Functions and Role of

the Advertising Agency

The overriding function is to see that its client’s
advertising leads to greater profits in the long run
The Agency

 Plans,
prepares, and places
advertising to this end
The customer is the key

 The agency supplies the “outside” point of view

 Aid the advertiser in the firm’s efforts to

communicate with prospective purchasers of its
product
The distinguishing characteristics

 Between various advertising agencies lie in the

 Creative skills of the personnel of each agency

 Philosophies of advertising held by each agency

 The agency size may be a significant factor in its

effectiveness, as – larger agency may be able to give
varied services; however smaller agencies may be able to
give personalized service
Advertising Planning
 The advertising manager has the responsibility for
planning the advertising program

 Some of this responsibility is delegated to the

agency

 In addition, the agency must do considerable

planning in carrying out its own functions of
creating and placing advertising
A thorough knowledge of the
 Firm’s products

Its past advertising history

 Present market conditions
 The firm’s distribution method

 Is critical if the agency is to do an effective job

The Agency also needs to know

 A great deal about the product –

 Its pluses and minuses – as compared with

competitive products
A successful advertising program
 Is built on a good product;

 And the advertising theme is created in

accordance with how the advertiser wishes to

 Position the product in the consumer’s mind

In order to gain the information
needed
 The agency engages in extensive research into the
market for the client’s product

 To market a product successfully, market studies

are conducted –
 Who buys it
 When
 Where
 How and
 Why
Advertising Campaigns should have
 Correct direction and timing
 Which is aided by this information

 Competitors’ activities are also important

In planning the advertising for a
particular product
 The agency analyzes marketing methods and
distribution channels used in the past for the
product in order to obtain specific information
about the business environment in which the
advertising message is to operate
 The advertising must be relevant to the present;

and
 Aesthetically acceptable to the consumer and to

the trade
The agency knows the character of
each advertising medium
 In addition to audience figures and comparative
costs

 The advertising message must be adapted to the

medium in which it is to appear

 Different advertising media do have varying

impacts on different segments of the market for
specific products
 The agency knows the physical requirements of
each medium and creates ads that fits the space
and time requirements of that medium
 From this background of :
 Product,
 Market,
 Distribution, and
 Media knowledge

 The agency can recommend strategies for

presenting the product to prospective buyers
 These ideas are submitted to clients for approval
 Upon approval of the strategies, the agency is

ready to carry them out – to create the ad and

place it
 A full service agency can provide many other

marketing services to its clients

 Can conduct post-advertising market studies to

ascertain the effectiveness of the advertising

campaign.
Creation and Execution
 Media choices are made before the ads are created
 Specific advertisements are created
 Copy is written
 Layouts are done
 Illustrations are drawn or photographed
 The advertising messages are prepared in the

correct mechanical form for running in the

selected media
 And commercials are produced
 Once the messages have been published or aired;

 The agency verifies the fact

 Pays the media and bills the client

Coordination
 Agency works with the sales force and the
distribution network

 To ensure the long-run success of the advertising

program

 Maximum sales from the combined efforts of the

salesperson, distributors, and retailers – all
assisted by advertising – are the goal
Although the Agency relieves the
client

 of many details involved in advertising, the client

still makes the major decisions

 One fundamental decision is to advertise or not

 Once the decision to advertise is made, the client

chooses an advertising agency
 Large advertisers may engage a number of
different agencies to handle various brands in
their product line

 Thereafter, decisions are concerned with the

strategy to be used in the advertising program

 The ideas of the agency are approved, modified, or

disapproved
Agency people and their work

 In large agencies advertising specialists are

assigned to specific tasks in the preparation of ads
or the performance of other services
Account Management
 Keeping the client satisfied with the services
rendered is of paramount importance to the
business success of the advertising agency
 This is the primary duty of the account executive,

who acts as a liaison between agency and

advertising department (advertiser) personnel
 The account executive often works on the

formulation of the advertising strategy in

cooperation with the client
 Regardless of the source of the strategy, the
account executive must see that the agency keeps
to the stated plan
 The account executive represents the client by

explaining the advertiser’s point of view to all

agency personnel working on the account,
 And also represents the agency point of view to the

client
 The job, therefore, calls for diplomacy and tact
 Merely liaisoning between the agency and the
advertiser is not all there is to account
management

