ADVERTISING AGENCIES

DEFINITION
An ad agency is a service provider that works for clients to create an effective and goal oriented advertising campaign aimed at representing the company positively in the eyes of its target customers

FUNCTIONS OF AD AGENCY
TALENT AND CREATIVE PRODUCTION : This

includes formulating plans for creative strategies, copy or script writing, visualization, designing, layout, shooting of films, editing , giving music. RESEARCH : This includes the study about the product and
the company by the agencies in order to distribute the message to the public and is used as a tool to test the consumer reaction towards the products and services.

Contd..

MEDIA PLANNING :

In this function, decisions are taken for the type of message you will create for the company and what media will be most helpful in sending this message to the public. MONITORING FEEDBACK : By monitoring consumer feedback, a decision on whether to revise the message, the medium, the target audience or all of them can be made.

CONTD
OTHER SERVICES

Public relations
Organizing exhibitions and fairs Preparing all kinds of publicity material

Planning and organizing special events (event management)

Direct marketing

IMPORTANCE OF AD AGENCY OBJECTIVITY & PROFESSIONALISM : Advertising agencies are highly professional. Objectivity is a major virtue of ad agency. They operate in a strange way. While they take up advertising for others, agencies hardly advertise themselves. Ad agencies being outside intermediaries can be objective.

 Cost effective :
If an organization wants to hire people to do its advertising, it can not provide them work all through the year. Also most experts in the fields of advertising like directors, musicians, photographers, charge huge amounts and are often not affordable..

Services Provided by Agencies

Agency Services
Account Service Marketing Services
Research department may design and execute research programs

Creative Services

The link between agency and client Managed by the Account Executive

Creation and execution of ads Copywriters, artists, other specialists

Media department may analyze, select and contract media resources

2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

PRIMARY SERVICES
complete a marketing analysis develop an advertising plan prepare a creative strategy create advertising executions develop and implement a media plan handle billing and payments

integrate other marketing communications

TOP 5 AD AGENCIES IN INDIA Adbur Pvt Ltd Akshara Advertising Mudra Communications Ltd Chaitra Leo Burnett Pvt ltd Crayons Advertising and Marketing Pvt. Ltd

TOP 5 AD AGENCIES IN THE WORLD

Rank 1 2 3 4 5 Agency Omnicom Group WPP Group Interpublic Group of Companies Publicis Groupe Dentsu* Headquarters New York City LONDON New York City Paris Tokyo Revenue (US$ millions) 10,481.1 10,032.2 6,700.0 5,107.2 2,887.8

agency organization chart

Board o f Direct ors [Cha irm an/CEO] Pre sident [COO] Other Mark e ting Com munica tions Services [PR, e tc. ] St rate gy Review Bo ard [Mana gme nt Com mitt ee] Off ice Manag eme nt [Perso nnel, Acco unting, Lega l, et c. ]

Acco unt Mg mt . Direct or

Crea tive Exec CD

Rese arch Direct or

Media Dept. Direct or

Manage ment Supe rvisor

Asso ciate Crea tive Direct or

Pro ject Manage rs

Asso ciate Media Direct or

Acco unt Executive

Crea tive Group:

Rese arch Assist ants

Media Supe rvisor

Asst . Acco unt Executive

Copy Spvr. & Copywrit ers

Art Supervisor & Art Directors

Media Planner

Media Buyer

Broa dcas t Pro duct ion

Print Pro duct ion

Analyst s

Tra ffic

creative department
responsibility

the creative department is responsible for creating and producing the print and broadcast advertising

strategy is key
good creative work is always guided by a creative strategy that sets forth goals to be accomplished and key message points to be relayed

media department
The media department has two main functions -

planning and buying.

The planning group handles more strategic marketing and media issues. The buying group handles media negotiations and implementation.

research department
interpret market environment
gather and analyze research data. primary and secondary techniques

determine consumer needs/perceptions

understand problems

advise how ads can meet strategic goals

help find solutions

Research Report

TYPES OF AD AGENCY
Generalized Advertising Agencies Creative agencies specialize in "creative" or design-based

business models: their basic interest is in the creation of the advertisement or branding. Other ("full-service") agencies offer design in conjunction with media buying. Media agencies concentrate on media buying. (In the 1990s, media and creative were often unbundled in the interests of economies of scale in buying media.) The client who chooses to use a design only based advertising agency must assume some of the advertising purchasing. These are activities that are routinely handled by an agency with a media buying option.

Specialist Advertising Agencies

In addition to the full-service, general-line advertising

agencies, there are also agencies that specialize in particular kinds of advertising: recruitment, helpwanted, medical, classified, industrial, financial, direct-response, retail, yellow pages, theatrical/entertainment, investment,

In-House Advertising Agencies

Some advertisers believe that they can provide such

advertising services to themselves at a lower cost than would be charged by an outside agency.

Interactive agencies
Interactive agencies may differentiate themselves by

offering a mix of web design/development, search engine marketing, internet advertising/marketing, or ebusiness/e-commerce consulting. Interactive agencies rose to prominence before the traditional advertising agencies fully embraced the Internet. Offering a wide range of services, some of the interactive agencies grew very rapidly, although some have downsized just as rapidly due to changing market conditions. Today, the most successful interactive agencies are defined as companies that provide specialized advertising and marketing services for the digital space

Search engine agencies

Lately, pay per click (PPC) and search engine

optimization (SEO) firms have been classified by some as 'agencies' because they create media and implement media purchases of text based ads. This relatively young industry has been slow to adopt the term 'agency', however with the creation of ads (either text or image) and media purchases, they do technically qualify as 'advertising agencies'.

Social media agencies

Social media agencies specialize in promotion of

brands in the various social media platforms like blogs, social networking sites, Q&A sites, discussion forums, microblogs etc. The two key services of social media agencies are: social media marketing online reputation management

Healthcare communications agencies

Healthcare communications agencies specialize in

strategic communications and marketing services for the Healthcare and Life Science industries. These agencies distinguish themselves through an understanding of the strict labeling and marketing guidelines mandated by the U.S. Food and Drug Administration (FDA) and industry group guidelines, most notably ADVAMED and PHARMA.

Medical education agencies

Medical education agencies specialize in creating

educational content for the Healthcare and Life Science industries. These agencies typically specialize in one of two areas: Promotional education - education and training materials tied to the promotion of a given product or therapy Continuing medical education - accredited education and training materials created for continuing physician and medical professional education.

Planning The Best Message

A I D A A - Attention I - Interest D - Desire A - Action

How Agencies Gain Clients

Referrals

Presentations

Solicitations

Public Relations

Image, Reputation

Why Agencies Lose Clients

Personnel changes Poor performance Poor communications Changes in size

Changes in strategy
Declining sales

Unrealistic demands

Payment conflicts Policy changes

Personality conflicts

Conflict of interests

Advertising Strategy

Target Audience

Advertising Objectives

Advertising Budget

Creative Strategy

Advertising Media and Programming Schedules Evaluate the Effectiveness of the Strategy

Role of the Advertising Agency

Target Audience

Advertising Objectives

Advertising Budget

Creative Strategy

Advertising Agency
Advertising Media and Programming

Evaluate the Effectiveness of the Strategy

Advertising Agencies in Perspective

Fast change has come to the advertising industry. Huge, integrated agencies face a challenging future. Do clients want a full-service agency? The business model is in need of change. The basis of compensation continues to be debated and altered. Specialists (e.g. media buying services) are being used. Importantly, the core of the creative process is the agency. Several methods are available to evaluate advertising results.

Pros & Cons of In-House Agencies

+ Positive
Cost Savings

- Negative
Less Experience

More Control

The In-house Agency

Less Objectivity

Better Coordination

Less Flexibility

2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Coca Colas in-house boutique created this popular spot

Young & Rubicam has handled Dr. Pepper for over 30 years

Case Study.
In 1983, Apple computer was planning the introduction of macintosh pc :- to take on IBM. Apples strategy called for the introduction of the macintosh to be a major event that would generate immediate support for the new product. The ad agency, chiat/ days, was given the creative challenge of coming up with a blockbuster idea that would result in a dramatic commercial to introduce the mac. Chiat/days team developed a commercial based on the concept of Big Brother.(purportedly symbolizing IBM) from George Orwells classic novel 1984. Who castigated communism with Big Brother attitude. The ad. Used stark images of orwells dystopia (life is extremley bad because of deprivation or oppression or terror due to communism) and a dramatic scene of a young women throwing a mallet (wooden hammer) through a movie screen to desteroy the controling force. More than $ 500000 was spent to the produce the 1984 commercial. when the commercial was first shown at annual sales meeting in october 1983, there was stunned silence followed by a 15 minutes standing ovation. Apple was ready to showcase the 60 second commercial in two spots during the 1984 super bowl that was cost $ 500000 each. But there was one problem getting approval from apples board for the avant-garde ad and the million dollar media purchase. The board thought the commercial was too

Cont.

Controversial and might be detrimental to apples image, particularly in the business market. The cost-consious board also thought the super bowl rates were too expensive and asked the agency to sell off the two spot. The agency could sell one spot, and the offer for the second spot was not attractive. Two days before the game , apple board reluctantly approved airing the commercial after a great deal of persuasion by the agency for the second spot. The Super bowl is the biggest football game of the year, in USA, a premier marketing event. It draws the largest TV audience, its appeal spans various age groups, regions and it is seen in more than 60 countris. It is one occasion where as much attention is paid to commercials as to the program and the spots receive enormus amount of hype and publicity and its exorbitant cost could be matched by huge viewing audience. The super bowl showing of 1984 was the only time it ever appeared as a commercial spot on network TV. The impact of the ad was tremendous. Most importantly, the ad. Helped Apple achieve a very ambitious sales goal. Apple projected sales of 50,000 macs in the first 100 years: actual sales surpassed 72,000 units.

Questions:1) Advertising New macintosh on a super bowl was indeed a famous cutting edge creative work and a bold initiative. Critically evaluate the role and contribution of the agency and the Apples board.

2) How did Apples bold 1984 commercial score on all fronts?

3) 1984 commercial was perhaps the beginning of integrated marketing communications. Elaborate.