Chapter 3

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

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Participants in the Integrated Marketing Communications
Process

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 Case Study
 TVC: Skitto Promo

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Figure 3.2 - The Advertising Department under a
Centralized System

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 Responsibilities of MARCOM manager
 Administration and Execution
 Coordination with Other Departments
 Coordination with Outside Agencies and Services

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 Figure 3.3 - Decentralized Brand
Management System

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 Category Manager
 Some companies may have an additional layer(s) of management
above the brand managers to coordinate the efforts of all the brand
managers handling a related group of products. This system—
generally referred to as a category management system—includes
category managers as well as brand and advertising managers.

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 In-house agencies
 Agency that is set up, owned and operated by the advertiser
Used by many companies such as Target and Benetton

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 Figure 3.4 - Comparison of Advertising
Organizational Systems

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 Advertising Agencies
 Service organizations that specialize in planning and executing
advertising programs for its clients
 Examples: Grey, Asiatic, Bitopi
 Superagencies: Large agencies that merged with or acquired other
agencies and support organizations

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 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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 Full-Service Agencies
Planning
Planning Performing
Performing
Full
Full range
range of
of advertising
advertising research
research
marketing
marketing
communication Creating
Creating
communication advertising
Selecting
Selecting media
media
and advertising
and promotion
promotion
services
services Producing
Producing
advertising
advertising

Strategic
Strategic market
market Interactive
Interactive
planning
planning capabilities
capabilities
Nonadvertising
Nonadvertising
services
services Sales
Sales Package
Package design
design
promotions
promotions

Direct
Direct Public
Public relations
relations
marketing
marketing and
and publicity
publicity
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 Agency Services/Departments

Account Marketing Creative Mgmt &

services Services Services Finance
• The link • Research • Creation • Accounting
between department execution of • Finance
agency and • May include ads • Human
client account • Copywriter
Resources
• Managed by planners artists, other • New
the account • Media dept. specialists
business
executive obtains generation
media space,
time

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 Other types of agency
1.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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 2.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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 Agency Compensation Methods

Fee, cost, and

Commissions
incentive-based
from media
systems

Percentage
charges

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 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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 How Agencies Gain Clients
 Referrals
 Solicitation
 Presentations
 Public relations
 Image and reputation

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 Why Agencies Lose Clients
 Poor performance or service
 Poor communication
 Unrealistic demands by client
 Personality conflicts
 Personnel changes
 Changes in client size or agency

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Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
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 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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 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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Functions Performed by Public Relations Firms
Strategy Generating
Lobbying
development publicity

Public News releases,

Research
affairs communication

Coordination
Managing Special
w/promotional
crisis events
areas
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 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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 Collateral Services
Marketing research

Package design

Consultants

Photographers

Printers

Video production

Event marketing

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