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Organizing for Advertising and Promotion:The Role of Ad Agencies and Other Marketing Communications Organizations
Organizing for Advertising and Promotion:The Role of Ad Agencies and Other Marketing Communications Organizations
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Participants in the IMC Process
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Marketing Communications Specialist Organization
Marketing Communications Specialist Organization
Media OrganizationsMedia Organizations
Advertiser (Client)Advertiser (Client)
Advertising AgencyAdvertising Agency
Collateral ServicesCollateral Services
Direct Response Agencies
Direct Response Agencies
Sales Promotion Agencies
Sales Promotion Agencies
Interactive Agencies
Interactive Agencies
Public Relations
Firms
Public Relations
Firms
Advertising Department UnderCentralized System
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
PresidentPresident
ProductionProduction FinanceFinance MarketingMarketingResearch
and Develop-
ment
Research and
Develop-ment
Human ResourcesHuman
Resources
AdvertisingAdvertising Marketing Research
Marketing Research SalesSales Product
PlanningProduct Planning
FewerPersonnel
FewerPersonnel
BetterCommunications
BetterCommunications
ContinuityOf Staff
ContinuityOf Staff
LongerResponse Time
LongerResponse Time
Less GoalInvolvementLess Goal
InvolvementBetter
CommunicationsBetter
Communications
FewerPersonnel
FewerPersonnel
ContinuityOf Staff
ContinuityOf Staff
Less GoalInvolvementLess Goal
Involvement
LongerResponse Time
LongerResponse Time
Pros & Cons of Centralization
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
TheCentralized
System
TheCentralized
System
+ Positive+ Positive - Negative- Negative
Can’t DoMultiple Product
Lines
Can’t DoMultiple Product
Lines
Decentralized Brand Management System
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Production Finance
Sales
BrandManager
Ad agency
BrandManager
Ad agency
ProductManagement
SalesPromotion
PackageDesign
Merchandising
AdvertisingDepartment
MarketingResearch
MarketingServices
Marketing Researchand
Development
HumanResources
Corporate
Competition for Resources
Competition for Resources
Competition for Resources
Competition for Resources
Lack of Experience
in IMC
Lack of Experience
in IMC
Lack of Experience
in IMC
Lack of Experience
in IMC
Rapid ProblemResponse
Rapid ProblemResponse
ConcentratedAttention
ConcentratedAttention
IncreasedFlexibilityIncreasedFlexibilityIncreasedFlexibilityIncreasedFlexibility
Rapid ProblemResponse
Rapid ProblemResponse
ConcentratedAttention
ConcentratedAttention
Pros & Cons of Decentralization
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
TheDecentralized
System
TheDecentralized
System
+ Positive+ Positive - Negative- Negative
Lack ofAuthorityLack of
Authority
MoreControlMore
Control
CostSavings
CostSavings
BetterCoordination
BetterCoordination
LessObjectivity
LessObjectivity
LessExperience
LessExperience
LessObjectivity
LessObjectivity
LessExperience
LessExperience
BetterCoordination
BetterCoordination
MoreControlMore
Control
CostSavings
CostSavings
Pros & Cons of In-House Agencies
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
TheIn-houseAgency
TheIn-houseAgency
+ Positive+ Positive - Negative- Negative
LessFlexibility
LessFlexibility
Most No Fear advertising is done by their in-house agency
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
+
ArtistsArtists
Ad Agencies Have Skilled Specialists
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
WritersWriters ResearchersResearchers
PhotographersPhotographers Media AnalystsMedia Analysts Other SkillsOther Skills
Creating advertisingCreating
advertising
Planning advertisingPlanning
advertising
Producing advertisingProducing advertising
Performing research
Performing research
Selecting mediaSelecting media
Sales promotion and training
Sales promotion and training
Strategic market planning
Strategic market planning
Trade show materials
Trade show materials
Package designPackage design
Planning advertisingPlanning
advertising
Creating advertisingCreating
advertising
Producing advertisingProducing advertising
Performing research
Performing research
Selecting mediaSelecting media
Strategic market planning
Strategic market planning
Sales promotion and training
Sales promotion and training
Trade show materials
Trade show materials
Package designPackage design
Full-Services Agencies
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Full Range of Marketing
Communication and Promotion
Services
Full Range of Marketing
Communication and Promotion
Services
Non-Advertising Services
Non-Advertising Services
Public relations and publicity
Public relations and publicity
Typical Full-Service Agency Organization
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
WritersArt Directors
Traffic
TVProduciton
Traffic
PrintProduction
VP CreativeServices
AccountExecutive
AccountSupervision
VP AccountServices
Media Research SalesPromotion
VP MarketingServices
Personnel Accounting Finance
OfficeManagement
VP Managementand Finance
President
Board ofDirectors
Services Provided by Agencies
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Agency ServicesAgency Services
The link between agency and client
Managed by the Account Executive
The link between agency and client
Managed by the Account Executive
Research department may design and execute research programs
Media department may analyze, select and contract media resources
Research department may design and execute research programs
Media department may analyze, select and contract media resources
Creation and execution of ads
Copywriters, artists, other specialists
Creation and execution of ads
Copywriters, artists, other specialists
