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Any, paid form of non-personal presentation of ideas, goods and services by an identified sponsor is an advertisement. It is the most effective tool for communicating a message from the marketer to a group of people. It communicates information about the product and persuades or influences people to act in favour of the message conveyed in advertisement; like buy a particular product, vote for a candidate, donate money to a noble cause etc. Some times advertisement may persuade individuals to act against; like the ads highlighting the dangers of using narcotic drugs or

alcohol. It also reminds people about something which has to be done. Advertising involves several steps such as Setting advertising objectives; deciding on the advertising budget; choosing the advertisement message and media and measure its effectiveness; evaluating advertisement effectiveness

Functions of Advertisement
The functions may vary depending on the advertiser and its particular objectives. It usually include one or more of the following

 To differentiate products from their competitors  To communicate product information  To urge product use  To expand product distribution  To increase brand preference and loyalty


Report  To reduce overall sales cost

Participants in Modern Advertising
 Advertiser or Clients An advertiser can be a manufacturer or a distributor or a public sector company or any government department. They are the sponsors of advertising. All major advertisers maintain an advertising department. The Advertising Manager, who is in charge of managerial and operational functions, heads the department.  Advertising agency An Advertising agency or ad agency is a team of experts appointed by clients to plan, produce advertising campaigns in the media  Media organizations The medias can be Print, Broadcast, Outdoor, Transits, Direct marketing, Cinema or Internet. They sell space or time.  Marketing communication specialist organizations, and place

which include

♦ Direct response agencies
Provide a variety of services, including database management, direct mail research, media service, and creative and production capabilities.

♦ Sales promotion agencies


Report Develop and manage sales promotion

programs such as contests, sweep stakes, refunds and rebates, premium and incentive offers and sampling programs.

♦ Public relations firms
Develop and and implements programs and to manage the organization’s publicity, image, affairs with consumers including other relevant publics, employees,

suppliers, stockholders, government, trade unions and general public.

♦ Interactive agencies
Specialized organization marketing that communication in the specialize

development and strategic use of various interactive marketing tools such as websites for the Internet, banner ads, CD-ROMs etc.  Collateral Services They include marketing research companies, package design firms, consultants, media buying services, photographers, printers, video production houses and event marketing services companies.  Free-lancers These are professionals who work independently and have a successful track record. They are copywriters; jingle singers, artists, visualizers, technical directors etc.



Major companies use an advertising agency to assist them in developing, preparing and executing their promotional programs. An ad agency is an organization that specializes in planning and executing advertising programs for its clients. The use of an advertising agency may be helpful because of its experience and objectivity in advertising.

An ad agency can range in size from a one or two persons operation to large organization, the services offered and functions performed will vary.

The agency, which is capable of providing all the services necessary to develop, creates and executes advertising for its clients. It offers its clients a full range of marketing, communications and promotions services, including planning, creating and producing the advertisement, performing the research and selecting the media.



The organizing of a full service Advertising Agency by function is shown as below:

Chief Executive Officer

Account Management * Client Services and

Creative Services * Copy * Art * Production * Traffic

Marketing Services * Research * Account planning * Media

Agency Management * Human

* Creative Services * Finance


A variety of functional experts who are specialists in particular skills become involved as the agency moves from understanding the product and the market to planning, creating, executing, and evaluating the advertisement. These Specialized functions include account management, creative services, marketing services, and agency management. Although these functional areas appear to


Report be separate, they co-ordinate and integrate their efforts so that they can most effectively serve each client.

Account Management
The account management function is the main link between the agency and the client. Account Executive is considered to be the Key executive of the agency. It is a pivotal but a pressurized role because AE works for the agency but on behalf of the client, so priorities sometimes conflict. The AE represents client within the agency, marshalling agency resources, keeping ad creation, production and placement on schedule; and pushing for the agency’s best efforts. At the same time, the AE is the voice of agency to a client, representing agency’s viewpoint and working to get approval for the agency’s work. In a large agency, an Account
Supervisor, who is supervised in turn by agency’s Director of Account Management, supervises several account executives.

Creative Services
The second major function of an advertising agency is Creative Services. The Creative Director supervises all the activities within this function. Under him there will be Copywriter or Copywriters- often called the "idea persons," the copywriter prepares the copy-- the message the advertiser wishes to present. In the final stages of the copy, the copywriter works with various specialists, including the art-and-layout director and the account executive.


Report The Art Director supervises creation of the art, including such visual elements as the designs, illustrations, Photos, and type that appear in Print ads and commercials.

