Clients and advertising agency

advertising agency management

1. Clients and A dvertising Agency Group Members Lalit Radhika Ankit Mohit Jonathan Namrata Advertising Management

2. Clients Relationship starts when client appoints an advertising agency for making his ad . It continues till the ad agency provides satisfactory services to him .

3. Advertisers( Clients) They are the ones who want to communicate with target audience about products, services, ideas or causes. T hey provide funds that go into media buying and creating advertisements

4. Advertising Agency It  is a business dedicated to creating, planning, and handling advertising and sometimes other forms of promotion and marketing for its clients. Clients include businesses, non-profit organizations and private agencies.

5. Major Advertising Media Magazine Television Newspaper Yellow pages Radio Outdoor Cinema Internet

6. Importance of Advertising Builds awareness of products and brands Creates a brand image Provides product and brand information Increases Sales

7. Centralized Organizational Structure Centralized organizational structures rely on one individual to make decisions and provide direction for the company. Small businesses often use this structure since the owner is responsible for the company’s business operations. 

8. Advertising Department Under C entralised System

9. Planning and Budgeting To develop advertising and other promotion plans. The budget is prepared by the advertising department .

10. Administration and Execution Advertising manager is responsible for the organisation supervision and control of the advertising department . In case an outside ad agency is hired the advertising manager reviews and approves the prepared advertising plans .

11. Coordination within Company Advertising manager has to coordinate with other marketing functions , particularly marketing research and sales They provide valuable information about product features that are valued by customers Research also furnish profiles of product user and non-users which help in media selection .

12. The Decentralized S ystem It is used in large corporations with many products lines and brands. The company has different manufacturing units or divisions. Each brand is assigned to a brand manager, who is responsible for managing the brand ,including planning ,budgeting ,sales and profit performance etc.

13. Brand Management under Decentralized S ystem

14. Category Manager He is responsible for the management of all brands in the entire product category and focuses on the strategic role of different brands to build market share and profit.

15. Category Management S ystem

16. In-house Advertising A gencies It is a team within a company that focuses on the advertisement of their own product. This team is responsible for handling all the aspects of a brand. This agency is owned and operated by its one and only client which is the advertiser.

17. Advertising Agency An advertising agency creates, plans and handles advertising for its clients. It creates an effective and goal oriented advertising campaign.

18. Functions Planning Advertising budget Media selection Creating and producing the advertising Trade shows Public relations

19. Departments Account Services Creative team Marketing service

20. Account Services Most important department. Taking all major decisions related to a client. Responsibilities include locating and negotiating to acquire clients. Works closely with the client to develop advertising strategy.

21. Marketing service Media Planners – Find the best media match for a client. Production Team – Involved in every aspect of the project. Researchers .

22. Creative Team The principle role is to manage the overall advertising campaign for a client. Generating ideas, designing concepts and creating the final advertisement. Consists of specialists in graphic design, film and audio production, copywriting, computer programming.

23. Examples Ogilvy & Mather- Vodafone, Cadbury, and Fevicol . JWT (J Walter Thompson)- Nestle, Ford and Nokia. Mudra Communication- HBO, Philips, Big Bazaar. FCB Ulka Advertising Ltd- Whirlpool, Santoor , and amul . Grey Worldwide (I) Pvt. Ltd- Hero Honda, Maruti Suzuki.

24. Agency Structures (Full Service) Departmental System The organisation of an ad agency into departments grouped around functions and as per the need, specific departments are called up to serve the clients requirements. Group System The organization of an ad agency into a number of little agencies or groups, each with the various people required to meet the needs of the particular clients being served by the group.

25. Other Types of Agencies (Not Full Service) Media Buying Services Independent agencies specializing in media buying. Clients and Ad agencies usually develop their own media plans and then contract media buying services to execute them. Paid a commission or fee. Creative Boutiques Such an agency provides only creative services. They have high creative talent. They are sometimes subcontracted to work for full service agencies. They work on a fee basis.

26. Agency Compensation There are 3 methods used to compensate agencies for their services Commission Negotiated Fee Percentage Charges

27. Commission Most traditional method & Simple and easy to operate The usual commission amount is 15% Commission system is controversial Both put in the same amount of effort. 100,000 vs 500,000 – Agency Earns 15,000 vs 75,000 Critics say that this system encourages agencies to recommend higher media expenditures to increase earnings.

28. Commission The agency prepares a full page magazine ad, the cost of this is 100,000. Once the ad is run the magazine will bill the agency 15% commission. The media(magazine) will also offer a 2% cash discount for early payment which the agency will pass on to the client.

29. Negotiated Fee It is a fixed fee method. Client and ad agency negotiate a flat sum to be paid to the agency for all work done. Agency estimates costs. Client either accepts or negotiates for a lesser amount.

30. Cost Plus Agreement Happens in the case of industrial products. It is used when media billings are relatively low and a great deal of agency services is required by the client. (Preparing of brochures, catalogues and other non commissionable marketing activities) Client agrees to pay the agency fee based on the costs of its work plus some agreed upon profit margin.

31. Incentive Based Compensation Agencies ultimate compensation level will depend on how well it meets the predetermined performance goals.(Agency Accountability) Goals include sales or market shares as well as agency’s creative work. Evaluation of the quality of the agencies creative work. Compensation through media commissions, fees, bonuses, or combinations of these methods.

32. Percentage Charges When the client-agency purchases different services from outside the media/creative-agency is deprived commission hence a mark up of such percentage charges are added to the bill. The services include market research, artwork, printing and other services. The percentage charge varies from 17.65% - 20% For Eg : The agency pays Rs 100,000 for research, 17.65% of this figure is added to reach a total of Rs 117,650.

33. AGENCY EVALUATION There two aspects are involves assessment in performance area Financial qualitative

34. Financial It focused on how is conducts it business to verify cost and expanse Number of personnel houses and what payment is done to media and others qualitative In this effects devoted toward to planning ,developing and implementation

35. Reasons for losing clients Poor communication problem between client and agency Clients dissatisfaction with agency performance with regards to advertising quality or services Personality clashes between the client and agency personnel Unrealistic client demands which reduce the account's profitability for the agency. New managers in client's organisation may want to use an agency with which they already have established ties. Often when agencies merge, there is a conflict of interest as two close competitors may be on the merged agency's account list .

36. Changes in the client's marketing strategy may lead to change of agency. When the company's sales decline, the advertising agency is viewed as unsuitable and the agency is changed. The client may insist upon adopting a compensation method to which the agency disagrees. When some companies or agencies outgrow in size, either may think the other unsuitable and sever the ties.

37. How the Agencies Acquire New Clients The competition among advertising agencies is intense. Most companies already have advertising agencies working for them there are few new entrants in the business arena each year. The advertising budgets of new entrants may not be attractive for large agencies. Smaller agencies may be willing to work with such clients and hope to grow with them. Most new business for large agencies comes from clients who drop their agency and want to hire a new one, or in some cases want to use more than one agency for different product lines. Agencies are always on the look out for new clients leading to competition.

38. Referrals Agencies gain new clients as a result of recommendations from existing satisfied clients, media representatives and often by smaller agencies. This requires maintaining good relations with outside parties .

39. Solicitations This is quite a common method of gaining new clients by smaller agencies The top man calls on prospects and seeks accounts. Most large advertising agencies have a new business development group responsible to seek out and establish contact with new clients, make cold calls, write request letters, and follow up on any leads.

40. Presentations The objective of business development group is to create opportunities so that the agency receive invitation form company to make presentation . The presentation the agency may succeed m selling its services to new clients The agency tell its experience and capabilities and procedures and work demonstrates is outstanding work

41. Client Agency RELATIONSHIP The agency commitments:  What you expect from your agency. 1. Commitment to the success of your business .   The best agency people are 100 percent committed to the same goal.  Their commitment is evidenced by their time, enthusiasm, work, etc 2. Knowledge of your business .   Agency people, particularly the account group, cannot solve your advertising problems unless they have understood and evaluated the market in which you compete. Assess how keen they are in understanding the essence and details of your business and communication strategy objectives.  

42. Client Agency RELATIONSHIP 3 . Open-mindedness .   Good agency people are committed to the importance of a good idea, no matter what its source.   Non Cooperative and opinionated attitude, fixed ideas, etc has no place in a collaborative relationship. 4. Honesty .: Open, Frank, Transparency, Delivery, Billing, etc 5. Leadership from your account people.   Account people are your primary contact and your source of communication within the agency.  

43. Thank You