 The account executive is in charge of the

administration of the advertising program on the
agency side, thus serving as the catalyst in
bringing out the best in the agency’s creative talent
Creative Department
 Once advertising plans are firm, ads are designed
by creative personnel to carry out the plan
 An agency retains a varied group of creative

people – writers artists, designers, graphic art

specialists

 The creative function may be under one

department, or it may be divided into several
separate departments, such as copy, art,
broadcast, and production
The Creative Function
 Is not a mechanical technique

 It involves a novel or infrequent expression,

response, or concept

 Creativity in advertising must be oriented to and

correlated with the marketing situation and serve
as a communication problem solver
Advertising Creativity
 Has been described as
 Presenting a product in a way that makes people want
to buy it.
 Once advertising plans are firm, advertisements are
designed by creative personnel to carry out the plan
 An agency retains a varied group of creative people,
including writers, artists, designers, television
producers, and graphic arts specialists.
 The creative function maybe under one department, or
it may be divided into several separate departments,
such as copy art, broadcast and production.
 This creativity often goes beyond the creation of
physical properties called advertisements – an
agency may recommend new products, different
distribution methods or a distinctive selling idea
 The outside point of view shines through these
recommendations

 The ideal agency has personnel who can generate

new marketing and communication ideas
Media Selection
 Another highly specialized agency function.
 The goal of the media people in the agency is to

choose the advertising medium – or combination

of media – that will do the most effective job of
reaching the client’s prospects.
 Securing the right audience is the most important

factor in media choices, but decisions of course are

affected by costs.
 From a maze of statistical data concerning rates,
circulations, populations, audiences, incomes and
other relevant information, the most productive
advertising media is chosen.
Research
 A major service provided by the advertising agency
people is research to support the decisions made
in the creative and media areas
 The gathering of factual information is often a

specialized agency function.

 Data on the marketplace and consumer buying

habits may be gathered and analyzed.

 The agency may also arrange for copy-testing

during the creation of ad campaigns and after they

have been run.
Internal Control and Other
Services
 Every advertising agency contains an
administrative arm which conducts routine,
behind-the-scenes business operations because it
is a business enterprise.
 In addition, it is essential that individual jobs be

coordinated and done on time, since deadlines

must be met.
 This function is performed by a specialized traffic

department.
 Furthermore, larger agencies often have a legal
department to pass on the advertisements created
by the agency.
 Smaller agencies rely on law firms for such advice.
 Some agencies maintain merchandising

departments;
 Others provide Public Relations services for

clients.
Agency Administration
 The management of an advertising agency
provides true challenges for agency executives.
 In addition to the usual problems of organizational

structure,
 There are the challenges of securing new business

and maintaining relationships with clients

New Business
 Top Management has another vital duty – to get
new business.
 Agencies grow in two ways:

1. By growing with their present accounts

2. By adding new accounts
 The first method involves doing good work for the
clients and relying on increased business from
these accounts
 The second method involves acquisition of new

advertising programs
 The agency management acts as the sales

department for the agency

 Some agencies aggressively solicit new business;

others discuss the possibility only on invitation

 Selling an agency’s services to a client involves
making a “presentation”, which is a description of the
agency’s personnel, resources, present accounts, and
successes.
 The agency maybe making the presentation singly or
in competition with other agencies
 Often clients require that a “speculative presentation”
be made.
 In these presentations, agency executives show how
the account will be handled if it is given to the agency.
Client-Agency Relationship
 No concept is more sacred to the advertising world

“There is no other industry where the prosperity of a

service company, and its future growth, are so
closely linked with the success of its clients as in
advertising.”
10 requirements that a company
expects from its ad agency
1. We expect excellence in everything you do.
2. We expect that your people will know our business
almost as well as we do, and that goes from the
technical to the marketing, so that if there are
potentials for interesting advertising, it can be
created.
3. We expect your people to know the industry as well
as we do.
4. We expect your people to be with the consumers, the
retailers, the wholesalers and in the front lines,
where the business is done and the battle is fought.
5. We expect your people to be honest with us and not
“yes” us.
6. We expect your people to give us every crazy idea they
might have, even though the rate of rejection is high
and the work load heavy.
7. We expect your people to stay on your account and
not be taken away by competitors. We, as you, have
investments in them and, if they are good, we want
them.
8. We expect you to have the same corporate affirmative
action policy on personnel on our accounts as we do.
9. We expect to be presented with options – good
advertising – dependent on mutual creativity

10. We expect total involvement at all levels of

agency management.
Agency Compensation

 All businesses need operating revenue to survive.

 Advertising revenues come from two sources :

1. Commissions from advertising media
2. Client fees