MRK317 Integrated Marketing Communications The Advertising Industry in Canada Regulations in Canada

Participants in the IMC Process Figure 16-1

Participants in the IMC Process Advertiser (Client) Key participants in the process Have the products, services, or causes to be marketed Provide funds to pay for advertising/promotions Advertising Agency An outside firm that that specializes in the creation, production, and/or placement of the communications message

Participants in the IMC Process Media Organizations Provide an environment for the firm’s marketing communications message Specialized Marketing Communications Services Include direct marketing agencies, sales promotion agencies, interactive agencies, and public relations firms These organizations provides services in their areas of expertise

Management Issues of Advertising Agencies Advertising Agency Decision In-House Agency Option Advertising Agency Option

Full Service Advertising Agencies Account Services Marketing Services Creative Services Management and Finance Structure

Account Services Account services is the link between the ad agency and the client The account executive is responsible for interpreting the advertiser’s needs to the agency

Account Services Coordinates agency efforts in planning, creating, and producing ads Presents agency recommendations and obtains client approval

Marketing Services Research Department Media Department Gather, analyze, and interpret information important in developing advertisements Media Department Analyzes, selects, and contracts for space or time in the media selected for the client

Creative Services Copywriters are responsible for the creation and execution of advertisements May be involved in determining the basic appeal or theme of the campaign The art department is responsible for how the ad looks

Creative Services Coordinating the creative and production processes can often be a major problem A traffic department coordinates all phases of production to ensure all deadlines are met

Management and Finance Advertising agencies must be managed and perform operating functions such as accounting, human resources, etc. Must generate new business Bulk of an agency’s income goes to salary and benefits for employees

Other Types Of Agencies and Services Creative Boutiques Media Buying Services

Creative Boutiques Creative boutiques have developed in response to desires to utilize outside creative talent only Clients may believe extra creative effort is required or its employees do not have sufficient skills Boutiques usually perform creative functions on a fee basis

Media Buying Services Independent companies that specialize in the buying of media, particularly radio and television Agencies and clients usually develop their own media strategies and hire a buying service to execute them Media buying services have grown in recent years as clients seek alternatives to full-service agency relationships Paid a fee or commission for their work

Agency Compensation Commissions from Media Other Compensation Systems Fee Arrangement Cost-Plus Agreement Incentive-Based Compensation Percentage Charges

Gaining and Losing Clients Poor performance or service Poor communication Unrealistic demands by the client Personality conflicts Personnel changes

Gaining and Losing Clients Changes in the size of the client or agency Conflicts of interest Changes in the client’s corporate and/or marketing strategy Declining sales Conflicting compensation philosophies Changes in policies

Advertising Regulation in Canada Canadian Radio-television and Telecommunications Commission (CRTC) Regulation of Tobacco Advertising Quebec Regulations on Advertising to Children Advertising Standards Council (ASC)

CRTC Mandate is to ensure the Broadcasting Act of 1991 and Telecommunications Act of 1993 are upheld throughout Canada Make certain that all Canadians can receive broadcasting and telecommunications services

CRTC Advertising aspects regulated: Not covered: Advertising Limits Infomercials 900 numbers Alcohol and drugs Not covered: False and misleading ads Internet

Regulation of Tobacco Advertising Restricted by Health Canada regulations on their use of traditional advertising media Sponsor various arts, cultural, and sporting events (discontinued in 2003)

Regulation of Tobacco Industry Print ads communicating sponsorships were only permitted advertising Underground marketing has emerged, communication of brands occurs through exclusive distribution in select bars, pubs and nightclubs

Quebec Regulations on Advertising to Children Consumer Protection Act of Quebec It is illegal to direct commercial messages to persons younger than 13 Concerns the product, the way the ad is presented, and the time and place the ad is shown

Advertising Standards Council (ASC) Not-for-profit, self regulatory, industry body with mandate to create and maintain community confidence in advertising Represents advertisers media organizations and advertising industry suppliers

ASC Canadian Code of Advertising Standards Gender Portrayal Guidelines Describes what is not acceptable advertising Pertains to the content of ads only Intention is to provide standards so that responsible and effective advertising results Gender Portrayal Guidelines Ensure that women and men are portrayed appropriately in advertising

ASC Complaint Process Handles complaints in three streams Consumer complaints: from ordinary citizens who believe an ad is unacceptable Special interest groups: from a demonstrated organization that expresses a unified viewpoint Trade disputes: complaints from other advertisers

ASC Complaints Report Clearance Process Comprehensive annual report Identification of advertisers and the details of all complaints Clearance Process Alcohol Cosmetics Non-prescription drugs Ads directed towards children Food

Ethical Effects of Advertising Advertising as Untruthful or Deceptive Advertising as Offensive or Bad Taste Advertising and Children

Examples of Shock Ads

Many People Found Benetton’s “Sentenced to Death” Campaign Offensive

Advertising is Used to Address Social Problems

Using Advertising to Fight the War on Drugs