Advertising Agencies & Functioning

Creativity running in the blood, filled with unpredictable structures as a flat organization, advertising agency are the incubators behind viral successful campaigns. In-house Agency or Outdoor Agency , learn the variations and key operating procedures in an Advertising Agency.

1. Six active participants in modern communication The advertiser The ad agency: Organizations which accept the brief from the advertiser and do a campaign on advertiser’s behalf. Media Owners: Publishing houses Special magazines(industry journal),directories, year books etc. Broadcast media for TV Radio and films. Outdoor advertisers, Organizers of Exhibitions, Event management companies etc . PR Consultants: They operate independently or they can be found in the PR department of an ad agency. Ancillary Services: They are needed to produce/create an advertisement. They render services like studio service, photography service, printing service, gift item producers etc. Free lancers: Copywriters, jingle singers, radio announcers, artists, visualizers, technical writers etc.

2. Ad Agencies Ad agencies are a kind of service organization that specializes in planning and executing advertisement programs for its clients. Why agencies?? Provides specialized services. Holds experience in marketing communication. The agencies are expert in this field Employs specialists like artists, writers, media analysts, researchers and others with specific skills. The agencies make optimum use of these people Many agencies are specialized in a particular type of business. E.g. Mentus Inc., An US based firm. is an agency specializes in IMC for the high tech, E commerce, and bioscience industries. Hiring them leads in saving the costs up to some extent.

3. Functions of an Advertising Agency Planning and Managing Advertising Tasks Creative Work Branding Marketing and Public Relations Role of Advertising Agencies Creating an advertise on the basis of information gathered about product Doing research on the company and the product and reactions of the customers. Planning for type of media to be used, when and where to be used, and for how much time to be used. Taking the feedbacks from the clients as well as the customers and then deciding the further line of action

4. Types of ad agencies Full service agencies : It offers its clients a full range of marketing, communications and promotions services including planning creating and producing the ad, performing research and selecting media. It may also offer non advertisement services like public relations, publicity, direct marketing and sales promotion etc. Internet/Interactive/Digital Agency: These agencies design websites, social media networks and manage blogs. Direct Marketing Agency : These agencies specializes in direct mailing. Creative Boutiques : These agencies create ads only. They perform no task other than developing the actual ad that too in a very creative manner.

5. Media Buying agencies Buys place for advertise and sells it to the advertisers. Sells time in which advertisement will be placed. Schedules slots at different television channels and radio stations. Finally supervises or checks whether the ad has been telecasted at opted time and place or not . In House agencies : Big organizations prefer this kind of structure wherein they have their own ad agency in the organization.

6. Other marketing agencies Promotion agencies: This type of agencies generally with retail and package-goods clients for promotional campaigns that include advertising, coupons, sweepstakes, contests, loyalty programs, merchandising displays, packaging and related; today many promotion agencies are hybrids that will do all other types of marketing. PR Agencies : Media relations, investor relations, and crisis communications. Traditional PR activities include news announcements, article writing and placement, and press conferences or events. PR firms often engage in event marketing, new product launches, website development, social media, and educational initiatives. Also, advertising or marketing agencies often provide PR services. Social Media Agencies: Social media agencies specialize in creating and managing a brands social media networks. Social media agencies command most of the effort including Facebook, Twitter, YouTube, LinkedIn, along with newer networks like Instagram. Beyond profile design and implementation, social media agencies often manage blogs, content research and development, video, and increasingly web design, and search engine optimization.

7. Specialty Agencies : This kind of agencies either focus on a functional marketing discipline or niche market segment. functional specialists include search optimization or paid search, packaging and merchandising, video, or brand name development.  Market or category specialists include different cause marketing, healthcare marketing, and software marketing agencies etc. Design Agencies: Design agencies often perform a variety of services including brand identity, website design, advertising, packaging, brochures and all types of print collateral, and more. Branding agencies: Branding agencies provide a range of services from logos, to brand name development, to packaging, graphic identities, signage, and environmental design (typically retail store design). 

8. Types Of Advertising Agencies . (Summary) Full service Agencies Large size agencies. Deals with all stages of advertisement. Different expert people for different departments. Starts work from gathering data and analyzing and ends on payment of bills to the media people. Interactive Agencies Modernized modes of communication are used. Uses online advertisements, sending personal messages on mobile phones, etc. The ads produced are very interactive, having very new concepts, and very innovative. Creative Boutiques Very creative and innovative ads. No other function is performed other than creating actual ads. Small sized agencies with their own copywriters, directors, and creative people. Media Buying Agencies Buys place for advertise and sells it to the advertisers. Sells time in which advertisement will be placed. Schedules slots at different television channels and radio stations. Finally supervises or checks whether the ad has been telecasted at opted time and place or not. In-House Agencies As good as the full service agencies. Big organization prefers these type of agencies which are in built and work only for them. These agencies work as per the requirements of the organizations.

9. Client Agency Relationship Client-agency relationship commences when an advertised hires an agency to make an ad. Following are the points that needs to be taken care of for cordial relationship between the client and the agency: Meaningful two way communication Focus on long term relationship Honest and sincere efforts towards win-win situation.

10. Agency Compensation Commission from the media (Percentage based) Fixed Commission Fee, cost and incentive based systems Percentage charges

11. 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

12. Advertising Dept. Under Centralized System President Production Finance Marketing Research and develop-ment Human resources Marketing research Advertising Sales Product planning

13. 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

14. 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

15. 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

16. In-House Agencies Benetton’s in-house agency works with outside agencies to develop ads

17. Pros & Cons of In-House Agencies More control Cost savings Better coordination Less objectivity Less experience The In-house Agency + Positive - Negative Less flexibility

18. 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

19. Ad Agencies Have Skilled Specialists Artists Writers Researchers Photographers Media Analysts Other Skills

20. 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

21. 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

22. 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

23. 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

24. 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

25. Methods of Agency Compensation Commissions from media Fee, cost, and incentive-based systems Percentage charges Compensation Methods

26. Evaluating Agencies Financial Audit Qualitative Audit Verify costs, expenses Personnel hours charged Payments to media Payments to suppliers Planning Program development Implementation Results achieved

27. Steps in Selecting an Advertising Agency Set goals. Select process and criteria. Screen initial list of applicants. Request client references. Reduce list to two or three viable agencies. Request creative pitch. Select agency.

28. Size of the agency Relevant experience of the agency Conflicts of interest Creative reputation and capabilities Production capabilities Media purchasing capabilities Other services available Client retention rates Personal chemistry Evaluation Criteria in Choosing an Ad Agency

29. 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

30. Loyalty to a Single Agency Young & Rubicam has handled the Dr Pepper account for over 30 years

31. 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

32. How Agencies Gain Clients Referrals Solicitations Presentations Public Relations Image, Reputation

33. Direct-Marketing Agency Activities Direct mail Database management Research Creative Media services Direct-Marketing Agencies Production Database development, management

34. Direct-Marketing Agency Departments in a typical direct-marketing agency Account management Creative Media Database development and management

35. Sales Promotion Agencies Catalog production Promotional planning Creative research Tie-in coordination Fulfillment Premium design and manufacturing Contest/sweepstakes management

36. 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

37. Functions Performed by Interactive Agencies Web banner ads Search engine optimization Kiosks Interactive Media Creation CD-ROMs Web sites Text messages

38. 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

39. FCB Grid Foote, Cone, Belding matrix This matrix was developed by Foot, Cone & Belding and marries the way consumers approach the purchase process with the selling strategy you should adopt for maximum ROI of your budgets. This is also a good revisit when you feel you have a strong communication idea but feel that the consumer is just not picking it up.