UNIT-I

Advertising

1.1 Concept of Advertising

1.2 Importance of Advertising
1.3 Functions of Advertising
1.4 Types of Advertising
1.5 Reasons for Advertising
1.6 Economic, Social, Ethical Aspects of Advertising
1.7 Advertising and Marketing Mix
1.8 Advertising as a Tool of Marketing Communication
1.9 Advertising role in Branding
1.10 Functions and Types of advertising agencies
1.11 Structure and Process of advertising agencies
1.12 Agency Services and Agency-Client Interface

1.1 Conceptof Advertising

The word advertising comes from the latin word "advertere meaning to turn the minds of towards".
MEANING
Advertising is a marketing tactic involving paying for space to promote a product, service, or cause.
DEFINITIONS
Any paid form of non-personal presentation of ideas, goods and services by an un-identified sponsor.
-----American Marketing Association (AMA)
"Advertising consists of all the activities involved in presenting to an audience a non- personal, sponsor-
identified, paid-for message about a product or organization. -William J. Stanton
Advertising is to give public notice or to announce publicity-Webstar
Advertising is the means of mass selling that has grown up parallel with and has been made necessary to
mass production. –Gardner

PEOPLE ACTIVELY INVOLVED IN ADVERTISING PROCESS

1. Advertiser: Seller who manufacture and market consumer products are the prominent group
of advertisers. Hindustan Unilever , Proctor and Gamble, Seimen And Larson And Toubro Are
the examples of advertisers. Also the retailers are the second prominent segment among
advertisers. They stock the products and sell them to the ultimate consumers. Government and
social organization are also the active participant in this category.
An advertiser has two options viz.
 to design, develop and produce and advertising message and get it placed in desired
media directly through his own sales or advertising department, or
 to entrust the entire job of advertising to a team of highly professionalized, specialized,
independent, advertising agency

2. Target audience: It refers to the recipient of the advertising message. Every message is either
directed to a mass audience and class audience. Advertising desire to cover this target
audience for promoting sales. Advertising message intends to cover the potential user and non

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 user who may purchase the product in future. The messages are also directed to the user of
the competitor's product so that they switch over the advertiser's products.
3. Advertising Agencies: An advertising agency is composed of creative people, who conceive
design, develop and produce, advertising message with creative ideas and place it in the
desired advertising media, for and on behalf of its client (the advertiser). The advertising
agencies usually charge a commission of 15% on the media bills from the media owners. In
addition, they charge out-of pocket expenses to their clients, i.e. the advertisers. They employ
copywriters, artists, photographers, Typographers, layout designers, editors and such other
creative people.
4. Advertising Production People (Artists): The production of impressive and persuasive
advertisements is possible only with the active help and creative spirit of the artists like
copywriters, artists, photographers, typographers, layout designers, editors and such other
creative people. Such people are usually employed by the ad agencies or, their services may be
hired by the ad agencies on job basis.
5. Target Audience (Readers, Listeners, Viewers and Present and Future Buyers) : Advertising
messages are given to the audience. The target audience may be classified into the following
three categories, viz.,
 existing or, current consumers, who are reminded and influenced to continue their
patronage and to increase the volume of their buying,
 consumers, who buy and use, a competitor’s brand; hence they are persuaded to buy
the advertised brand, instead of the competitor’s brand; and
 those consumers, who do not use any such product; and even then, are persuaded to
buy the advertised product.
6. Mass Media: The advertising agencies guide their clients (advertisers) in selection of the most
appropriate advertising media, which is known as „media planning‟. Each medium has its own
merits and demerits. Advertising messages are communicated to the target audience through
different mass media, such as,
 Print Media: They consist of newspapers, magazines, journals, handbills, etc.
 Electronic Media: They consist of radio, television motion pictures, video, multi-media
and the internet.
 Outdoor Media: They consist off posters, hoarding, handbills, stickers air balloons,
neon sing bill boards, local cinema houses, and transit media.
 Direct Mail: It consist of brouchers, leaflets, pamphlets, letters and return cards
addressed to consumers.
7. Government Authorities: The business of advertising is regulated by the government
department. The government adopts law and regulation which have a direct or an indirect
bearing on the advertising. Apart from this ASCI (Advertising standards council of India) and
ABC (Audit Bureau of circulation) are also some of authorities regulating advertising.
8. Advertising Production Firms: Advertising production firms are the support agencies which
help in the production of advertisement. This includes copywriter, artist, photographers,
typographers, producer, and editors. These are the people who transform ideas into a finished
forms Thus the success and failure of the advertisement depend on these people.

