The Role of Ad Agencies and

Other Marketing Communications

Organizations

Source: Belch
 Participants in the IMC Process

Advertiser
Advertiser (Client)
(Client)

Advertising
Advertising Agency
Agency

Media
Media Organizations
Organizations Direct
Direct Sales
Sales
Response
Response Promotion
Promotion
Marketing
Marketing Agencies
Agencies Agencies
Agencies
Communications
Communications
Specialist
Specialist
Organization
Organization Public
Public Interactive
Interactive
Relations
Relations Agencies
Agencies
Collateral
Collateral Services
Services Firms
Firms
 Client’s Role:
THE CENTRALIZED SYSTEM
President

Research & Human

Production Finance Marketing
Development Resources

Marketing Product
Advertising Sales
Research Planning

Advertising Manager or
Marketing Communication Manager

Planning & Budgeting

Administration & Execution

Coordination with other departments

Coordination with outside agencies

and services
 Pros & Cons of Centralization

+ Positive - Negative

Better
Better Less
Less Goal
Goal
Communications
Communications Involvement
Involvement

The
The
Fewer
Fewer Longer
Longer
Personnel
Personnel
Centralized
Centralized Response
Response Time
Time
System
System

Can’t
Can’t Do
Do
Continuity
Continuity
Ease
Ease of process
ofStaff
process Multiple
Multiple Product
Product
Of
Of Staff Lines
Lines
 DECENTRALIZED SYSTEM

Corporate

Research & Human

Production Finance Marketing
Development Resources

Product Marketing
Sales Management Services

Brand Advertising Marketing

Manager Department Research
Ad Agency
Sales Promotion
Brand
Manager Package Design

Ad Agency merchandising
Brand
Manager

Ad Agency
 Pros & Cons of Decentralization

+ Positive - Negative

Lack
Lack of
of
Concentrated
Concentrated Experience
Experience
Attention
Attention in
in IMC
IMC

Rapid The
The
Rapid Problem
Problem Competition
Competition for
for
Response Decentralized
Decentralized Resources
Response Resources
System
System

Increased
Increased Lack
Lack of
of
Flexibility
Flexibility Authority
Authority
 In-House Agencies

It is an advertising agency that is set up, owned

and operated by the advertiser

e.g. Calvin Klein, Avon, Revlon, Benetton

Pros & Cons of In-House Agencies

+ Positive - Negative

Cost
Cost Less
Less
Savings
Savings Experience
Experience

More The
The Less
More Less
Control In-house
In-house Objectivity
Control Objectivity
Agency
Agency

Less
Less
Better
Better Flexibility
Flexibility and
and
Coordination
Coordination outside
outside perspective
perspective
 Ad Agencies Have Skilled Specialists

Artists
Artists Writers
Writers Researchers
Researchers

Photographers
Photographers Media
Media Analysts
Analysts Other
Other Skills
Skills
 Full-Services Agencies

Planning
Planning
advertising
advertising Full
Full Range
Range of
of Performing
Performing
Marketing
Marketing research
research
Creating
Creating Communication
Communication
advertising
advertising and
and Promotion
Promotion
Services Selecting
Selecting media
media
Producing
Producing Services
advertising
advertising

Strategic
Strategic market
market
planning
planning Package
Package design
design
Sales
Sales promotion
promotion Non-Advertising
Non-Advertising
and
and training
training Services
Services Public
Public relations
relations
Trade
Trade show
show and
and publicity
publicity
materials
materials
 Typical Full-Service Agency Organization

Board of
Directors

President

VP Creative VP Account VP Marketing VP Management

Services Services Services and Finance

Writers TV Print Account Media Research Sales Office

Art Directors Produciton Production Supervision Promotion Management

Traffic Traffic Account Personnel Accounting Finance

Executive

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 Services Provided by Agencies

Agency
Agency Services
Services

Account
Account Marketing
Marketing Creative
Creative
Service
Service Services
Services Services
Services

The
The link
link between
between Research
Research Creation
Creation and
and
agency
agency and
and client
client department
department may
may execution
execution ofof ads
ads
design
design and
and execute
execute
Managed
Managed by by the
the research Copywriters,
Copywriters,
Account research programs
programs
Account Executive
Executive artists,
artists, other
other
Media
Media department
department specialists
specialists
may
may analyze,
analyze, select
select
and
and contract
contract media
media
resources
resources
The Role of Creative Boutiques

Creative
Creative Provide
Provide Only
Only Creative
Creative Services
Services
Boutiques
Boutiques

Full-Service
Full-Service Agencies
Agencies May
May
Subcontract
Subcontract With
With Creative
Creative
Boutiques
Boutiques

Provide
Provide more
more attention
attention and
and
better
better access
access to
to creative
creative talent
talent
Media Buying Can Be Specialized

Media
Media Specialize
Specialize in
in Buying
Buying Media,
Media,
Specialist
Specialist Especially
Especially Broadcast
Broadcast Time
Time
Companies
Companies

Agencies
Agencies and
and Clients
Clients Develop
Develop
Media
Media Strategy
Strategy

Media
Media Buying
Buying Organizations
Organizations
Implement
Implement the
the Strategy
Strategy and
and
Buy
Buy Time
Time and
and Space
Space
Agency Compensation

Commissions
Commissions
Method
Method

Cost-Plus
Cost-Plus
Agreements
Agreements

Compensation
Compensation Percentage
Percentage
Methods
Methods Charges
Charges

Fee
Fee
Arrangements
Arrangements

Incentive-Based
Incentive-Based
Payment
Payment
 Why Agencies Lose Clients

Personnel
changes Changes
Poor in strategy
performance
Poor Declining
communications sales
Unrealistic
demands
Changes
in size Payment
conflicts
Personality
conflicts Policy
Conflict of
interests changes

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 How Agencies Gain Clients

Referrals
Referrals Presentations
Presentations

Solicitations
Solicitations

Public
Public Relations
Relations Image,
Image, Reputation
Reputation

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 Direct Response Agency Activities

Data
Data Base
Base Media
Media Services
Services
Management
Management

Direct Direct
Direct
Direct Creative
Mail Response
Response Creative
Mail
Agencies
Agencies

Research
Research Production
Production

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Activities performed by Sales
Promotion Agencies

Promotion
Promotion Planning
Planning

Creative
Creative Work
Work

Research
Research
Research

Coordination
Coordination With
With
Advertising
Advertising

Premium
Premium Design
Design

Contest/Sweepstakes
Contest/Sweepstakes
Development
Development

Data
Data Base
Base Marketing
Marketing
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Functions performed by Public Relations Firms

Damage
Control Generating
Strategy Publicity
Development

Program
Planning
Image
Portrayal
Lobbying
Public
Affairs

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 Functions performed by Interactive Agencies

Web
Web Web
Web Sites
Sites
Banner
Banner Ads
Ads

Interactive
Interactive
Media
Media Creation
Creation

CD-ROMs
CD-ROMs Kiosks
Kiosks

Audio
Audio Video
Video

Digital
Digital
Content
Content

Animation
Animation Special
Special Effects
Effects

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Marketing Research Companies

Planning
Planning and
and
Implementing
Implementing
Research
Research

Information
Information
Application
Application

Analysis
Analysis and
and
Interpretation
Interpretation

Primary
Primary Data
Data
Collection
Collection
Qualitative
Qualitative && Quantitative
Quantitative

Secondary
Secondary Data
Data
Collection
Collection
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin