The Structure of the Advertising Industry: Advertisers, Agencies, Media Companies, and Support Organizations Marketing 3344
Trends Affecting the Advertising and Promotion Industry The “Undoing” of Agency Consolidation and Globalization—or not Media Proliferation, Consolidation, and “Multiplatform” Media Organizations Media Clutter and Fragmentation Consumer Control: Blogs and TiVos Web 2.0
Scope of the Advertising Industry U.S. Advertising Spending >$300 B Worldwide Advertising Spending >$600B
Structure of the Advertising Industry
Advertisers Manufacturers and Service Firms Trade Resellers Government Procter & Gamble, Verizon Trade Resellers Sears, McDonald’s Government Federal, State, Local Social/Not-for-profit Organizations United Way, Nature Conservancy
Ad in Context Example In addition to companies, the government makes extensive use of advertising.
The Role of the Advertiser in IBP Describe the value that the firm’s brand provides Describe the brand’s position in the market Describe the firm’s objectives for the brand in the near-term and long-term
The Role of the Advertiser in IBP Identify the target market(s) that are most likely to respond favorable to the brand Identify and manage the supply chain/distribution system that will most effectively reach the targets Be committed to using advertising and other promotional tools to grow the brand
Agencies Advertising Promotion Agencies: Agencies: Full-Service Creative Boutique Interactive In-House Media Specialists Promotion Agencies: Direct Marketing/ Database E-commerce Sales Promotion Event Planning Design Firms Public Relations Firms
Ad in Context Example Advertising agencies make extensive use of advertising to acquire new clients.
Full Service Agency Services Account Services Marketing Research Services Creative and Production Services Media Planning and Buying Services Administrative Services
Agency Compensation Commissions: Markup Charges: Fee Systems: around 15% of airtime fees—in flux 16 2/3 percent for outdoor media web media is all negotiated Markup Charges: production cost + fixed % Fee Systems: hourly rates, or by project Pay-for-Results: tightly-specified objectives
External Facilitators Consultants Creative, Media, Database Production Facilitators Software Firms Web tracking, fulfillment
Media Organizations Broadcast Print Interactive Media Support Media TV, radio Print Magazines, direct mail, Newspapers, specialty Interactive Media Internet, interactive broadcast, iPod, Cell Phone Support Media Outdoor, directories, sponsorship, Point-of-purchase, branded entertainment Media Conglomerates Time Warner, Disney, Turner
Target Audiences Household Consumers Businesses Professionals Government Organizations