Role of Advertising Agency

28/04/2023For educational purposes only 1

THE ADVERTISING AGENCYA CHANGING PERSPECTIVE


TOPICS TO COVER• ANATOMY OF AN ADVERTISING AGENCY• WHAT IS AN ADVERTISING AGENCY• HISTORY OF ADVERTISING AGENCY• TYPES OF ADVERTISING AGENCIES• STRUCTURE OF AN ADVERTISING• ROLE OF AN ADVERTISING AGENCY• FUNCTIONS OF AN ADVERTISING AGENCY• ADVERTISING PROCESS

• HOW AGENCIES GAIN CLIENTS• CLIENT AGENCY RELATIONSHIP• AGENCY FEE STRUCTURE• HOW TO SELECT THE RIGHT AGENCY FOR

YOUR PRODUCT / BRAND / SERVICE / IDEA• CHALLENGES ADVERTISING AGENCIES FACE• TOP ADVERTISING AGENCIES IN INDIA• ICONIC INDIAN BRANDS CREATED BY

ADVERTISING


ANATOMY OF AN ADVERTISING AGENCYHILARIOUS !!


AGENCIES ARE FAMOUSLY KNOWN TO BE DIVERSE.

I HAVE REPRESENTED SOME HEREAS PER MY OBSERVATIONS AS AN INSIDER &OUTSIDER.

A HILARIOUS TAKE ON THE ANATOMY OF ANADVERTISING AGENCY.

#PUNINTENDED :P



HOW A CREATIVE DEPARTMENT IS PERCEIVED

TRUE ? CERTAINLY


WHAT IS AN ADVERTISING AGENCY?

THE ASSOCIATION OF ADVERTISING AGENCIES OF AMERICA (AAAA) DEFINES ADVERTISING AGENCY AS “AN INDEPENDENT BUSINESS ORGANIZATION COMPOSED OF CREATIVE AND BUSINESS PEOPLE WHO DEVELOP, PREPARE AND PLACE ADVERTISING MEDIA FOR SELLERS SEEKING TO FIND CUSTOMERS FOR THEIR GOODS AND SERVICES.”


IT TAKES GOOD CLIENTS TO MAKE A GOOD ADVERTISING AGENCY. REGARDLESS OF HOW MUCH TALENT AN AD AGENCY MAY HAVE, IT IS INEFFECTIVE WITHOUT GOOD PRODUCTS AND SERVICES TO ADVERTISE.


HISTORY OF INDIAN ADVERTISINGA PERSPECTIVE

“”

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WHEN AIR CONDITIONING, ESCALATORS, AND ADVERTISING APPEARED, SHOPPING EXPANDED ITS SCALE, BUT ALSO LIMITED ITS SPONTANEITY. AND IT BECAME MUCH MORE PREDICTABLE, ALMOST SCIENTIFIC. WHAT HAD ONCE BEEN THE MOST SURPRISING BECAME THE MOST MANIPULATED

REM COOLHAAS


• PRESS ADVERTISEMENTS – LARGELY IMPORTED GOODS WHICH HAD REACHED INDIAN SHORES.

• 1930S – • TALKIES AND RADIO EMERGE AS A MEDIA.• INDIA’S FIRST ADVERTISING AGENCY - J. WALTER THOMPSON SET UP OPERATIONS IN

MUMBAI IN 1929, AS A PART OF UK BASED AGENCY FOR EASTERN OPERATIONS. • 1950S –

o WATERSHED YEARS FOR INDIAN ADVERTISINGo INDUSTRIAL REVOLUTION IN THE NEHRUVIAN ERAo 1ST SURVEY OF THE RURAL MARKETo BURMAH SHELL VANS USED FOR ADVERTISINGo CINEMA ADVERTISING BEGANo KOLKATA GETS THE PRIVILEGE OF INDIA’S FIRST AD CLUBo LEADING AD AGENCY - PRESS SYNDICATEo NATIONAL AGENCY CREATED THE FAMOUS MURPHY BABY


