VP marketing services Personnel Accounting Finance Office management VP management and finance President Board of directors VP creative services
- 16. Services Provided by Agencies Agency Services Research department May include account planners Media dept. obtains media space, time Marketing Services The link between agency and client Managed by the account executive Account Services Creation, execution of ads Copywriter artists, other specialists Creative Services Accounting Finance Human resources New business generation Mgmt & Finance
- 17. The Role of Creative Boutiques Creative Boutiques Provide only creative services Full-service agencies may subcontract with creative boutiques Ability to turn out inventive creative work quickly
- 18. Media Buying Can be Specialized Specialize in buying media, especially broadcast time Agencies and clients develop media strategy Media Specialist Companies Media buying organizations implement the strategy and buy time and space
- 19. Test Your Knowledge Which of the following statements about changes in the way advertising agencies are being compensated is true? A) Most clients do not pay full commissions to their agencies because they prefer fee- or incentive-based systems. B) From the viewpoints of both the client and the agency, the traditional commission system is superior to negotiated commissions. C) Most clients want their agencies to be in total charge of the integrated marketing communications process, so they prefer to compensate them based on media commissions. D)Statements A, B, and C are all true.
- 20. Methods of Agency Compensation Commissions from media Fee, cost, and incentive-based systems Percentage charges Compensation Methods
- 21. Evaluating Agencies Financial Audit Qualitative Audit Verify costs, expenses Personnel hours charged Payments to media Payments to suppliers Planning Program development Implementation Results achieved
- 22. Top Agency Value-Add Activities New media guidance, solutions Integrated disciplines & functions Creative ideas Collaboration Ideas/programs for multi comm. programs Talented people Brand driver evaluation
- 23. Loyalty to a Single Agency Young & Rubicam has handled the Dr Pepper account for over 30 years
- 24. Why Agencies Lose Clients Poor performance Poor communications Unrealistic Client demands Personality conflicts Personnel changes Changes in size of client or agency Conflicts of interest Change in client’s strategy Declining sales Payment conflicts Policy Changes Policy Changes
- 25. How Agencies Gain Clients Referrals Solicitations Presentations Public Relations Image, Reputation
- 26. The Hottest Agency in the Ad Business
- 27. Direct-Marketing Agency Activities Direct mail Database management Research Creative Media services Direct- Marketing Agencies Production Database development, management
- 28. Direct-Marketing Agency • Departments in a typical direct- marketing agency – Account management – Creative – Media – Database development and management
- 29. Sales Promotion Agencies Catalog production Promotional planning Creative research Tie-in coordination Fulfillment Premium design and manufacturing Contest/sweepstakes management
- 30. Functions Performed by Public Relations Firms Strategy development Generating publicity Lobbying Public affairs News releases, communication Research Managing crises Coordination with promotional areas Special events
- 31. Functions Performed by Interactive Agencies Web banner ads Search engine optimizationKiosks Interactive Media Creation CD-ROMs Web sites Text messages
- 32. Website for the California Milk Advisory Board
- 33. Marketing Research Companies Quantitative studies Qualitative research Help clients under- stand target audience
- 34. Pros and Cons of Integrated Services Convenience Greater synergy Single image for product or service Poor communication Budget politics Integrated Services + Positive - Negative No synergy
- 35. Test Your Knowledge Marketing executives say the biggest obstacle to implementing IMC is: A) Lack of management support B) Insufficient budgets C) Lack of people with the right perspective and skills D) Inexperienced ad agencies
- 36. Obstacles to Implementing IMC • Key obstacles – Lack of people with the broad perspective and skills to make it work – Internal turf battles – Agency egos – Fear of budget reductions – Ensuring consistent execution – Measuring success – Compensation