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ADVERTISING AGENCIESADVERTISING AGENCIES
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enc es ave e
Specialists
ArtistsWriters
Researchers
Photographers Media Analysts Other Skills
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4 functions of full4 functions of full--service agenciesservice agencies
Account ManagementAccount Management
CreativeCreative Media Planning & PlacementMedia Planning & Placement
ResearchResearch
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agency organization chart
Traffic
Production ProductionBroadcast Analysts
Other Marketing
Communications
Services
[PR, etc.]
Asst. Account
Executive
Account
Executive
Management
Supervisor
Account Mgmt.
Director
Copy Spvr. &
Copywriters
Art Supervisor
& Art Directors
Creative
Group:
Associate
Creative
Director
Creative
Exec CD
Research
Assistants
Project
Managers
Research
Director
Media
Planner
Media
Buyer
Media
Supervisor
Associate
Media
Director
Media Dept.
Director
Strategy
Review Board
[Managment
Committee]
Office Management
[Personnel,
Accounting,
Legal, etc.]
President
[COO]
Board of
Directors
[Chairman/CEO]
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Account Management
link between agency & client
responsible for understanding...
the clients businessthe clients marketing needs
strategy development
representing client point of view within the agency
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Account Management
account management director
management supervisor
account supervisors
account executives
assistant account execs
account coordinators
traffic
Tr ffic
sst. cc t
ec ti e
cc t
r i t r
cc t
ec ti e
cc t
er is r
e e t.
er is r
cc t t.
irect r
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Creative Department
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Creative Department
executive & group creative directors
creative director
associate creative director copywriters
art directors
broadcast producers
print production managers
traffic coordinators
Pri
t
r
ffic
Pr
cti
r
c
stPr
cti
r.
riters
rt
er is
r
rt
irect
rs
re
ti
e
r
:
ss
ci
te
re ti e
irect
r (
)
re
ti e
irect r (
)
ec ti e
re
ti e
irect
r (
)
tr
te
e ie
r
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media department
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media department
media director
associate media directors
media supervisors
media planners
media buyers
media analysts
Anal sts
e ia
lanner
edia
Buyer
edia
Super is r
Ass ciate
Media
Direct r
Media
Direct r
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mega-agency media departments have now become
profit centers agencies have set up their media departments as free-
standing units
many large clients now look at media as a separateservice
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interpret market environment
gather and analyze research data.
primary and secondary techniques determine consumer needs/perceptions
understand problems
advise how ads can meetstrategic goals
help find solutions
ResearchResearchReportReport
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research director
research project managers
research assistants
outside research specialists
research departmentresearch departmentresearch departmentresearch department
ResearchSuppliers
Outside
Research
Assistants
Project
Managers
Research
Director
ResearchResearchReportReport
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auxiliary agency functions
account planning
strategy/creative review board office management
human resources
legal services accounting
recruitment
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Other types of agencies
Media buying services
Creative boutiques
Sales Promotion Services Event Management Services
Public Relations Services
Design Studios
Website Design Services
Production Houses
Research Companies
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5 - 20
External Agencies
Advertising agencies
Media service companies Direct marketing agencies Consumer and trade promotion specialists
Public relations firms
Boutique------------------ Full-ser ice
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3 ways agencies make money
commissions
usually 15% of gross costs
fees
usually based on negotiated hourly rate
incentives
still relatively new and problematic usually based on performance goals
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agency commissions
media commission system
15% media commission
adjustable commission rates
negotiate to match client budget
sliding scale
markups-production & service add a percentage markup to costs
17.65% of net = 15% of gross
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4 types of fee systems
fixed fee (retainer)
cost-plus fee performance fee
hybrid fee & commission
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incentives
in theory, a good way to work
get paid based on how well you do, not how much
you bill in practice, difficult to implement
if client makes final decision (instead of agency), howcan agency be responsible for final results?
results based on many factors, such as competitiveefforts, not just advertising
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new business
three primary sources
build existing clients business
add and sell new IMC services
solicit new accounts
two ongoing problems
spec work
teams walking with accounts
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The criticalThe criticalobjective andobjective and
role of any adrole of any adagency isagency is
gaining newgaining new
business.business.
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things to think about:
why might you be interested in going into the agencybusiness?
what might keep you from choosing a career in the
agency business?