Marketing Services
Marketing Services
Account Service
Account Service
Creative ServicesCreative Services
Marketing Services
Marketing Services
Account Service
Account Service
The Role of Creative Boutiques
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
CreativeBoutiquesCreative
Boutiques Provide Only Creative ServicesProvide Only Creative Services
Full-Service Agencies May Subcontract With Creative
Boutiques
Full-Service Agencies May Subcontract With Creative
Boutiques
Provide Only Creative ServicesProvide Only Creative Services
Full-Service Agencies May Subcontract With Creative
Boutiques
Full-Service Agencies May Subcontract With Creative
Boutiques
Other Functions Provided by the Internal Client Departments
Other Functions Provided by the Internal Client Departments
Coca Cola’s in-house boutique created this popular spot
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
+
Specialize in Buying Media, Especially Broadcast Time
Specialize in Buying Media, Especially Broadcast Time
Agencies and Clients Develop Media Strategy
Agencies and Clients Develop Media Strategy
Agencies and Clients Develop Media Strategy
Agencies and Clients Develop Media Strategy
Specialize in Buying Media, Especially Broadcast Time
Specialize in Buying Media, Especially Broadcast Time
Media Buying Can Be Specialized
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Media Buying
Services
Media Buying
Services
Media Buying Organizations Implement the Strategy and
Buy Time and Space
Media Buying Organizations Implement the Strategy and
Buy Time and Space
CommissionsMethod
CommissionsMethod
Cost-PlusAgreementsCost-Plus
Agreements
PercentageCharges
PercentageCharges
FeeArrangements
FeeArrangements
Incentive-BasedPayment
Incentive-BasedPayment
CommissionsMethod
CommissionsMethod
Cost-PlusAgreementsCost-Plus
Agreements
PercentageCharges
PercentageCharges
FeeArrangements
FeeArrangements
Methods of Agency Compensation
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
CompensationMethods
CompensationMethods
Young & Rubicam has handled Dr. Pepper for over 30 years
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
+
Foote, Cone & Belding was the agency for Levi’s for 68 years
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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Poorperformance
Poorcommunications
Unrealisticdemands
Personalityconflicts
Personnelchanges
Changesin size
Conflict ofinterests
Changesin strategy
Decliningsales
Paymentconflicts
Policychanges
Poorperformance
Poorcommunications
Unrealisticdemands
Personalityconflicts
Personnelchanges
Changesin size
Conflict ofinterests
Changesin strategy
Decliningsales
Paymentconflicts
Why Agencies Lose Clients
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
ReferralsReferrals
How Agencies Gain Clients
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
SolicitationsSolicitations
PresentationsPresentations
Public RelationsPublic Relations Image, ReputationImage, Reputation
Gateway Changed Its Advertising After Changing Agencies
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
*Click outside of the video screen to advance to the next slide
A Change in Strategy Led to a Change in Gateway’s Advertising
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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DirectMail
DirectMail
Data BaseManagementData Base
Management
ResearchResearch
CreativeCreative
Media ServicesMedia Services
CreativeCreative
Media ServicesMedia Services
ResearchResearch
DirectMail
DirectMail
Data BaseManagementData Base
Management
Direct Response Agency Activities
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
DirectResponseAgencies
DirectResponseAgencies
ProductionProduction
Contest/Sweepstakes Development
Contest/Sweepstakes Development
Contest/Sweepstakes Development
Contest/Sweepstakes Development
Promotion PlanningPromotion Planning
Creative WorkCreative Work
ResearchResearch
Coordination With Advertising
Coordination With Advertising
Premium DesignPremium DesignPremium DesignPremium Design
Coordination With Advertising
Coordination With Advertising
Research Research
Creative WorkCreative Work
Promotion PlanningPromotion Planning
Data Base MarketingData Base Marketing
Activities performed by Sales Promotion Agencies
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
StrategyDevelopment
GeneratingPublicity
Lobbying
PublicAffairs
DamageControl
ImagePortrayal
StrategyDevelopment
GeneratingPublicity
Lobbying
PublicAffairs
DamageControl
ImagePortrayal
Functions performed by Public Relations Firms
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
ProgramPlanning
AudioAudio
Special EffectsSpecial Effects
VideoVideo
WebBanner Ads
WebBanner Ads
KiosksKiosks
Web SitesWeb Sites
CD-ROMsCD-ROMs
Special EffectsSpecial Effects
VideoVideoAudioAudio
KiosksKiosksCD-ROMsCD-ROMs
Web SitesWeb SitesWebBanner Ads
WebBanner Ads
Functions performed by Interactive Agencies
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Interactive Media Creation
Interactive Media Creation
DigitalContentDigital
Content
AnimationAnimation
Planning and Implementing
Research
Planning and Implementing
Research
Planning and Implementing
Research
Planning and Implementing
Research
Information ApplicationInformation Application
Analysis and InterpretationAnalysis and Interpretation
Primary Data Collection
Qualitative & Quantitative
Primary Data Collection
Qualitative & Quantitative
Secondary Data Collection
Secondary Data Collection
Primary Data Collection
Qualitative & Quantitative
Primary Data Collection
Qualitative & Quantitative
Analysis and InterpretationAnalysis and Interpretation
Information ApplicationInformation Application
Marketing Research Companies
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
