the agency world

The Agency The Agency WorldWorldChapter 2Chapter 2

The Agency WorldThe Agency World

The traditional agencyThe traditional agency New agency structuresNew agency structures The growing range of specialistsThe growing range of specialists Selecting an agencySelecting an agency Paying the agencyPaying the agency

The agency worldThe agency worldObjectivesObjectives

Understand the role of advertising Understand the role of advertising agencies and the relationship agencies and the relationship between agency and clientbetween agency and client

Appreciate the factors that promote Appreciate the factors that promote creative and effective advertisingcreative and effective advertising

IntroductionIntroduction

No business needs an agencyNo business needs an agency Can buy different services Can buy different services

from separate specialistsfrom separate specialists Most businesses find it easier Most businesses find it easier

to use an agencyto use an agency

Alternative ways to performAlternative ways to perform the advertising function the advertising function

Necessitates employing an Necessitates employing an advertising staff and absorbing the advertising staff and absorbing the operation costsoperation costs

Unprofitable unless a company does Unprofitable unless a company does a large and continuous advertisinga large and continuous advertising

In-house advertising operation

Full-service advertising agency

AdvantagesAdvantages In-depth knowledge In-depth knowledge

and skillsand skills Obtaining negotiating Obtaining negotiating

muscle with the mediamuscle with the media Coordinating Coordinating

advertising and advertising and marketing effortsmarketing efforts

DisadvantagesDisadvantages Some control is lostSome control is lost Larger clients are Larger clients are

favored over small favored over small clientsclients

Occasionally Occasionally inefficient in media inefficient in media buyingbuying

A la carte

AdvantagesAdvantages Use services only Use services only

when they are neededwhen they are needed Availability of high-Availability of high-

caliber creative talentcaliber creative talent Potential cost Potential cost

efficienciesefficiencies

DisadvantagesDisadvantages Specialists approach Specialists approach

client problems in a client problems in a stereotyped fashionstereotyped fashion

Lack of cost Lack of cost accountabilityaccountability

Financial instability of Financial instability of smaller boutiquessmaller boutiques

Advertising Agency Advertising Agency OrganizationOrganization

Develop advertising Develop advertising copy and campaigns copy and campaigns

Copywriters, Copywriters, production people, production people, and creative and creative directorsdirectors

Creative Services

Account Management

Media Services

Research Services


Selecting the best Selecting the best advertising media advertising media

Media planners Media planners develop overall develop overall media strategymedia strategy

Media buyers Media buyers procure the procure the selected mediaselected media

Creative Services

Account Management

Media Services

Research Services


Study clients’ Study clients’ customers’ buying customers’ buying habits, purchase habits, purchase preferences, and preferences, and responsivenessresponsiveness

Focus groups, mall Focus groups, mall intercepts, acquisition intercepts, acquisition of syndicated research of syndicated research datadata

Creative Services

Account Management

Media Services

Research Services


Link the agency Link the agency with the clientwith the client

Act as liaisons so Act as liaisons so that the client does that the client does not need to interact not need to interact directly with several directly with several different service different service departments and departments and specialistsspecialists

Creative Services

Account Management

Media Services

Research Services

Memorable AdvertisingMemorable Advertising

Apple Computer’s “1984” TV CommercialApple Computer’s “1984” TV Commercial

What Makes Effective What Makes Effective Advertising?Advertising?

Sound

Strategy

Consumer’s

View Persuasive

Doesn’t

Overwhelm

Deliver on

Promises

Break

Clutter

Effective

Advertising

Creating Effective Creating Effective AdvertisingAdvertising

The Role of The Role of CreativityCreativity

Being CreativeBeing Creative

Characteristics of Characteristics of

creative creative campaignscampaigns

Differentiates itselfDifferentiates itself

Out-if-the-ordinaryOut-if-the-ordinary

Energizer Energizer BatteriesBatteries

Energizer BatteriesEnergizer Batteries

Energizer Energizer Batteries keep Batteries keep going, and going, going, and going, and going…and going…

Like the drum-Like the drum-beating bunny that beating bunny that reinforces the reinforces the argumentargument






Energizer Energizer

BatteriesBatteries

Pepsi-ColaPepsi-Cola

Pepsi-ColaPepsi-ColaPepsi-Cola Pepsi-Cola

commercialcommercial

pokes fun at its pokes fun at its

competitor,competitor,

Coca-colaCoca-cola

and subtlyand subtly

conveys theconveys the

message thatmessage that

perhapsperhaps

Pepsi is betterPepsi is better

than Cokethan Coke






Energizer Energizer

BatteriesBatteries


Volkswagen GolfVolkswagen Golf






Energizer Energizer

BatteriesBatteries



Bud LightBud Light

Creating Effective Creating Effective AdvertisingAdvertising

The Role of Creativity

Spuds MacKenzie campaignSpuds MacKenzie campaign BudfrogsBudfrogs Louie and FrankLouie and Frank Whassup?!Whassup?!

Little Caesar’sLittle Caesar’s

The toga-clad “Pizza, The toga-clad “Pizza,

Pizza” man captures Pizza” man captures

and holds the viewer’s and holds the viewer’s

attention and provides attention and provides

Little Caesar’s with a Little Caesar’s with a

unique image vis-a-vis unique image vis-a-vis

its more laid-backits more laid-back

competitorscompetitors


This simple ad dramatizes that the VolkswagenThis simple ad dramatizes that the VolkswagenGolf is a roomy car while holding the viewer’sGolf is a roomy car while holding the viewer’s

attention in an entertaining mannerattention in an entertaining manner

New agency structuresNew agency structures

Three factors that influence the Three factors that influence the ways in which new agency formats ways in which new agency formats have emergedhave emerged

The new agency The new agency structuresstructures

Technological changesTechnological changes Growing importance of Growing importance of

internationally held accounts for internationally held accounts for large agencieslarge agencies

Recognition that different clients Recognition that different clients have diversified needshave diversified needs

Reorganizing the oldReorganizing the old

The ‘account room’ approachThe ‘account room’ approach Structure the agency around its Structure the agency around its

clientsclients - creates a focus for the account - creates a focus for the account

teamteam - keeps them close to the brand- keeps them close to the brand


The “Virtual Account Group” or The “Virtual Account Group” or “Virtual agency”“Virtual agency”

Uses linked computersUses linked computers IntranetIntranet Video conferencingVideo conferencing High tech connectionsHigh tech connections


““hot desking”hot desking” First come first served officesFirst come first served offices

Results of reorganizationResults of reorganization

Gets agencies away from what they Gets agencies away from what they always criticized in their clients.always criticized in their clients.

- focus on products and production - focus on products and production with less regard to customers needswith less regard to customers needs

- Allows for anyone on the team to be - Allows for anyone on the team to be involved in the creative process.involved in the creative process.

Specialist AgenciesSpecialist Agencies

Media Buying agenciesMedia Buying agencies Creative boutiquesCreative boutiques Direct marketingDirect marketing Account planningAccount planning Management consultantsManagement consultants

Media Buying AgenciesMedia Buying Agencies

Buy blocks of space or time from Buy blocks of space or time from media businessmedia business

Effectively became media Effectively became media wholesalerswholesalers

An important source of advertising An important source of advertising researchresearch

Creative BoutiquesCreative Boutiques

Creative hot-shopsCreative hot-shops Using briefs from clients – create Using briefs from clients – create

advertisementsadvertisements Often freelancersOften freelancers Assist full service agencies when Assist full service agencies when

under pressureunder pressure

Direct MarketingDirect Marketing

Nowadays full service agencies are Nowadays full service agencies are merging or aquiring direct merging or aquiring direct specialistsspecialists

Allows for common creative Allows for common creative directiondirection

Also developing new skills necessary Also developing new skills necessary for the internet advertising marketfor the internet advertising market

Account PlanningAccount Planning

Take over the planning role for an Take over the planning role for an agencyagency

Act as supplementary source of Act as supplementary source of ideas for agency or advertiserideas for agency or advertiser

Management consultantsManagement consultants

Provide general consultancy on Provide general consultancy on brand strategybrand strategy

Selecting an agencySelecting an agency Have they fully Have they fully

understood the brief?understood the brief? Do they know how to Do they know how to

use market research? use market research? Can they contribute to Can they contribute to our thinking here?our thinking here?

Is their strategic Is their strategic thinking sound?thinking sound?

Is it imaginative? Is it imaginative? Have I learned Have I learned anything useful from anything useful from it?it?

Are they professional Are they professional and businesslike?and businesslike?

Can I work with their Can I work with their senior people? And will senior people? And will they be actually working they be actually working on my business?on my business?

Are their capabilities Are their capabilities high in all key areas – high in all key areas – management, strategy, management, strategy, creative, media?creative, media?

Do they work well as a Do they work well as a team – both among team – both among themselves and with our themselves and with our people?people?

Selecting an agencySelecting an agency Is their creative Is their creative

work of a high work of a high quality?quality?

Is this confined to Is this confined to TV, or does it go TV, or does it go across all media?across all media?

Does this include Does this include below-the-line? below-the-line? New media? Can New media? Can they offer an they offer an integrated service?integrated service?

Do they have real Do they have real expertise in the expertise in the specialist areas which specialist areas which we are looking at, egl we are looking at, egl direct marketing, new direct marketing, new media?media?

Can they work with us Can they work with us internationally (now or internationally (now or in the future)in the future)

How do they propose How do they propose to evaluate the to evaluate the effectiveness of the effectiveness of the campaign?campaign?

Selecting an agencySelecting an agency What is their attitude to What is their attitude to

costs? Will they save us costs? Will they save us money?money?

How will they relate to How will they relate to our media buying our media buying agency/other agency/other specialists?specialists?

How important to them How important to them will our account be? will our account be? Will we be one of their Will we be one of their larger accounts, or larger accounts, or simply a small fish in a simply a small fish in a very large pool?very large pool?

Will they fit with our Will they fit with our ways of working? Are ways of working? Are they willing and able they willing and able to be business to be business partners, or will they partners, or will they simply be suppliers? simply be suppliers? (This depends – of (This depends – of course – on how we course – on how we see our own style of see our own style of dealing with agencies)dealing with agencies)

Agency CompensationAgency Compensation

•Commissions from media (15%)•Reduced commission system(<15%)

•Labor-based fee system

•Outcome-based

Three Sources

the agency world

Business