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The Agency The Agency WorldWorldChapter 2Chapter 2
The Agency WorldThe Agency World
The traditional agencyThe traditional agency New agency structuresNew agency structures The growing range of specialistsThe growing range of specialists Selecting an agencySelecting an agency Paying the agencyPaying the agency
The agency worldThe agency worldObjectivesObjectives
Understand the role of advertising Understand the role of advertising agencies and the relationship agencies and the relationship between agency and clientbetween agency and client
Appreciate the factors that promote Appreciate the factors that promote creative and effective advertisingcreative and effective advertising
IntroductionIntroduction
No business needs an agencyNo business needs an agency Can buy different services Can buy different services
from separate specialistsfrom separate specialists Most businesses find it easier Most businesses find it easier
to use an agencyto use an agency
Alternative ways to performAlternative ways to perform the advertising function the advertising function
Necessitates employing an Necessitates employing an advertising staff and absorbing the advertising staff and absorbing the operation costsoperation costs
Unprofitable unless a company does Unprofitable unless a company does a large and continuous advertisinga large and continuous advertising
In-house advertising operation
Full-service advertising agency
AdvantagesAdvantages In-depth knowledge In-depth knowledge
and skillsand skills Obtaining negotiating Obtaining negotiating
muscle with the mediamuscle with the media Coordinating Coordinating
advertising and advertising and marketing effortsmarketing efforts
DisadvantagesDisadvantages Some control is lostSome control is lost Larger clients are Larger clients are
favored over small favored over small clientsclients
Occasionally Occasionally inefficient in media inefficient in media buyingbuying
A la carte
AdvantagesAdvantages Use services only Use services only
when they are neededwhen they are needed Availability of high-Availability of high-
caliber creative talentcaliber creative talent Potential cost Potential cost
efficienciesefficiencies
DisadvantagesDisadvantages Specialists approach Specialists approach
client problems in a client problems in a stereotyped fashionstereotyped fashion
Lack of cost Lack of cost accountabilityaccountability
Financial instability of Financial instability of smaller boutiquessmaller boutiques
Advertising Agency Advertising Agency OrganizationOrganization
Develop advertising Develop advertising copy and campaigns copy and campaigns
Copywriters, Copywriters, production people, production people, and creative and creative directorsdirectors
Creative Services
Account Management
Media Services
Research Services
Advertising Agency Advertising Agency OrganizationOrganization
Selecting the best Selecting the best advertising media advertising media
Media planners Media planners develop overall develop overall media strategymedia strategy
Media buyers Media buyers procure the procure the selected mediaselected media
Creative Services
Account Management
Media Services
Research Services
Advertising Agency Advertising Agency OrganizationOrganization
Study clients’ Study clients’ customers’ buying customers’ buying habits, purchase habits, purchase preferences, and preferences, and responsivenessresponsiveness
Focus groups, mall Focus groups, mall intercepts, acquisition intercepts, acquisition of syndicated research of syndicated research datadata
Creative Services
Account Management
Media Services
Research Services
Advertising Agency Advertising Agency OrganizationOrganization
Link the agency Link the agency with the clientwith the client
Act as liaisons so Act as liaisons so that the client does that the client does not need to interact not need to interact directly with several directly with several different service different service departments and departments and specialistsspecialists
Creative Services
Account Management
Media Services
Research Services
Memorable AdvertisingMemorable Advertising
Apple Computer’s “1984” TV CommercialApple Computer’s “1984” TV Commercial
What Makes Effective What Makes Effective Advertising?Advertising?
Sound
Strategy
Consumer’s
View Persuasive
Doesn’t
Overwhelm
Deliver on
Promises
Break
Clutter
Effective
Advertising
Creating Effective Creating Effective AdvertisingAdvertising
The Role of The Role of CreativityCreativity
Being CreativeBeing Creative
Characteristics of Characteristics of
creative creative campaignscampaigns
Differentiates itselfDifferentiates itself
Out-if-the-ordinaryOut-if-the-ordinary
Energizer Energizer BatteriesBatteries
Energizer BatteriesEnergizer Batteries
Energizer Energizer Batteries keep Batteries keep going, and going, going, and going, and going…and going…
Like the drum-Like the drum-beating bunny that beating bunny that reinforces the reinforces the argumentargument
Being CreativeBeing Creative
Characteristics of Characteristics of
creative creative campaignscampaigns
Differentiates itselfDifferentiates itself
Out-if-the-ordinaryOut-if-the-ordinary
Energizer Energizer
BatteriesBatteries
Pepsi-ColaPepsi-Cola
Pepsi-ColaPepsi-ColaPepsi-Cola Pepsi-Cola
commercialcommercial
pokes fun at its pokes fun at its
competitor,competitor,
Coca-colaCoca-cola
and subtlyand subtly
conveys theconveys the
message thatmessage that
perhapsperhaps
Pepsi is betterPepsi is better
than Cokethan Coke
Being CreativeBeing Creative
Characteristics of Characteristics of
creative creative campaignscampaigns
Differentiates itselfDifferentiates itself
Out-if-the-ordinaryOut-if-the-ordinary
Energizer Energizer
BatteriesBatteries
Pepsi-ColaPepsi-Cola
Volkswagen GolfVolkswagen Golf
Being CreativeBeing Creative
Characteristics of Characteristics of
creative creative campaignscampaigns
Differentiates itselfDifferentiates itself
Out-if-the-ordinaryOut-if-the-ordinary
Energizer Energizer
BatteriesBatteries
Pepsi-ColaPepsi-Cola
Volkswagen GolfVolkswagen Golf
Bud LightBud Light
Creating Effective Creating Effective AdvertisingAdvertising
The Role of Creativity
Spuds MacKenzie campaignSpuds MacKenzie campaign BudfrogsBudfrogs Louie and FrankLouie and Frank Whassup?!Whassup?!