• 1960S – o INDIA’S FIRST ADVERTISING CONVENTION WAS HELD IN 1960o FOCUS SHIFTED TO MARKETING ORIENTATIONo PROFESSIONALISATION WITHIN AGENCIES HAPPENED. A MORE STRUCTURED

ORGANIZATION CAME INTO EXISTENCE.o 1ST ASIAN ADVERTISING CONGRESS WAS HELD AT NEW DELHIo CONSUMER RESEARCH DATA FIRST GENERATEDo MRI (MARKET RATING INDICES) INTRODUCEDo SHOP AUDITS INTRODUCEDo NRS I AND II CONDUCTEDo CREATIVITY WAS EMPHASIZEDo PHOTOGRAPHY FOUND INCREASING USE


1970S – o MEDIA BOOMo SPECIAL MAGAZINES CAME INTO EXISTANCEo 2ND ASIAN ADVERTISING CONGRESS WAS HELD AT NEW DELHIo LIFESTYLE STUDIES, POSITIONING CONCEPTS WERE DISCOVERED AND

IMPLEMENTEDo RURAL MARKETING GAINED IMPORTANCE


1980S – o INDIANISATION OF WESTERN ADVERTISINGo PUBLIC SECTOR ADVERTISINGo EXPANSION AND DIVERSIFICATION OF AGENCIESo AUG 15TH 1982 – COLOUR TV INTRODUCEDo RADIO COMMERCIALS INTRODUCEDo NRS III BY IMRBo COLOUR PRINTING MORE POPULARo REGIONAL BROADCASTS, EXPANSION OF RADIOo FORMATION OF INDIAN CHAPTER OF INTERNATIONAL ADVERTISING ASSOCIATIONo FORMATION OF ASCIo ADOPTION OF A NEW CODEo CONCEPT OF SPONSORED PROGRAMMES ON TV


1990S – o NRS IV ( 2 SURVEYS – ORG AND IMRB-MARG)o NICHE MAGAZINESo EMPHASIS ON DIRECT MARKETINGo INTRODUCTION OF SATELLITE TV IN INDIAo CNN – 1ST CHANNEL TO BE BEAMED TO INDIAo DD METRO TO COUNTER SATELLITE CHANNELSo DD AUDIENCE SURVEYSo MOVIE CHANNELS AND PAY CHANNELSo FM RADIOo EMPHASIS ON BRAND EQUITYo INTERNATIONALISATION OF ADVERTISINGo NRS Vo IRS SURVEYo CONSUMER TRACKING AND SATISFACTION STUDIES


TODAYo INTERNATIONALISATION OF DOMESTIC AGENCIESo INTERNET ADVERTISINGo MOBILE ADVERTISINGo AUGMENTED REALITY ADVERTISINGo THE ROLE OF THE ADVERTISING AGENCY – CHANGING TO THAT OF A

MARKETING CONSULTANT


TYPES OF ADVERTISING AGENCIES


FULL SERVICE AGENCY• PROVIDES A RANGE OF MARKETING SERVICES

o ACCOUNT MANAGEMENTo CREATIVE SERVICESo MEDIA PLANNING & BUYINGo RESEARCHo AUXILIARY SERVICES

SERVICES DIRECTLY RELATED TO ADVERTISING SUCH AS COPYWRITING, ARTWORK, PRODUCTION OF ADS, MEDIA PLANNING ETC

MOST LARGE SACALE ADVERTISING AGENCIES OF TODAY ARE FULL SERVICE AGENCIES


MEGA AGENCIES

• CONCEPT OF 1980S• MERGER OF TWO OR MORE AGENCIES• PROMPTED BY MERGERS & GLOBALIZATION• FINANCIAL PRESSURES• SERVICE MULTINATIONAL CLIENTS• 1986, SAATCHI & SAATCHI, A LONDON BASED – ONE OF THE LARGEST

AGENCINES IN THE WORLD, STARTED THE MOVEMENT


MODULAR AGENCY (A LA CARTE AGENCY)

• A FULL SERVICE AGENCY THAT SELLS ITS SERVICES ON A PIECE MEAL BASIS

• FEE IS CHARGED FOR ACTUAL WORK UNDERTAKEN• AUXILIARY SERVICES ARE FOCUSED UPON


CAPTIVE AGENCY

• OWNED COMPLETELY BY THE ADVERTISER / MARKETER• REQUIRES HIRING OF SUITABLE MANPOWER AND INVOLVES LARGE

INFRASTRUCTURE• NOT DESIRABLE UNLESS THE BUSINESS IS PROFITABLE AND

SUSTAINABLE IN THE LONG RUN• CAN UNDERTAKE TO SERVE SEVERAL OTHER CLIENTS, IF THE OWNER SO

DESIRES


CREATIVE BOUTIQUE

• PROVIDE ONLY CREATIVE FUNCTIONS AND NOT FULL - SERVICE• COPY WRITING, ARTWORK AND PRODUCTION OF ADS • MERGE WITH OTHER AGENCIES TO PROVIDE A WIDE RANGE OF

SERVICES


SPECIALIST AGENCY

• AGENCY THAT SPECIALIZES ONLY IN CERTAIN SPECIFIC ADVERTISING FUNCTIONAL AREA

• FOR EXAMPLE: SOWBHAGYA ADVERTISING AGENCY CONCENTRATES ONLY ON SPECIALIZED FINANCIAL ADVERTISING


ETHNIC AGENCY

• SERVICE VARIED CLIENTS IN LOCAL MARKETS• HELP IN UNDERSTANDING LOCAL CONSUMER AND MARKET

CHARACTERISTICS• HELP IN ADVERTISING IN A LANGUAGE THE LOCAL CONSUMER AND

MARKET UNDERSTANDS• USUALLY FREELANCERS AND CONSULTANTS, HOWEVER, A FULL SERVICE

ETHNIC AGENCY CONCEPT IS EVOLVING


FREELANCERS & CONSULTANTS

• PROVIDE SPECIALIZED SERVICES AS PART TIME AGENCIES• TREND PICKING UP IN INDIA


STRUCTURE OF AN ADVERTISING AGENCY

EVOLUTION OVER THE DECADES


TRADITIONAL AGENCY STRUCTURE

Account / Client Service DepartmentProduction DepartmentCreative DepartmentFinance DepartmentMedia Buying & Planning Department


HYBRID AGENCY STRUCTURE

Account / Client Service Department

Production Department

Creative Department

Finance Department

Media Buying & Planning

Department

Human Resource

Department

Research Department

Operations & Administrations Department


ROLE AND FUNCTIONS


Idea Generation• Manufacture ideas• Create intellectual

capital• Create & Sell varied

ideas

Brand Building• The agency’s

purpose is to create & direct communication about a product or service so that the brand is perceived to have a unique value or brand personality


o THE MAIN ROLE OF AN ADVERTISING AGENCY IS TO WORK WITH THE CLIENT TO DEVELOP AN ADVERTISING CAMPAIGN

o AD AGENCIES COMBINE THEIR CREATIVE AND RESEARCH EXPERTISE WITH THE INPUT OF THE CLIENT TO DEVELOP A CAMPAIGN THAT APPEALS TO CUSTOMERS

o WHEN USED PROPERLY, AN AD AGENCY CAN SAVE ITS CLIENT (S) THE TIME OF CREATING ITS / THEIR OWN CAMPAIGN, CAN PROVIDE MARKET AND INDUSTRY EXPERTISE, AND CAN HELP INCREASE REVENUE OR IMPROVE BRAND RECOGNITION


FUNCTIONS OF AN ADVERTISING AGENCY

Account Management

Media Planning

Ideation

Creatives

Research

Delivering The Message


THE ADVERTISING PROCESSINTEGRATED APPROACH


Client Briefing & Planning

Ideation & Research Budgeting

Media Planning & BuyingReleaseMeasurement


HOW ADVERTISING AGENCIES GAIN CLIENTS

Referrals

Solicitations

Presentations

Public Relations Image, Reputation


CLIENT – AGENCY RELATIONSHIPCHANGING DYNAMICS


• THE CLIENT IS ULTIMATELY A CONSUMER FOR AN ADVERTISING AGENCY• CLIENTS REQUIRE THEIR AGENCIES TO BE MORE IN SYNC WITH THE

MARKET AND THE CONSUMER AND DELIVER CAMPAIGNS THAT SUIT NOT ONLY THE BRAND OBJECTIVES BUT ALSO THE CONSUMER NEEDS AND CREATE LONG TERM BRAND VALUE

• TO KEEP UP WITH THE CLIENT REQUIREMENTS, ADVERTISING AGENCIES OFTEN HIRE SPECIALISED AGENCIES


AGENCY FEE STRUCTURE• % OF GROSS BUDGET / COST

• USUALLY 15% OF GROSS BUDGET / COST• FEES

• USUALLY BASED ON NEGOTIATED HOURLY RATE• FIXED FEE (RETAINER)• COST – PLUS FEE

• PERFORMANCE INCENTIVES• MEDIA COMMISSIONS

• 15% MEDIA COMMISSION


CHALLENGES ADVERTISING AGENCIES FACE

• IDENTIFY & HIRE TALENT• KEEP UP WITH TECHNOLOGY• WORKING COST ESCALATION• CLIENT BUDGET CONTROL• CONSUMER PREFERENCES• CLIENT PERCEPTIONS

• INTERNAL PROCESS• REGULATORY HURDLES• COMPETITION• CONSUMER TRENDS• CULTURAL PRACTICES• POLITICS


FACTORS TO NOTE WHILE SELECTING AN ADVERTISING AGENCY• HAS THE AGENCY FULLY UNDERSTOOD

THE BRIEF?• HOW DOES THE AGENCY PERCEIVE

OUR PRODUCT / SERVICE / IDEA?• DO THEY KNOW HOW TO USE MARKET

RESEARCH?• WHAT IS THE AGENCY’S ATTITUDE

TOWARDS COSTS? WILL IT SAVE US MONEY?

• HOW IMPORTANT WILL OUR ACCOUNT BE TO THE AGENCY? WILL WE BE ONE OF ITS LARGER ACCOUNTS, OR SIMPLY A SMALL FISH IN A VERY LARGE POOL?

• IS THE AGENCY PROFESSIONAL / BUSINESS LIKE?

• WILL THEY FIT WITH OUR WAYS OF WORKING?

• ARE THEY WILLING AND ABLE TO BE BUSINESS PARTNERS, OR WILL THEY SIMPLY BE SUPPLIERS? (THIS DEPENDS – OF COURSE – ON HOW WE SEE OUR OWN STYLE OF DEALING WITH AGENCIES)

• HOW IS THE AGENCY’S REPUTATION IN THE MARKET?

• HOW IS THE AGENCY’S WORK CULTURE? ETHICS? PROCESSES?

• CAN THE AGENCY WORK WITH US INTERNATIONALLY?

TOP ADVERTISING AGENCIES IN INDIA• OGILVY• J. WALTER THOMPSON INDIA – JWT (FORMERLY HINDUSTAN THOMPSON

ASSOCIATES)• MUDRA COMMUNICATION PVT. LTD• FCB-ULKA ADVERTISING LTD• RK SWAMY/ BBDO ADVERTISING LTD• GREY WORLDWIDE (INDIA) PVT. LTD – SUBSIDIARY OF GREY WORLDWIDE• LEO BURNETT INDIA PVT. LTD• CONTRACT ADVERTISING INDIA LTD• EVEREST ADVERTISING (PART OF THE YOUNG & RUBICAM ADVERTISING

CONGLOMERATE)• LOWE WORLDWIDE (FORMERLY LOWE LINTAS)• SAATCHI & SAATCHI• REDIFFUSION• DENTSU (FORMELY A PART OF REDIFFUSION WITH YOUNG & RUBICAM)


ICONIC BRANDS CREATED BY ADVERTISING


Murphy Baby Liril Girl Dalda

Kolaveri Di Tata Salt Amul Girl


Parle G Girl Rasna Girl Cadbury’s Dairy Milk

Ambassador Car Maruti 800 ThumsUp


7UP – Fido Dido Nirma Girl Priety Zinta - Perk

Shahid Kapoor - Complan Bajaj Scooter Air India - Maharaja

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Role of Advertising Agency