The Advertising Agency, Media Services, and Other Services Chapter 5 The Advertising Agency, Media Services, and Other Services

Advertising Agency “An independent business, composed of creative and business people who develop, prepare and place advertising media for sellers seeking to find customers for their goods and services.”

What Advertising Agencies Do For Their Clients A study of client’s product or service look at advantages & disadvantages in the product An analysis of present and potential markets Knowledge of the factors of distribution and sales -- and methods of operation

What Advertising Agencies Do For Their Clients Formulation and presentation of definite plan Execution of the plan writing, design, and illustration contracting for space, time, or other advertising means Incorporation of the message in mechanical form and sending to the media checking and verifying

What Advertising Agencies Do For Their Clients Execution of the plan (continued) auditing and billing for the service, space and presentation cooperation with the client’s sales force

Full-Service Agency Offers clients all the services necessary to handle the total advertising function Planning Creation Production Placement Evaluation

Full-service agencies proceed through the following steps: Diagnosing the market and brand problem Setting objectives and developing strategy Creating the communication (layout, copy, etc.) Media plan Total plan Evaluation plan Notify trade of forthcoming campaign Billing and payments

Typical Agency Organizational Structure Creative department Account services Marketing services Management and finance

Creative Department Creative director Writers Artists Traffic department Print production director TV manager

Account Services Responsible for the relationship between the agency and the client Knowledgeable of: Client’s business Profit goals Marketing problems Advertising objectives

Marketing Services Responsible for media planning and buying, for research, and for sales promotion Media director Media buyer Media staff Research director Sales promotion director

Management and Finance Financial and accounting control Office management Personnel Training

Other Advertising Services Talent and production agencies Creating creative Talent sources to develop ad concepts Independent creative services Seek top creative talent on a freelance, per-job basis A La Carte Agency Offer for a fee just the part of the total services that advertisers want

Agency Compensation 15% commission Fixed commission less than 15% Sliding scales based upon client expenditures Flat-fee arrangements Performance-based systems Labor-based fee plus-profit arrangements

Other Services Barter houses Research services Wholesalers of broadcast time Research services Syndicated research Custom-made research reports

In House Agency Arguments For 1. Cost Saving 2. Confidentiality 3. Communications 4. Coordination and Control 5. Company and Product Familiarity

In House Agency Arguments Against 1. Objectivity 2. Quality/Expertise 3. Specialized Personnel 4. Working Relationship