1.2 Importance of Advertising

IMPORTANCE OF ADVERTISING

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Advertising has become an essential marketing activity in the modern era of large scale production and
serve competition in the market. It performs the following functions:
1. Promotion of Sales: It promotes the sale of goods and services by informing and persuading
the people to buy them. A good advertising campaign helps in winning new customers both in
the national as wet as in the international markets.
2. Introduction of New Product: It helps the introduction of new products in the market. A
business enterprise can introduce itself and its product to the public through advertising. A
new enterprise can't make an impact on the prospective customers without the help of
advertising. Advertising enables quick publicity in the market.
3. Creation of Good Public Image: It builds up the reputation of the advertiser. Advertising
enables a business firm to communicate its achievements in an effort to satisfy the customers'
needs. This increases the goodwill and reputation of the firm which is necessary to fight against
competition in the market.
4. Mass Production: Advertising facilitates large-scale production. Advertising encourages
production of goods in large-scale because the business firm knows that it will be able to sell
on large-scale with the help of advertising. Mass production reduces the cost of production per
unit by the economical use of various factors of production.
5. Research: Advertising stimulates research and development activities. Advertising has become
a competitive marketing activity. Every firm tries to differentiate its product from the
substitutes available in the market through advertising. This compels every 5 business firm to
do more and more research to find new products and their new uses. If a firm does not engage
in research and development activities, it will be out of the market in the near future.
6. Education of People: Advertising educate the people about new products and their uses.
Advertising message about the utility of a product enables the people to widen their
knowledge. It is advertising which has helped people in adopting new ways of life and giving-
up old habits. It has contributed a lot towards the betterment of the standard of living of the
society.
7. Support to Press: Advertising provides an important source of revenue to the publishers and
magazines. It enables to increase the circulation of their publication by selling them at lower
rates. People are also benefited because they get publications at cheaper rates. Advertising is
also a source of revenue for TV network. For instance, Doordarshan and ZeeTV insert ads
before, in between and after various programmes and earn millions of rupees through ads.
Such income could be used for increasing the quality of programmes and extending coverage.

1.3 Functions of Advertising

Functions of Advertising:
Advertising has become an essential marketing activity in the modern era of large-scale production and
severe competition in the market.
It performs the following functions:
(i) Promotion of Sales:
Advertising promotes the sale of goods and services by informing and persuading the people to
buy them. A good advertising campaign helps in winning customers and generating revenues.
(ii) Introduction of New Products:

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 Advertising helps in the introduction of new products in the market. A business enterprise can
introduce itself and its products to the public through advertising. Advertising enables quick
publicity in the market.
(iii) Support to Production System:
Advertising facilitates large-scale production. The business firm knows that it will be able to sell
on a large-scale with the help of advertising. Mass production will reduce the cost of production
per unit by making possible the economical use of various factors of production.
(iv) Increasing Standard of Living:
Advertising educates the people about the products and their uses. It is advertising which has
helped people in adopting new ways of life and giving up old habits. It has contributed a lot
towards the betterment of the standard of living of the society.
(v) Public Image:
Advertising builds up the reputation of the advertiser. Advertising enables a business firm to
communicate its achievements and its efforts to satisfy the customers’ needs to the public. This
increases the goodwill and reputation of the firm.
(vi) Support to Media:
Advertising sustains press. Advertising provides an important source of revenue to the
publishers of newspapers and magazines and the producers of T.V. programmes.

1.4 Types of Advertising

CLASSIFICATION AND TYPES OF ADVERTISING

1. Product – Related Advertising

A. Pioneering Advertising
B. Competitive Advertising
C. Retentive Advertising
2. Public Service Advertising
3. Functional Classificaiton
A. Advertising Based on Demand Influence Level.
A. Primary Demand (Stimulation)

B. Selective Demand (Stimulation)

B. Institutional Advertising
C. Product Advertising
A. Informative Product Advertising

B. Persuasive Product Advertising

C. Reminder-Oriented Product Advertising

4. Advertising based on Product Life Cycle

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 A. Consumer Advertising
B. Industrial Advertising
5. Trade Advertising
A. Retail Advertising
B. Wholesale Advertising
6. Advertising Based on Area of operation
A. National advertising
B. Local advertising
C. Regional advertising
7. Advertising According to Medium Utilized

1. Product – Related Advertising

It is concerned with conveying information about and selling a product or service. Product advertising is
of three types, viz,

A. Pioneering Advertising

B. Competitive Advertising

C. Retentive Advertising

i. Pioneering Advertising:
This type of advertising is used in the introductory stages in the life cycle of a product. It is concerned
with developing a “primary” demand. It conveys information about, and selling a product category
rather than a specific brand. For example, the initial advertisement for black – and – white television and
colour television. Such advertisements appeal to the consumer‟s emotions and rational motives.

ii. Competitive Advertising:

It is useful when the product has reached the market-growth and especially the market-maturity stage.
It stimulates “selective” demand. It seeks to sell a specific brand rather than a general product category.
It is of two types:

A. Direct Type: It seeks to stimulate immediate buying action.

B. Indirect Type: It attempts to pinpoint the virtues of the product in the expectation that the
consumer‟s action will be affected by it when he is ready to buy.

Example: Airline advertising.

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Air India attempts to bid for the consumer‟s patronage either immediately - direct action-in which case,
it provides prices, time tables and phone numbers on which the customer may call for reservations; or
eventually – indirect action – when it suggests that you mention Air India‟s name when talking to your
travel agent.

iii. Retentive Advertising:

iv. This may be useful when the product has achieved a favourable status in the market – that is,
maturity or declining stage. Generally in such times, the advertiser wants to keep his product‟s
name before the public. A much softer selling approach is used, or only the name may be
mentioned in “reminder” type advertising.

2. Public Service Advertising

This is directed at the social welfare of a community or a nation. The effectiveness of product service
advertisements may be measured in terms of the goodwill they generate in favour of the sponsoring
organization. Advertisements on not mixing drinking and driving are a good example of public service
advertising. In this type of advertising, the objective is to put across a message intended to change
attitudes or behaviour and benefit the public at large.

3. Functional Classification
Advertising may be classified according to the functions which it is intended to fulfill.

(i) Advertising may be used to stimulate either the primary demand or the selective
demand.

(ii) It may promote either the brand or the firm selling that brand.

(iii) It may try to cause indirect action or direct action.

i. Advertising Based on Demand Influence Level.

A. Primary Demand Stimulation
Primary demand is demand for the product or service rather than for a particular brand. It is intended to
affect the demand for a type of product, and not the brand of that product. Some advertise to stimulate
primary demand. When a product is new, primary demand stimulation is appropriate. At this time, the
marketer must inform consumers of the existence of the new item and convince them of the benefits
flowing from its use. When primary demand has been stimulated and competitors have entered the
market, the advertising strategy may be to stimulate the selective demand.

B. Selective Demand Stimulation

This demand is for a particular brand such as Charminar cigarettes, Surf detergent powder, or Vimal
fabrics. To establish a differential advantage and to acquire an acceptable sort of market, selective
demand advertising is attempted. It is not to stimulate the demand for the product or service. The
advertiser attempts to differentiate his brand and to increase the total amount of consumption of that
product. Competitive advertising stimulates selective demand. It may be of either the direct or the
indirect type.

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 ii. Institutional Advertising
iii. Institutional Advertising may be formative, persuasive or reminder oriented in character.
Institutional advertising is used extensively during periods of product shortages in order to keep
the name of the company before the public. It aims at building for a firm a Positive public image
in the eyes of shareholders, employees, suppliers, legislators, or the general public. This sells only
the name and prestige of the company. This type of advertising is used frequently by large
companies whose products are well known. HMT or DCM, for example, does considerable
institutional advertising of its name, emphasizing the quality and research behind its products.

Institutional advertisements are at consumers or focus them upon other groups, such as voters,
government officials, suppliers, financial institutions, etc. If it is effective, the target groups will respond
with goodwill towards, and confidence in the sponsor. It is also a useful method or introducing sales
persons and new product to consumers. It does not attempt to sell a particular product; it benefits the
organization as a whole.

It notifies the consumers that the company is a responsible business entity and is patriotic; that its
management takes ecologically responsible action, is an affair- motive-action employer, supports the
socialistic pattern of society or provides employment opportunities in the community.

When Indian Oil advertisements describe the company‟s general activities, such as public service work,
this may be referred to as institutional advertising because it is intended to build an overall favorable
attitude towards the company and its family of products. HMT once told the story of the small-scale
industries supplying it with component parts, thus indicating how it aided the development of ancillary
industries.

iv. Product Advertising

Most advertising is product advertising, designed to promote the sale or reputation of a particular
product or service that the organization sells. Indane‟s Cooking Gas is a case in point. The marketer may
use such promotion to generate exposure attention, comprehension, attitude change or action for an
offering. It deals with the non-personal selling of a particular good or service. It is of three types as
follows:-

A. Informative Product Advertising

B. Persuasive Product Advertising
C. Reminder-Oriented Product Advertising
A. Informative Product Advertising:
This form of advertising tends to characterize the promotion of any new type of product to develop an
initial demand. It is usually done in the introductory stages of the product life cycle. It was the original
approach to advertising.

B. Persuasive Product Advertising: Persuasive product advertising is to develop demand for a

particular product or brand. It is a type of promotion used in the growth period and, to some
extent, in the maturity period of the product life cycle.

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 C. Reminder-Oriented Product Advertising:
The goal of this type of advertising is to reinforce previous promotional activity by keeping the brand
name in front of the public. It is used in the maturity period as well as throughout the declining phase of
the product life cycle.

4. Advertising based on Product Life Cycle

A. Consumer Advertising

B. Industrial Advertising

A. Consumer Advertising
Most of the consumer goods producers engage in consumer product advertising. Marketers of
pharmaceuticals, cosmetics, scooters, detergents and soaps, cigarettes and alcoholic beverages are
examples. Baring a few, all these products are all package goods that the consumer will often buy during
the year. There is a heavy competition among the advertisers to establish an advantage for their
particular brand.

B. Industrial Advertising
Industrial executives have little confidence in advertising. They rely on this form of promotion merely
out of fear that their competitors may benefit if they stop their advertising efforts. The task of the
industrial advertiser is complicated by the multiple buying influence characteristics like, the derived
demand, etc. The objectives vary according to the firm and the situation. They are:

 To inform,
 To bring in orders,
 To induce inquiries,
 To get the advertiser‟s name on the buyer‟s list of sources,
 To provide support for the salesman,
 To reduce selling costs,
 To help get items in the news column of a publication,
 To establish recognition for the firm or its product,
 To motivate distributors,
 To recognition for the firm or its products,
 To motivate distributors, to create or change a company‟s image,
 To create or change a buyer‟s attitude, and
The basic appeals tend to increase the rupee profits of the buyer or help in achieving his non-monetary
objectives. Trade journals are the media most generally used followed by catalogues, direct mail

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communication, exhibits, and general management publications. Advertising agencies are much less
useful in industrial advertising.

5. Trade Advertising
A. Retail Advertising

B. Wholesale Advertising

A. Retail Advertising
This may be defined as “covering all advertising by the stores that sell goods directly to the consuming
public. It includes, also advertising by establishments that sell services to the public, such as beauty
shops, petrol pumps and banks.”

Advertising agencies are rarely used. The store personnel are usually given this responsibility as an
added task to be performed, together with their normal functions. The result is that advertising is often
relegated to a secondary position in a retail store. One aspect of retail advertising is co-operative
advertising. It refers to advertising costs between retailers and manufacturers. From the retailer‟s
point of view, co-operative advertising permits a store to secure additional advertising that would not
otherwise have been available.

B. Wholesale Advertising
Wholesalers are, generally, not advertising minded, either for themselves or for their suppliers. They
would benefit from adopting some of the image-making techniques used by retailers – the need for
developing an overall promotional strategy. They also need to make a greater use of supplier promotion
materials and programmes in a way advantageous to them.

6. Advertising based on Area of Operation

It is classified as follow:

A. National Advertising

B. Regional Advertising

C. Local Advertising

A. National advertising
B. It is practiced by many firms in our country. It encourages the consumer to buy their product
wherever they are sold. Most national advertisements concentrate on the overall image and
desirability of the product. The famous national advertisers are:

Hindustan Levers DCM

ITC

Jay Engineering TISCO

C. Regional advertising

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It is geographical alternative for organizations. For example, Amrit Vanaspati based in Rajpura claims to
be the leading hydrogenated oil producer in the Punjab. But, until recently, it mainly confined itself to
one of the vegetable oil brands distribution to Malihabad district (in U.P. near Lucknow).

D. Local advertising
It is generally done by retailers rather than manufacturers. These advertisements save the customer
time and money by passing along specific information about products, prices, location, and so on.
Retailer advertisements usually provide specific goods sales during weekends in various sectors.

7. Advertising According to Medium

The most common classification of advertising is by the medium used. For example: TV, radio, magazine,
outdoor, business periodical, newspaper and direct mail advertising. This classification is so common in
use that it is mentioned here only for the sake of completeness.

DIFFERENT TYPES OF ADVERTISING

Print Advertising– Newspapers, Magazines, Brochures, Flyers
• The print media have always been a popular advertising medium.
• Advertising products via newspapers or magazines is a common practice
Outdoor Advertising– Billboards, Kiosks, Tradeshows and Events
• Outdoor advertising is also a very popular form of advertising, which makes useof several tools
and techniques to attract the customers outdoors.
• The billboard advertising is very popular however has to be really terse andin order to grab the
attention of the passersby.
• The kiosks not only provide an easy outlet for the company products but alsomake for an
effective advertising tool to promote the company’s products.
Broadcast advertising– Television, Radio and the Internet
• Broadcast advertising is a very popular advertising medium that constitutes of several branches
like television, radio or the Internet.
• Television advertisements have been very popular ever since they have been introduced.The
cost of television advertising often depends on the duration of the advertisement, thetime
of broadcast (prime time/peak time), and of course the popularity of the televisionchannel on
which the advertisement is going to be broadcasted.
• The radio might have lost its charm owing to the new age media however the radioremains to
be the choice of small-scale advertisers. The radio jingles have been very popular advertising
media and have a large impact on the audience.
Covert Advertising– Advertising in Movies
• Covert advertising is a unique kind of advertising in which a product or a particular brandis
incorporated in some entertainment and media channels like movies, television showsor even
sports. There is no commercial in the entertainment but the brand or the productis subtly (or
sometimes evidently) showcased in the entertainment show.
• Some of the famous examples for this sort of advertising have to be the appearance of brand
Nokia which is displayed on Tom Cruise’s phone in the movie Minority Report, or the use of
Cadillac cars in the movie Matrix Reloaded.
Surrogate Advertising– Advertising Indirectly

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 Surrogate advertising is prominently seen in cases where advertising a particular
productis banned by law. Advertisements for products like cigarettes or alcohol
which areinjurious to heath are prohibited by law in several countries and hence these
companieshave to come up with several other products that might have the same brand name
andindirectly remind people.
Public Service Advertising– Advertising for Social Causes
Public service advertising is a technique that makes use of advertising as an
effectivecommunication medium to convey socially relevant messaged about important
mattersand social welfare causes.
Like: energy conservation, political integrity, deforestation, illiteracy, poverty and so on.
Celebrity Advertising
Although the audience is getting smarter and smarter and the modern day consumer getting
immune to the exaggerated claims made in a majority of advertisements, thereexist a section of
advertisers that still bank upon celebrities and their popularity for advertising their products.
Using celebrities for advertising involves signing upcelebrities for advertising campaigns, which
consist of all sorts of advertising including,television ads or even print advertisements.

