Advertising Agency

Smita Sharma
Advertising Agency
 An advertising agency or ad agency is a service
business dedicated to creating, planning and
handling advertising (and sometimes other forms of
promotion) for its clients.
 An ad agency is independent from the client and
provides an outside point of view to the effort of
selling the client's products or services. An agency
can also handle overall marketing and branding
strategies and sales promotions for its clients.
 Typical ad agency clients include businesses and
corporations, non-profit organizations and
government agencies. Agencies may be hired to
produce single ads or, more commonly, ongoing
series of related ads, called an advertising
campaign.
Few Ad Agencies
 McCann-Erickson Worldwide
 DDB Worldwide
 Grey Advertising
 Ogilvy & Mather Worldwide
 EURO RSCG Worldwide
 J.Walter Thompson Co.
 BBDO Worldwide
 Y & R Advertising
 Publicis Communication
 D’Arcy Masius Benton & Bowles
full-service agency functions:

“full-service” agencies provide the

following services:
 account management
 creative
 media planning and media
placement (media buying)
 research
 many adding “below the line”
services - PR, sales promotion, etc.
major types of agency:
 mega-agency groups
 independent agencies
 national, regional, and local
 specialized/niche agencies
 agency service suppliers
 media buying, creative services
mega-agency groups
 prompted by mergers and
client globalization
 financial pressures
 service multinational
accounts
martin sorrell,
 subsidiaries provide chairman WPP
“IMC” (integrated marketing
communication) services
mega-agency pros & cons

 positives:  negatives:
 larger talent pool  people vs. profit
 negotiating clout
 creativity vs. size
 financial rewards
 account security
 conflict of
 competitive edge
interests
 strong partnerships
 more services
 international link
national, regional & local

 these are independent agencies

 there are now fewer national agencies which
are not part of mega-agency groups
 regional and local agencies work with smaller
clients who are usually located nearby
specialized/niche agencies

 industry specialists
 ethnic agencies
specialized/niche agencies

 industry specialists
 ethnic agencies
 internet agencies
specialized/niche agencies

 industry specialists
 ethnic agencies
 internet agencies
 business-to-business agencies
 creative boutiques and
design houses
other suppliers

 provide “unbundled” services

 one part of what an agency does
 media buying services
 freelancers & consultants
 production companies
 in-house or “house” agencies
 agencies owned by clients
in-house agencies
 advantages

 familiarity
 specialization
 fast service
 cost savings
 confidentiality
 fresh ideas
2 primary roles of agencies

 idea generation
 brand-building
idea generation
 manufacture ideas
 ideas are lifeblood of the agency
 create intellectual capital
 create and sell different
kinds of ideas
 marketing strategies
 promotional opportunities
 even new product ideas...
brand-building

 “The agency’s purpose is to

create and direct communication
about a product or service so that
the brand is perceived to have a
unique value or brand
personality.”
 Let’s look at some examples...
brand-building

 Marlboro
 Leo Burnett
brand-building

 McDonald’s
 DDB Needham
brand-building

 Pepsi
 BBDO
brand-building

 Nike
 Wieden + Kennedy

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are needed to see this picture.
brand-building

 American Express
 Ogilvy & Mather
brand-building
means integration
 more and more, agencies are
being involved in all areas of
marketers’ brand-building activities
 today, it’s more than advertising
 it’s integrated marketing
communications (IMC)
integrated marketing communication

 “done right, IMC is the

planning and
implementation of the
various
communications
disciplines as a single,
overall communications
system -- making all the
channels work.”
integrated marketing communication

the imc promotion mix

 advertising
 public relations
 direct response
 sales promotion
 personal selling
 structure & organization

what agencies do.

and how they’re organized
to do it.
primary services:
 complete a marketing analysis
 develop an advertising plan
 prepare a creative strategy
 create advertising executions
 develop and implement a media plan
 handle billing and payments
 integrate other marketing
communications
functions of full-service agencies

 account management
 creative
 media planning and placement
 research
agency organization chart

Board of
Directors
[Chairman/CEO]

President
[COO]

Other Marketing Strategy Office Management

Communications Review Board [Personnel,
Services [Managment Accounting,
[PR, etc.] Committee] Legal, etc.]

Account Mgmt. Creative Research Media Dept.

Director Exec CD Director Director

Management Associate Project Associate

Supervisor Creative Managers Media
Director Director

Account Creative Research Media

Executive Group: Assistants Supervisor

Asst. Account Copy Spvr. & Art Supervisor Media Media

Executive Copywriters & Art Directors Planner Buyer

Broadcast Print Analysts

Production Production

Traffic
account management

 liaison between agency and client

 responsible for understanding...
 the client’s business
 the client’s marketing needs
 strategy development
 representing client point of view
within the agency
 account management
Account Mgmt.
 account management director
Director
 management supervisor
Management.
Supervisor
 account supervisors
 account executives
Account
Supervisor  assistant account execs
Account  account coordinators
Executive
 traffic
Asst. Account Account
Executive Coordinator

Traffic
creative department
 responsibility
 the creative department is responsible
for creating and producing the print and
broadcast advertising
 strategy is key
 good creative work is always guided by a
creative strategy that sets forth goals to
be accomplished and key message points
to be relayed
 creative department
Strategy
Review  executive & group creative
directors
Board

Executive
Creative
Director (ECD)
 creative director
Creative
 associate creative director
Director (CD)
 copywriters
Associate
Creative
Director (ACD)  art directors
Creative
Group:
 broadcast producers
Copy Spvr. & Art Supervisor
 print production managers
 traffic coordinators
Copywriters & Art Directors

Broadcast Print
Production Production

Traffic
media department

 The media department has two main

functions - planning and buying.

 The planning group handles more

strategic marketing and media
issues.
 The buying group handles media
negotiations and implementation.
 media department
Media  media director
Director

 associate media directors

Associate
Media  media supervisors
Director

 media planners
Media
Supervisor  media buyers

Media Media  media analysts Media

Planner Buyer Plan

Analysts
big changes in the
media department
 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 separate service
 research department
 interpret market environment
 gather and analyze research data.
 primary and secondary techniques
 determine consumer needs/perceptions
 understand problems
 advise how ads can meet strategic goals
 help find solutions
Research
Report
 research department
Research  research director
Director
 research project managers
Project
 research assistants
Managers outside research
specialists
Research
Assistants

Outside Research
Research Report
Suppliers
auxiliary agency functions

 account planning
 strategy/creative review board
 office management
 human resources
 legal services
 accounting
 recruitment
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
types of fee systems

 fixed fee (retainer)

 cost-plus fee
 performance fee
 hybrid fee &
commission
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), how can agency be responsible
for final results?
 results based on many factors, such as
competitive efforts, not just advertising
new business

 three primary sources

 build existing client’s business
 add and sell new IMC services
 solicit new accounts
 ongoing problem
 teams “walking” with accounts
beyond 2000

advertising
agency trends
agency trends
 clutter, overload, “overchoice”
 increased media options
 increasing audience fragmentation
 more messages everywhere
 doing more with less
 economic pressures, “downsizing”
 ongoing client budget pressures
 managing size
 more mergers and mega-agencies
agency trends
 managing technology
 interactive marketing
 e-mail, web sites
 improving internal systems
 account planning
 re-engineering agency organization
 improving delivery of imc services
in conclusion...

as long as marketers need ideas to

build their brands, they’re going to
need
advertising agencies
questions & discussion
 why might you be interested in going
into the agency business?
 what might keep you away from
choosing a career in the agency
business?