Chapter 3

Organizing for
Advertising and
Promotion: The
Role of Ad Agencies
and Other
Marketing
Communication
Organizations

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written consent of McGraw-Hill Education.

Participants in the Integrated Marketing

Communications Process
Advertisers or clients
Advertising agency
Media organizations
Specialized marketing communication
services organizations
Collateral services organizations
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written consent of McGraw-Hill Education.

Figure 3.2 - The Advertising

Department under a Centralized System

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written consent of McGraw-Hill Education.

Figure 3.3 - Decentralized Brand

Management System

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written consent of McGraw-Hill Education.

Figure 3.4 - Comparison of Advertising

Organizational Systems

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written consent of McGraw-Hill Education.

Advertising Agencies
Service organizations that specialize in planning
and executing advertising programs for its clients
Superagencies: Large agencies that merged with or
acquired other agencies and support organizations
Have now evolved into 4 major agency holding
companies?

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written consent of McGraw-Hill Education.

Reasons for Using an Ad Agency

Highly skilled specialists
Specialization in a particular
industry
Objective viewpoint of the
market
Broad range of experience
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written consent of McGraw-Hill Education.

Full-Service Agencies
Full
Full range
range of
of
marketing
marketing
communication
communication
and
and promotion
promotion
services
services

Nonadvertising
Nonadvertising
services
services

Planning
Planning
advertising
advertising

Performing
Performing
research
research

Creating
Creating
advertising
advertising

Selecting
Selecting media
media

Producing
Producing
advertising
advertising
Strategic
Strategic market
market
planning
planning

Interactive
Interactive
capabilities
capabilities

Sales
Sales
promotions
promotions

Package
Package design
design

Direct
Direct
marketing
marketing

Public
Public relations
relations
and
and publicity
publicity

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written consent of McGraw-Hill Education.

Figure 3.6 - Full-Service Agency

Organization Chart

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written consent of McGraw-Hill Education.

Agency Services

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10

Creative Boutiques
Small ad agencies that provide only creative
services
Advantages
Turn out inventive creative work quickly
Provide more attention and better access to creative
talent

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11

Media Specialist Companies

Specialize in the buying of media
Agencies and clients develop media strategy
Media buying organizations implement strategies,
and buy time and space

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12

Agency Compensation Methods

Commissions
from media

Fee, cost, and

incentive-based
systems

Percentage
charges

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13

Evaluating Agencies
Financial audit

Qualitative audit

Costs, expenses

Planning

Personnel hours billed

Program development

Payments to media

Implementation

Payments to suppliers

Results achieved

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14

Figure 3.9 - How Agencies Add Value

to Clients Business

Source: Report on the AgencyAdvertiser Value Survey, American Association of Advertising Agencies and Association of National Advertisers, August 2007

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15

Direct-Marketing Agencies
Provide a variety of services

Database analytics and management

Direct mail
Research and media services
Creative and production capabilities

Has following departments

Account management
Creative
Media
Database development/management

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16

Sales Promotion Agency

Involved with the developing and managing of
sales promotion programs
Provide following services
Promotional planning, creative research, and tie-in
coordination
Fulfillment
Premium design and manufacturing
Catalog production
Contest/sweepstakes management
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17

Functions Performed by Public

Relations Firms
Strategy
developmen
t
Public
affairs

Managing
crisis

Generating
publicity

Lobbying

News
releases,
communicati
on

Research

Special
events

Coordination
w/promotion
al
areas

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18

Digital/Interactive Agencies
Specialize in the development and strategic use of
various digital marketing tools
Websites for the Internet
Banner ads
Search engine optimization
Mobile marketing
Social media campaigns

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19

Collateral Services
Marketing research
Package design
Consultants
Photographers
Printers
Video production
Event marketing
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written consent of McGraw-Hill Education.

20