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Advertising Agencies
Effective and continuous advertising is one of the most importantfunctions of any successful business. It is imperative that theproducts or services of any business receive the proper exposure,and the way to achieve exposure is through advertising. Whetherit is on the national or local level, advertising campaigns arenecessary to let people know about a business and its products.The goal of marketing is to target the segment of a populationwho have a special need for a particular product or service andfinding ways to provide that product or service in the mosteffective means available. The function of advertising andmarketing companies is to professionally promote individual
businesses and organizations.Advertising agencies and marketingfirms are dedicated to the development of the most innovativeand effective means of business promotion available.
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TOP AD AGENCIES
Ogilvy & Mather,Mumbai
Leo Burnett Mumbai
Saatchi & Saatchi,Mumbai
Mudra Communication Pvt Ltd Delhi
R K Swami BBDO,Mumbai
VGC,Mumbai
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5 - 30
In-House or Advertising Agency
Decision Criteria
The size of the account
The media budget Objectivity
Product complexity
Creative ability
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5 - 31
Whole EggTheory
New trend in advertising
Young and RubicamAdAgency Total success in the marketplace Integration of marketing approach.
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5-32
LeoBur ett o. age cies o ot ser e competi g firms.
Source: www.leoburnett.com.
Year btai e
Compa y I ustry ccount
eneral otors utomobile 1971Hallmar reeting car s 1988
Kelloggs Cereal 1949
VI Cre it car s 1979
c onal s Fast food 1981llstate Insurance 1957
ain Detergent 2000
Conflicts ofInterest
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5-33
Grey Worldwide dvertising
Source: www.grey.com.
#of Year btained
Company Countries ccount
araLee 21 1993Kraft Foods Nort merica 2002
Vol swagen 15 1998
3 Corporation 14 1984
Coca-Cola 6 2004
Cannon 5 1976
Playtex Nort merica 1968
os iba 16 2007
Global eac
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5 - 34
Choosing an Agency
1. Set goals.2. Select process and criteria.
3. Screen initial list of applicants.4. Request client references.5. Reduce list to 2-3 viable agencies.6. Request creative pitch.
7. Select agency.
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Evaluation Criteria
Selecting Advertising Agency
Size of agency Relevant experience Conflicts of interest Creative reputation Product capabilities Media purchasing capabilities Other services available Client retention rates Personal chemistry
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5 - 39
AdvertisingPlanning and Research
General pre-planning input
Product specific-research
Major selling idea
Qualitative research
Anthropology
Sociology Psychology
Value and lifestyle model (VALS)
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5-40
Key AdvertisingPersonnel
ClientMarketing Manager
AccountExecutive
Creative
CreativeDirector
Traffic
Manager
Media
Buyers&Planners
ClientMarketing Manager
ClientMarketing Manager
Creative Creative Creative
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5 - 41
1. Review communication market analysis.
2. Establish advertising portion of IMC objectives.3. Review advertising budget.
4. Select media.
5.
Prepare creative brief.
Steps in AdvertisingCampaign
Management
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5 - 42
1.Communication Market Analysis
Review
Competitors Opportunities Target markets Customers Product positioning
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To build brand image Top of mind
First choice To inform
To persuade To support other marketing efforts
To encourage action
2. Advertising Goals
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5 - 44
3. Advertising Budget
Continuous sc edule
Flighting schedule
Pulsating schedule
anner ofDistribution:
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5 - 45
Left Right Brain Ads
Left brain advertisement Logical, rational side of brain
Manages numbers, letters, words, and concepts Rational appeal
Right-brain advertisement Emotional side of brain
Manages abstract ideas, images, and feelings Emotional appeal
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5 - 46
Creative Brief
What is . . .
The objective The target audience
The message theme
The support
The constraints
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5-47
The support claims
highlighted in this
advertisement is that
icroThins are:
30% thinner
40% lighter
4 times more scratch resistant
10 times more impact resistant
99.9% UV protection Anti-reflective
The Support
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5-48
Creative Brief - Del Monte
The Objective increase awareness of the smaller-size cans with pull-top lid.
TargetAudience senior citizens, especially those that live alone andsuffer from arthritis.
Message Theme the new cans not only contain a smaller portion butare easier to open.
Support 30 intro coupon to encourage usage.
Constraints copyright logo, toll free #, Web site, legal requirementsof a coupon, and what is meant by a small serving.
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5-49
Del Monte
Advertisement
Basedon the
CreativeBrief in
theprevious
slide.
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For use only with Duncan texts. 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin
IMC
P
artners &Industry
Organization
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Who are the IMC partners?
How is the agency world organized?
How do media partners fit in?
Behind the message is the company
(client)
How does the agency/clientrelationship work?
