1. The Structure of the Advertising Industry:
Advertisers, Agencies, Media Companies, and Support Organizations
Marketing 3344

2. 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

3. Scope of the Advertising Industry
U.S. Advertising Spending >$300 B
Worldwide Advertising Spending >$600B

4. Structure of the Advertising Industry

5. 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

6. Ad in Context Example
In addition to companies, the government makes extensive use of advertising.

7. 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

8. 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

9. 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

10. Ad in Context Example
Advertising agencies make extensive use of advertising to acquire new clients.

11. Full Service Agency Services
Account Services
Marketing Research Services
Creative and Production Services
Media Planning and Buying Services
Administrative Services

12. 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

13. External Facilitators
Consultants
Creative, Media, Database
Production Facilitators
Software Firms
Web tracking, fulfillment

14. 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

15. Target Audiences Household Consumers Businesses Professionals
Government Organizations