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

2. 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.”

3. 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

4. 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

5. 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

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

7. 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

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

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

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

11. 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

12. Management and Finance
Financial and accounting control
Office management
Personnel
Training

13. 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

14. 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

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

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

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