Little Caesar’sLittle Caesar’s
The toga-clad “Pizza, The toga-clad “Pizza,
Pizza” man captures Pizza” man captures
and holds the viewer’s and holds the viewer’s
attention and provides attention and provides
Little Caesar’s with a Little Caesar’s with a
unique image vis-a-vis unique image vis-a-vis
its more laid-backits more laid-back
competitorscompetitors
Volkswagen GolfVolkswagen Golf
This simple ad dramatizes that the VolkswagenThis simple ad dramatizes that the VolkswagenGolf is a roomy car while holding the viewer’sGolf is a roomy car while holding the viewer’s
attention in an entertaining mannerattention in an entertaining manner
New agency structuresNew agency structures
Three factors that influence the Three factors that influence the ways in which new agency formats ways in which new agency formats have emergedhave emerged
The new agency The new agency structuresstructures
Technological changesTechnological changes Growing importance of Growing importance of
internationally held accounts for internationally held accounts for large agencieslarge agencies
Recognition that different clients Recognition that different clients have diversified needshave diversified needs
Reorganizing the oldReorganizing the old
The ‘account room’ approachThe ‘account room’ approach Structure the agency around its Structure the agency around its
clientsclients - creates a focus for the account - creates a focus for the account
teamteam - keeps them close to the brand- keeps them close to the brand
Reorganizing the oldReorganizing the old
The “Virtual Account Group” or The “Virtual Account Group” or “Virtual agency”“Virtual agency”
Uses linked computersUses linked computers IntranetIntranet Video conferencingVideo conferencing High tech connectionsHigh tech connections
Reorganizing the oldReorganizing the old
““hot desking”hot desking” First come first served officesFirst come first served offices
Results of reorganizationResults of reorganization
Gets agencies away from what they Gets agencies away from what they always criticized in their clients.always criticized in their clients.
- focus on products and production - focus on products and production with less regard to customers needswith less regard to customers needs
- Allows for anyone on the team to be - Allows for anyone on the team to be involved in the creative process.involved in the creative process.
Specialist AgenciesSpecialist Agencies
Media Buying agenciesMedia Buying agencies Creative boutiquesCreative boutiques Direct marketingDirect marketing Account planningAccount planning Management consultantsManagement consultants
Media Buying AgenciesMedia Buying Agencies
Buy blocks of space or time from Buy blocks of space or time from media businessmedia business
Effectively became media Effectively became media wholesalerswholesalers
An important source of advertising An important source of advertising researchresearch
Creative BoutiquesCreative Boutiques
Creative hot-shopsCreative hot-shops Using briefs from clients – create Using briefs from clients – create
advertisementsadvertisements Often freelancersOften freelancers Assist full service agencies when Assist full service agencies when
under pressureunder pressure
Direct MarketingDirect Marketing
Nowadays full service agencies are Nowadays full service agencies are merging or aquiring direct merging or aquiring direct specialistsspecialists
Allows for common creative Allows for common creative directiondirection
Also developing new skills necessary Also developing new skills necessary for the internet advertising marketfor the internet advertising market
Account PlanningAccount Planning
Take over the planning role for an Take over the planning role for an agencyagency
Act as supplementary source of Act as supplementary source of ideas for agency or advertiserideas for agency or advertiser
Management consultantsManagement consultants
Provide general consultancy on Provide general consultancy on brand strategybrand strategy
Selecting an agencySelecting an agency Have they fully Have they fully
understood the brief?understood the brief? Do they know how to Do they know how to
use market research? use market research? Can they contribute to Can they contribute to our thinking here?our thinking here?
Is their strategic Is their strategic thinking sound?thinking sound?
Is it imaginative? Is it imaginative? Have I learned Have I learned anything useful from anything useful from it?it?
Are they professional Are they professional and businesslike?and businesslike?
Can I work with their Can I work with their senior people? And will senior people? And will they be actually working they be actually working on my business?on my business?
Are their capabilities Are their capabilities high in all key areas – high in all key areas – management, strategy, management, strategy, creative, media?creative, media?
Do they work well as a Do they work well as a team – both among team – both among themselves and with our themselves and with our people?people?
Selecting an agencySelecting an agency Is their creative Is their creative
work of a high work of a high quality?quality?
Is this confined to Is this confined to TV, or does it go TV, or does it go across all media?across all media?
Does this include Does this include below-the-line? below-the-line? New media? Can New media? Can they offer an they offer an integrated service?integrated service?
Do they have real Do they have real expertise in the expertise in the specialist areas which specialist areas which we are looking at, egl we are looking at, egl direct marketing, new direct marketing, new media?media?
Can they work with us Can they work with us internationally (now or internationally (now or in the future)in the future)
How do they propose How do they propose to evaluate the to evaluate the effectiveness of the effectiveness of the campaign?campaign?
Selecting an agencySelecting an agency What is their attitude to What is their attitude to
costs? Will they save us costs? Will they save us money?money?
How will they relate to How will they relate to our media buying our media buying agency/other agency/other specialists?specialists?
How important to them How important to them will our account be? will our account be? Will we be one of their Will we be one of their larger accounts, or larger accounts, or simply a small fish in a simply a small fish in a very large pool?very large pool?
Will they fit with our Will they fit with our ways of working? Are ways of working? Are they willing and able they willing and able to be business to be business partners, or will they partners, or will they simply be suppliers? simply be suppliers? (This depends – of (This depends – of course – on how we course – on how we see our own style of see our own style of dealing with agencies)dealing with agencies)
Agency CompensationAgency Compensation
•Commissions from media (15%)•Reduced commission system(<15%)
•Labor-based fee system
•Outcome-based
Three Sources