1. 1 Advertising Agencies

2. 2 EXH 2-24

3. 3 Ad Agency Add Perceived Value to Product of Client by: Setting Product Apart from Competition Ad Agencies: Combining Marketing and Advertising Giving Product a Personality Communicating Basic Information Creating Image of Product

4. 4 How Agencies are Organized 5 Areas of Importance Account Planning & Research Media Planning & Buying Internal Service Creative Development & Production Account Management * Departmental system vs. Group system

5. 5 Agency Department System President Account Supervisor Account Supervisor Account Supervisor Account Supervisor Account Executive Account Executive Account Executive Account Executive Art / Copy Production Vice President Account Services Vice President Account Services Vice President Creative Services Vice President Creative Services Vice President Management Services Vice President Management Services Vice President Marketing Services Vice President Marketing Services Media Research Accounting Purchasing Personnel

6. 6 Agency Group System Agency Management Agency Management Group 2 Management Director Group 2 Management Director Group 1 Management Director Group 1 Management Director Group 3 Management Director Group 3 Management Director Account Service Account Service Creative Director Creative Director Media Planning Media Planning Market Research Market Research

7. 7 EXH 2-20

8. 8 Why Agencies Lose Clients Poor performance or service Poor communication Unrealistic demands by client Personality conflicts Personnel changes Changes in size of client or agency Conflicts of interest

9. 9 Perceptions of Involvement: Who Set Strategy?

10. 10 Perceptions: What Is the Agency’s Role?

11. 11 How Clients Compensate Agencies 19821997 Fees Commissions Combination

12. 12 Trends in Methods of Agency Compensation (in percentages) SOURCE: Data from the Association of National Advertisers.

13. 13 10 Principles for Building a Better Relationship with Your Agency Inculcate a spirit of partnership. Be wary of change for change’s sake. Make sure your agency is making a fair profit on your account. Make the agency totally absorbed in the company’s product, the people, and the corporate culture. Create an environment of experimentation and be prepared to pay for failure.

14. 14 10 Principles for Building a Better Relationship with Your Agency Treat the agency people well. Agree on a clearly defined obj. for adv. Keep approvals simple, disapprovals kind. Make the agency responsible for the advertising and give it the authority it needs to be responsible. Give the agency a formal evaluation every year.