After Clients have approved the agency’s creative concepts, the Production Department, supervised by creative director, translate the ads and copy into finished ads. There can be Print Production Managers or Broadcast Production Managers based on the media to be selected. Holding together the diverse duties of all the duties of all these creative departments is the Traffic Department, which works closely with each account executive to coordinate all aspects of development and production. It is an important function because agencies typically work on many ads simultaneously, and the process of designing, producing and placing each ad involves many steps. It is the job of traffic department to see that the agency people meet their deadlines so that ads are completed and submitted to the media on time.

Marketing Services
The people in marketing services figure out what audience the advertising will target, what strategies that influence the advertising to act, and which media will best reach the audience. The Research Director, assisted by Market Research Specialists, investigates the current and potential customers for a product, looks at what motivates them to act and gives the creative services people the background they need to create effective ads. Research Specialists test the audience reaction to various versions of a proposed ad, and once the ad has run, they measure the


Report audience response. They conduct the Pre test and Post-test for measuring ad effectiveness. Account Planning is a research-based discipline that represents the customers view point and feelings about the product and the advertisement. They work with Creative Experts and Media Specialists to apply this knowledge when creating advertising aimed at appropriate audience.

The Media Director is responsible for finding the best media at the best price that will most effectively reach the client’s target audience. Under him, there is a Media planner, who decides which media to use, when to use them and at what cost; the Media buyer, who books the time or the space needed for a commercial or an ad; and Media researcher, who supports media planning and buying by analysing the number and type of people each medium reaches.

Agency Management
The function of Agency Management involves running the agency’s day-to-day activities. It covers a range of tasks; two of the most important tasks deal with Human Resource and Finance. As every HR department does, here also this department is responsible for hiring, firing and training agency employees. They coordinate employees’ salary, benefits and other details. Financing and accounting task involve an enormous amount of paper work. They check on financial transactions of an agency. In addition they keep a close eye on agency income and expenses and helps Top-level management track profitability.



Some agencies prefer to formalize the group system by using group assignments as the basis for all or part of the agency’s official structure. Such an agency defines its structure as a series of formal, relatively self-contained groups. A functional expert in account management, creative services, media and research is permanently assigned to each group, which handles all advertising functions of one major advertiser or perhaps several smaller advertisers.

A limited service agency concentrates on selected advertising services. Over the past few decades, several alternatives to full service agencies have evolved, including Creative Boutiques and Media buying services.

Creative Boutique
It is an advertising company that restricts its services to developing innovative advertising concepts and messages. These specialized companies have developed in response to some clients’ desires to use only the creative talent of an outside provider while maintaining other functions like media planning, research etc. internally.



Media buying services
These types of agencies handle only media planning, buying, and placement. Some media buying services do help advertisers plan their media strategies. Media buying services can negotiate price reductions and in turn can benefit advertisers.

The relationship between an advertiser and agency is like one plus one three: when the combination clicks, it can produce exciting, creative, effective advertising that goes beyond merely getting the job done. Generally there are four patterns of client agency relation ship..

 Parent-Child relationship –Agency holds the hand of the client and guides him at every stage.  Equal Partnership relationship-Both the agency and the client are fairly demanding of each other/They sort out their problems jointly.  Unequal Partnership relationship- The client feel no need to understand the agency. It is really the agency, which is expected to understand the client.  Deliver-and –out relationship- The client orders when there is a need. The client keeps relationship with several agencies. The agency supplies the service and closes the deal



Many successful Client agency relationships go on for a number of years, long term relationships are becoming less common. There are a number of reasons why advertisers switch agencies and how an agency gets clients.

How Agency gets Clients---An agency gets clients due to various reasons.  Image and Reputation  Presentations  Public relations  Solicitations  Referrals  Competence  Expertise  Compatibility  Cost consciousness

Why Advertisers switch Agencies---Some of the more common reasons agencies lose clients follow:  Poor performance or service  Poor creative outputs. -11-

Report  Poor communication  Unrealistic demand by the client  Personality conflicts  Personnel changes  Changes in size of the client or agency  Conflicts of interest  Changes in the clients corporate and / marketing strategy  Declining sales  Conflicting compensation methods  Changes in policies

Advertising is an effective tool for marketing as long as it is used wisely. The improper usage of an advertising campaign may cause hazard to the society. The purpose of the advertisement is not to manipulate people by exaggerating truth or concealing limitations. An effective advertisement can attract the attention of people, rouse their interest, build a desire in them and make them to act towards a specific product or service. To be an effective one, advertising should also be an ethical one. It is only possible with combined efforts of the participants in advertising. Among these participants, an Ad agency plays a crucial role. So it is essential for every person in the advertising agency to carefully examine the social aspects of advertising along with the creative and production sides.


Report _____________________________________________________________________ Reference: Foundations of Advertising : Chunawalla S.A & Sethia.K.C 4th revised Edition 2003 Himalaya Publishing House, New Delhi Advertising excellence : Bovee, Thill, Dovel and Wood International Edition 1995 McGraw Hill Inc, New York