1. advertising & marketing services agencies

2. U.S. advertising business n $263.8 billion in media expenditures(2004 estimate) n 5,000+ agencies n 243,000+ people employed n New York and Chicago still dominate n $263.8 billion in media expenditures(2004 estimate) n 5,000+ agencies n 243,000+ people employed n New York and Chicago still dominate

3. agency billing by city New York $61,264.4 Chicago17,379.9 Los Angeles 10,545.6 Detroit7,946.3 Minneapolis6,087.2 San Francisco 5,101.9 Boston3,993.7 Dallas3,234.8 Atlanta2,620.9 Philadelphia2,379.6 2001. Dollars in millions. Source: AdAge.com

4. major types of agencies: n mega-agency groups n national, regional, local n specialized/niche agencies n agency service suppliers l media buying, creative services n mega-agency groups n national, regional, local n specialized/niche agencies n agency service suppliers l media buying, creative services

5. mega-agency groups n prompted by mergers and client globalization n financial pressures n prompted by mergers and client globalization n financial pressures martin sorrell, chairman WPP n service multinational accounts n subsidiaries provide “IMC” (integrated marketing communication) services n service multinational accounts n subsidiaries provide “IMC” (integrated marketing communication) services

7. Omnicom Group Three agency networks nBBDO Worldwide l $1,062.7 million / 3,400 U.S. employees / 20,500 worldwide employees nDDB Worldwide l $815.0 million / 15,000 U.S. employees nTBWA Worldwide l $665.9 million / 8,700 U.S. employees Three agency networks nBBDO Worldwide l $1,062.7 million / 3,400 U.S. employees / 20,500 worldwide employees nDDB Worldwide l $815.0 million / 15,000 U.S. employees nTBWA Worldwide l $665.9 million / 8,700 U.S. employees

8. mega-agency pros & cons n positives: n larger talent pool n negotiating clout n financial rewards n account security n competitive edge n strong partnerships n more services n international link n positives: n larger talent pool n negotiating clout n financial rewards n account security n competitive edge n strong partnerships n more services n international link n negatives: n people vs. profit n creativity vs. size n conflict of interests n people business

9. national, regional & local n most national and regional agencies are part of mega-agency groups n regional and local agencies work with smaller clients who are usually located nearby n most national and regional agencies are part of mega-agency groups n regional and local agencies work with smaller clients who are usually located nearby

10. Top 10 U.S. Agency Brands Ranked by core advertising revenue - $millions nJ. Walter Thompson Co. (WPP) - 476.5 nLeo Burnett Worldwide (Publicis) - 362.7 nMcCann-Erickson Worldwide (Interpublic) - 320.8 nBBDO Worldwide (Omnicom) - 272.0 nOgilvy & Mather Worldwide (WPP) - 249.3 nDDB Worldwide Communications (Omnicom) - 248.1 nGrey Worldwide (WPP) - 231.9 nFoote, Cone & Belding Worldwide (Interpublic) - 225.1 nY & R Advertising (WPP) - 192.5 nPublicis Worldwide (Publicis) - 184.7 nJ. Walter Thompson Co. (WPP) - 476.5 nLeo Burnett Worldwide (Publicis) - 362.7 nMcCann-Erickson Worldwide (Interpublic) - 320.8 nBBDO Worldwide (Omnicom) - 272.0 nOgilvy & Mather Worldwide (WPP) - 249.3 nDDB Worldwide Communications (Omnicom) - 248.1 nGrey Worldwide (WPP) - 231.9 nFoote, Cone & Belding Worldwide (Interpublic) - 225.1 nY & R Advertising (WPP) - 192.5 nPublicis Worldwide (Publicis) - 184.7 Source: 2005 Ad Age Agency Report

11. Omnicom Agency Brands nDella Femina, Rothschild, Jeary & Partners nGMMB nGoodby, Silverstein & Partners nGSD&M nMerkley Newman Harty Partners nZimmerman & Partners nDella Femina, Rothschild, Jeary & Partners nGMMB nGoodby, Silverstein & Partners nGSD&M nMerkley Newman Harty Partners nZimmerman & Partners

