02 ad agencies

8/7/2019 02 Ad Agencies

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ADVERTISING AGENCIESADVERTISING AGENCIES


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enc es ave e

Specialists

ArtistsWriters

Researchers

Photographers Media Analysts Other Skills


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4 functions of full4 functions of full--service agenciesservice agencies

Account ManagementAccount Management

CreativeCreative Media Planning & PlacementMedia Planning & Placement

ResearchResearch


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agency organization chart

Print

Traffic

Production ProductionBroadcast Analysts

Other Marketing

Communications

Services

[PR, etc.]

Asst. Account

Executive

Account

Executive

Management

Supervisor

Account Mgmt.

Director

Copy Spvr. &

Copywriters

Art Supervisor

& Art Directors

Creative

Group:

Associate

Creative

Director

Creative

Exec CD

Research

Assistants

Project

Managers

Research

Director

Media

Planner

Media

Buyer

Media

Supervisor

Associate

Media

Director

Media Dept.

Director

Strategy

Review Board

[Managment

Committee]

Office Management

[Personnel,

Accounting,

Legal, etc.]

President

[COO]

Board of

Directors

[Chairman/CEO]


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Account Management

link between agency & client

responsible for understanding...

the clients businessthe clients marketing needs

strategy development

representing client point of view within the agency


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Account Management

account management director

management supervisor

account supervisors

account executives

assistant account execs

account coordinators

traffic

Tr ffic

sst. cc t

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cc t

r i t r

cc t

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cc t

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er is r

cc t t.

irect r


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Creative Department


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Creative Department

executive & group creative directors

creative director

associate creative director copywriters

art directors

broadcast producers

print production managers

traffic coordinators

Pri

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ffic

Pr

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riters

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media department


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media department

media director

associate media directors

media supervisors

media planners

media buyers

media analysts

Anal sts

e ia

lanner

edia

Buyer

edia

Super is r

Ass ciate

Media

Direct r

Media

Direct r


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mega-agency media departments have now become

profit centers agencies have set up their media departments as free-

standing units

many large clients now look at media as a separateservice


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interpret market environment

gather and analyze research data.

primary and secondary techniques determine consumer needs/perceptions

understand problems

advise how ads can meetstrategic goals

help find solutions

ResearchResearchReportReport


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research director

research project managers

research assistants

outside research specialists

research departmentresearch departmentresearch departmentresearch department

ResearchSuppliers

Outside

Research

Assistants

Project

Managers

Research

Director

ResearchResearchReportReport


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auxiliary agency functions

account planning

strategy/creative review board office management

human resources

legal services accounting

recruitment


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Other types of agencies

Media buying services

Creative boutiques

Sales Promotion Services Event Management Services

Public Relations Services

Design Studios

Website Design Services

Production Houses

Research Companies


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5 - 20

External Agencies

Advertising agencies

Media service companies Direct marketing agencies Consumer and trade promotion specialists

Public relations firms

Boutique------------------ Full-ser ice


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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


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agency commissions

media commission system

15% media commission

adjustable commission rates

negotiate to match client budget

sliding scale

markups-production & service add a percentage markup to costs

17.65% of net = 15% of gross


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4 types of fee systems

fixed fee (retainer)

cost-plus fee performance fee

hybrid fee & commission


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incentives

in theory, a good way to work

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), howcan agency be responsible for final results?

results based on many factors, such as competitiveefforts, not just advertising


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new business

three primary sources

build existing clients business

add and sell new IMC services

solicit new accounts

two ongoing problems

spec work

teams walking with accounts


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The criticalThe criticalobjective andobjective and

role of any adrole of any adagency isagency is

gaining newgaining new

business.business.


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things to think about:

why might you be interested in going into the agencybusiness?

what might keep you from choosing a career in the

agency business?


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Advertising Agencies

Effective and continuous advertising is one of the most importantfunctions of any successful business. It is imperative that theproducts or services of any business receive the proper exposure,and the way to achieve exposure is through advertising. Whetherit is on the national or local level, advertising campaigns arenecessary to let people know about a business and its products.The goal of marketing is to target the segment of a populationwho have a special need for a particular product or service andfinding ways to provide that product or service in the mosteffective means available. The function of advertising andmarketing companies is to professionally promote individual

businesses and organizations.Advertising agencies and marketingfirms are dedicated to the development of the most innovativeand effective means of business promotion available.