Chapter Outline
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More UseofOtherMarketing
CommunicationsFunctions
MarketingCommunications
Dominatedby AdvertisingAgencies
More UseofOtherMarketing
CommunicationsFunctions
MarketingCommunications
Dominatedby AdvertisingAgencies
Chapter Perspective: ChangingWorld
Old WorldOld World New WorldNew World
Willingness toconsiderothermediatoreachconsumers
Focus onmass mediaFocus onmass media
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OpeningCase: Phelps Group
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TheWallofideas
Surveys ofclients, suppliers, andemployees
WallbangersandBrainBangersBalls
Getfeedbackfortheagencys work
TheWallofideas
Surveys ofclients, suppliers, andemployees
WallbangersandBrainBangersBalls
Getfeedbackfortheagencys work
Recognizedas averycreativeagency
Impressiveclientlist: Petco,WholeFoods, Panasonic
OpeningCase: Phelps Group
Challenge:Challenge:
Answer:Answer:
Results:Results:
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Three Players in the Golden Triangle
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IMC in Action: Mall of America
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PromoteMallofAmericas 10thanniversary
An IMC campaignfeaturing:
Thetheme:Celebratingadecadeoffun
Efforttoinvolveas manymediapartnersas possible
PromoteMallofAmericas 10thanniversary
An IMC campaignfeaturing:
Thetheme:Celebratingadecadeoffun
Efforttoinvolveas manymediapartnersas possible
USA Todayfrontpage story
CBS SundayMorningpiece
AP storycarriedby30newspapers
IMCIn Action: Mall of America
Challenge:Challenge:
Answer:Answer:
Results:Results:
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1st Part of Golden Triangle: The Agency
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RelationshipMarketing
Events
IMC
Advertising DirectMarketing
PublicRelations
Packaging
RelationshipMarketing
PublicRelations
Packaging
IMC
Events
DirectMarketing
Advertising
Sales
Promotion
Most Common Types of Agencies
Agencies
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Think About It
AgenciesNowthatyouhavelearnedaboutdifferenttypes ofagencies, atwhichwouldyouprefertowork?
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2nd Part of Golden Triangle: The Media
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Media Depend on Outside Sources
TomakeaprofitAdvertisers
ContentTofilltimeand space:
TV andradio:programming
Newspaper:news and
features
TomakeaprofitAdvertisers
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TouchstonePictures Logo
ABC Logo
DisneyChannel Logo
DisneyStore Logo
DisneyWorld Logo
Fox Kids Logo ESPN Logo
Disney Online
Ultimate form of integration: Disney
MediaIntegration@ Disney
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3rd Part of Golden Triangle: Companies
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Two Types of MarketingEfforts
B2C
B2B
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Some Firms Do Both: Nike
B2B
Nikes Relationshipwith shoeretailerslike Foot Locker
B2C
Niketown stores selling shoes directlytoconsumers
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Figure 2-3: Example ofCentralized Control
+
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Figure 2-4: Example of Decentralized Control
+
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IMCIn Action: Selling America
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An IMC programfeaturing:
Bookletproducedin 14languages
Programtoteach EnglishinMiddleEastcolleges
Radio Sawa, an Arab-languageversionofVoiceofAmerica
Improve Americas imageafter9/11Improve Americas imageafter9/11
An IMC programfeaturing:
Bookletproducedin 14languages
Programtoteach EnglishinMiddleEasterncolleges
Radio Sawa, an Arab-languageversionofVoiceofAmerica
Tooearlytotell
IMC in Action: Selling America
Challenge:Challenge:
Answer:Answer:
Results:Results:
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Agency/Media/Company Compensation
Commission: A payment that
represents a percentage of a clients
total media spending
Costofmediaadvertising: $5million (100%)
Amountagencybills toclient: $5million (100%)
Amountagencypays media $4.25million (85%)
Amountagencykeeps $750,000 (15%)
Commission = $750,000
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Insight: Cross-Functional IMCTeams
Long-termfocus: Keepteammembers inplaceforanextendedperiodratherthanassembling
themforadhocprojects Constantcontact: Frequentmeetings are
important;however, members canalsokeepinconstantcontactviaemail
Work space: Assigningacross-functionalteam
its ownwork spacehelps keepte
ammembersinformed
Supportfromthetop: Topmanagementmustsupporttheideaofcross-functionalplanningbyprovidingadequateresources
Some basic principles for managingcross-functional teams:
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Final Note:
IMC is driving the need for closeragency-client relationships
Fallout: some marketers are consolidatingtheir relationships with fewer agencies
IBM cut 70 agencies from its $500million account