12. specialized/niche agencies n ethnic agencies

13. Omnicom Ethnic Agencies Hispanic nDel Rivero Messianu DDB nDieste, Harmel & Partners l Ad Age multicultural shop of the year African-American nFootsteps Hispanic nDel Rivero Messianu DDB nDieste, Harmel & Partners l Ad Age multicultural shop of the year African-American nFootsteps

14. specialized/niche agencies n ethnic agencies n internet agencies

15. Omnicom Internet/Interactive nMartin-Williams nTribal DDB nMartin-Williams nTribal DDB

16. specialized/niche agencies n ethnic agencies n internet agencies n business-to-business agencies

17. Omnicom B-to-B n Doremus & Co. (split from Dow Jones & Co. in 1991)

18. specialized/niche agencies n ethnic agencies n internet agencies n business-to-business agencies n creative boutiques and design houses

19. Omnicom Creative/Design n Arnell Group (brand identification)

20. other suppliers n provide “unbundled” services l one part of what an agency does n media buying services n provide “unbundled” services l one part of what an agency does n media buying services

21. Omnicom “Unbundled” OMD Worldwide n80 offices n45 countries nGlobal media partner of BBDO Worldwide, DDB Worldwide, TBWA Worldwide, & DAS agencies OMD Worldwide n80 offices n45 countries nGlobal media partner of BBDO Worldwide, DDB Worldwide, TBWA Worldwide, & DAS agencies

22. other suppliers n freelancers & consultants n production companies n in-house or “house” agencies l agencies owned by clients n freelancers & consultants n production companies n in-house or “house” agencies l agencies owned by clients

23. in-house agencies n advantages & disadvantages from the gap’s “house agency” from the gap’s “house agency”

24. in-house agencies n advantages & disadvantages from the gap’s “house agency” from the gap’s “house agency” l familiarity l specialization l fast service l cost savings l confidentiality l familiarity l specialization l fast service l cost savings l confidentiality

25. in-house agencies n advantages & disadvantages l familiarity l specialization l fast service l cost savings l confidentiality n advantages & disadvantages l familiarity l specialization l fast service l cost savings l confidentiality l objectivity l resources l fresh ideas l extra cost and overhead l objectivity l resources l fresh ideas l extra cost and overhead

26. 2 primary roles of agencies n idea generation n brand-building n idea generation n brand-building

27. idea generation n manufacture ideas l ideas are lifeblood of the agency n create intellectual capital n create and sell different kinds of ideas l marketing strategies l promotional opportunities l even new product ideas... l ideas are lifeblood of the agency n create intellectual capital n create and sell different kinds of ideas l marketing strategies l promotional opportunities l even new product ideas...

28. brand-buildingbrand-building n “The agency’s purpose is to create and direct communication about a product or service so that the brand is perceived to have a unique value or brand personality.” n Let’s look at some examples... n “The agency’s purpose is to create and direct communication about a product or service so that the brand is perceived to have a unique value or brand personality.” n Let’s look at some examples...

29. brand-buildingbrand-building n Marlboro l Leo Burnett n Marlboro l Leo Burnett

30. brand-buildingbrand-building n McDonald’s l DDB Needham n McDonald’s l DDB Needham

31. brand-buildingbrand-building n Pepsi l BBDO n Pepsi l BBDO

32. brand-buildingbrand-building n Nike l Wieden + Kennedy n Nike l Wieden + Kennedy

33. brand-buildingbrand-building n American Express l Ogilvy & Mather n American Express l Ogilvy & Mather

34. brand-buildingbrand-building n Apple l Chiat/Day n Apple l Chiat/Day

35. brand-buildingbrand-building n more and more, agencies are being involved in all areas of marketers’ brand-building activities n today, it’s more than advertising n integrated marketing communications (IMC) n more and more, agencies are being involved in all areas of marketers’ brand-building activities n today, it’s more than advertising n integrated marketing communications (IMC) means integration