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TOP AD AGENCIES

Ogilvy & Mather,Mumbai

Leo Burnett Mumbai

Saatchi & Saatchi,Mumbai

Mudra Communication Pvt Ltd Delhi

R K Swami BBDO,Mumbai

VGC,Mumbai


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5 - 30

In-House or Advertising Agency

Decision Criteria

The size of the account

The media budget Objectivity

Product complexity

Creative ability


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5 - 31

Whole EggTheory

New trend in advertising

Young and RubicamAdAgency Total success in the marketplace Integration of marketing approach.


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5-32

LeoBur ett o. age cies o ot ser e competi g firms.

Source: www.leoburnett.com.

Year btai e

Compa y I ustry ccount

eneral otors utomobile 1971Hallmar reeting car s 1988

Kelloggs Cereal 1949

VI Cre it car s 1979

c onal s Fast food 1981llstate Insurance 1957

ain Detergent 2000

Conflicts ofInterest


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5-33

Grey Worldwide dvertising

Source: www.grey.com.

#of Year btained

Company Countries ccount

araLee 21 1993Kraft Foods Nort merica 2002

Vol swagen 15 1998

3 Corporation 14 1984

Coca-Cola 6 2004

Cannon 5 1976

Playtex Nort merica 1968

os iba 16 2007

Global eac


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5 - 34

Choosing an Agency

1. Set goals.2. Select process and criteria.

3. Screen initial list of applicants.4. Request client references.5. Reduce list to 2-3 viable agencies.6. Request creative pitch.

7. Select agency.


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5 - 35

Evaluation Criteria

Selecting Advertising Agency

Size of agency Relevant experience Conflicts of interest Creative reputation Product capabilities Media purchasing capabilities Other services available Client retention rates Personal chemistry


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5 - 39

AdvertisingPlanning and Research

General pre-planning input

Product specific-research

Major selling idea

Qualitative research

Anthropology

Sociology Psychology

Value and lifestyle model (VALS)


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5-40

Key AdvertisingPersonnel

ClientMarketing Manager

AccountExecutive

Creative

CreativeDirector

Traffic

Manager

Media

Buyers&Planners



Creative Creative Creative


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5 - 41

1. Review communication market analysis.

2. Establish advertising portion of IMC objectives.3. Review advertising budget.

4. Select media.

5.

Prepare creative brief.

Steps in AdvertisingCampaign

Management


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5 - 42

1.Communication Market Analysis

Review

Competitors Opportunities Target markets Customers Product positioning


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5 - 43

To build brand image Top of mind

First choice To inform

To persuade To support other marketing efforts

To encourage action

2. Advertising Goals


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5 - 44

3. Advertising Budget

Continuous sc edule

Flighting schedule

Pulsating schedule

anner ofDistribution:


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Left Right Brain Ads

Left brain advertisement Logical, rational side of brain

Manages numbers, letters, words, and concepts Rational appeal

Right-brain advertisement Emotional side of brain

Manages abstract ideas, images, and feelings Emotional appeal


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5 - 46

Creative Brief

What is . . .

The objective The target audience

The message theme

The support

The constraints


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5-47

The support claims

highlighted in this

advertisement is that

icroThins are:

30% thinner

40% lighter

4 times more scratch resistant

10 times more impact resistant

99.9% UV protection Anti-reflective

The Support


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5-48

Creative Brief - Del Monte

The Objective increase awareness of the smaller-size cans with pull-top lid.

TargetAudience senior citizens, especially those that live alone andsuffer from arthritis.

Message Theme the new cans not only contain a smaller portion butare easier to open.

Support 30 intro coupon to encourage usage.

Constraints copyright logo, toll free #, Web site, legal requirementsof a coupon, and what is meant by a small serving.


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5-49

Del Monte

Advertisement

Basedon the

CreativeBrief in

theprevious

slide.


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For use only with Duncan texts. 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin

IMC

P

artners &Industry

Organization


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Who are the IMC partners?

How is the agency world organized?

How do media partners fit in?

Behind the message is the company

(client)

How does the agency/clientrelationship work?

Chapter Outline


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More UseofOtherMarketing

CommunicationsFunctions

MarketingCommunications

Dominatedby AdvertisingAgencies

More UseofOtherMarketing

CommunicationsFunctions

MarketingCommunications

Dominatedby AdvertisingAgencies

Chapter Perspective: ChangingWorld

Old WorldOld World New WorldNew World

Willingness toconsiderothermediatoreachconsumers

Focus onmass mediaFocus onmass media


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OpeningCase: Phelps Group


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TheWallofideas

Surveys ofclients, suppliers, andemployees

WallbangersandBrainBangersBalls

Getfeedbackfortheagencys work

TheWallofideas

Surveys ofclients, suppliers, andemployees

WallbangersandBrainBangersBalls

Getfeedbackfortheagencys work

Recognizedas averycreativeagency

Impressiveclientlist: Petco,WholeFoods, Panasonic

OpeningCase: Phelps Group

Challenge:Challenge:

Answer:Answer:

Results:Results:


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Three Players in the Golden Triangle


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IMC in Action: Mall of America


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PromoteMallofAmericas 10thanniversary

An IMC campaignfeaturing:

Thetheme:Celebratingadecadeoffun

Efforttoinvolveas manymediapartnersas possible

PromoteMallofAmericas 10thanniversary

An IMC campaignfeaturing:

Thetheme:Celebratingadecadeoffun

Efforttoinvolveas manymediapartnersas possible

USA Todayfrontpage story

CBS SundayMorningpiece

AP storycarriedby30newspapers

IMCIn Action: Mall of America


Answer:Answer:

Results:Results:


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1st Part of Golden Triangle: The Agency


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RelationshipMarketing

Events

IMC

Advertising DirectMarketing

PublicRelations

Packaging

RelationshipMarketing

PublicRelations

Packaging

IMC

Events

DirectMarketing

Advertising

Sales

Promotion

Most Common Types of Agencies

Agencies


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Think About It

AgenciesNowthatyouhavelearnedaboutdifferenttypes ofagencies, atwhichwouldyouprefertowork?


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2nd Part of Golden Triangle: The Media


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Media Depend on Outside Sources

TomakeaprofitAdvertisers

ContentTofilltimeand space:

TV andradio:programming

Newspaper:news and

features

TomakeaprofitAdvertisers


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TouchstonePictures Logo

ABC Logo

DisneyChannel Logo

DisneyStore Logo

DisneyWorld Logo

Fox Kids Logo ESPN Logo

Disney Online

Ultimate form of integration: Disney

MediaIntegration@ Disney


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3rd Part of Golden Triangle: Companies


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Two Types of MarketingEfforts

B2C

B2B


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Some Firms Do Both: Nike

B2B

Nikes Relationshipwith shoeretailerslike Foot Locker

B2C

Niketown stores selling shoes directlytoconsumers


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Figure 2-3: Example ofCentralized Control

+


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Figure 2-4: Example of Decentralized Control

+


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IMCIn Action: Selling America


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An IMC programfeaturing:

Bookletproducedin 14languages

Programtoteach EnglishinMiddleEastcolleges

Radio Sawa, an Arab-languageversionofVoiceofAmerica

Improve Americas imageafter9/11Improve Americas imageafter9/11

An IMC programfeaturing:

Bookletproducedin 14languages

Programtoteach EnglishinMiddleEasterncolleges

Radio Sawa, an Arab-languageversionofVoiceofAmerica

Tooearlytotell

IMC in Action: Selling America


Answer:Answer:

Results:Results:


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Agency/Media/Company Compensation

Commission: A payment that

represents a percentage of a clients

total media spending

Costofmediaadvertising: $5million (100%)

Amountagencybills toclient: $5million (100%)

Amountagencypays media $4.25million (85%)

Amountagencykeeps $750,000 (15%)

Commission = $750,000


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Insight: Cross-Functional IMCTeams

Long-termfocus: Keepteammembers inplaceforanextendedperiodratherthanassembling

themforadhocprojects Constantcontact: Frequentmeetings are

important;however, members canalsokeepinconstantcontactviaemail

Work space: Assigningacross-functionalteam

its ownwork spacehelps keepte

ammembersinformed

Supportfromthetop: Topmanagementmustsupporttheideaofcross-functionalplanningbyprovidingadequateresources

Some basic principles for managingcross-functional teams:


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Final Note:

IMC is driving the need for closeragency-client relationships

Fallout: some marketers are consolidatingtheir relationships with fewer agencies

IBM cut 70 agencies from its $500million account

02 ad agencies

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