1.5 Reasons for Advertising

1. Advertising generates brand loyalty– Advertising allows for companies to target their customers and
form a lasting connection with them. It instills a sense of familiarity and trust within the consumer,
ensuring that they remain loyal to your business. Advertisements use images, words, and ideals that
target your desired demographic and encourages them to stay devoted to your business.
2. Advertising increases company traffic– Many consumers are more likely to visit a business after
viewing an advertisement. More consumers mean more sales and more business for you. *A survey of
more than 3,000 companies found that advertisers who maintained or expanded advertising over a five-
year period saw their sales increase an average of 100 percent, and companies that cut advertising grew
at a less than half the rate of those who advertised steadily.
3. Advertising gives company a positive image– Advertising tells your consumers and your competitors
that you are open and ready for business. Dynamic and positive advertising can entice consumers to
your business regardless of the economy and competition.
4. Advertising attracts new customers– The market is constantly changing and new consumers are
moving in and out of your area. New consumers mean a new target audience that your advertisements
will reach. Advertising shows consumers that are new to the market that your business is the top of the
line and the one that they want to visit.
5. Advertising promotes repeat business– With all of the choices consumers are able to make, many
once loyal consumers have strayed from previous businesses in search of other options. Advertising
reminds your consumers why they choose your business in the first place and why they should continue
to choose you in the future.
6. Advertising helps a business to compete– There are only so many consumers in the market that are
willing to buy your product at any given time. Advertising helps businesses stay ahead of the game while
competing with other businesses. Advertising is how you convince the consumer that you are the one
they should choose.
7. Advertising produces continuous business– Not every consumer is going to need your business’s
product today, but every day there will always be a new consumer ready to buy. Advertising makes sure
that the consumer knows that when they are in need, your business will be there to help them. A
continuous amount of consumers visiting your business is the first step to increase your sales. The more

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consumers you have, the more business you will have. Advertising creates business now and in the
future.
8. Advertising keeps a business at the top of the consumer’s mind– With so many options available to
consumers oftentimes they will want to shop around and compare different products. Advertising
ensures that your company is always at the front of a consumer’s mind reminding them why they should
choose you.
9. Advertising keeps the consumer up to date– When a new product or event is ready to launch,
advertising allows your consumer to be informed and aware of the details. Advertising does the work for
your consumer, as opposed to forcing your consumer to hunt down the information.
10. Advertising makes money toa company – What it comes down to is; Advertising works. Advertising
attracts customers to your business and increases your sales. When consumers see strong and positive
advertisements they are more willing to buy and ready to choose your business. Invest in advertising for
your business and you will watch it grow and succeed.

1.6 Economic, Social, Ethical Aspects of Advertising

“Every coin has two sides”

Advertising is praised but also criticized by critics in their own ways. Advertising has many positive
impacts along with its negative pictures. As the President of American Association of Advertising
Agencies, John O’ Toole has described advertise is something else. It is not related to studies, but it
educates. It is not a journalist but gives all information. And it is not an entertaining device but
entertains everyone.
Now let’s go through the economic and social aspects of advertising.

Economic aspect of Advertising

Value of Products:
The advertised products are not always the best products in the market. There are some unadvertised
products also present which are good enough. But advertising helps increase value for the products by
showing the positive image of the product which in turn helps convincing customers to buy it.
Advertising educates consumers about the uses of the products hence increasing its value in minds of
the consumers. For e.g. mobile phones were first considered as necessity but nowadays the cell phones
come with number of features which makes them mode of convenience for consumers.
Effect on Prices:
Some advertised products do cost more than unadvertised products but the vice versa is also true. But if
there is more competition in the market for those products, the prices have to come down, for e.g.,
canned juices from various brands. Thus some professional like chartered accountants and doctors are
not allowed to advertise.
But some products do not advertise much, and they don’t need much of it and even their prices are high
but they are still the leaders in market as they have their brand name. e.g., Porsche cars
Effect on consumer demand and choices:
Even if the product is heavily advertised, it does not mean that the demand or say consumption rates
will also increase. The product has to be different with better quality, and more variety than others. For
E.g., Kellogg’s cornflakes have variety of flavors with different ranges to offer for different age groups
and now also for people who want to loose weight thus giving consumers different choices to select
from.
Effect on business cycle:

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Advertising no doubt helps in employing more number of people. It increases the pay rolls of people
working in this field. It helps collecting more revenues for sellers which they use for betterment of
product and services. But there are some bad effects of advertisements on business cycle also.
Sometimes, consumer may find the foreign product better than going for the national brand. This will
definitely effect the production which may in turn affect the GDP of the country.
The economic aspects are supported by the Abundance Principle which says producing more products
and services than the consumption rate which helps firstly keeping consumers informed about the
options they have and secondly helps sellers for playing in healthy and competitive atmosphere with
their self interest.

Social aspect of Advertising:

There are some positive and some negative aspects of advertising on the social ground. They are as
follows.

Deception in Advertising:
The relation between the buyers and sellers is maintained if the buyers are satisfied with what they saw
in advertise and what they got after buying that product. If seller shows a false or deceptive image and
an exaggerated image of the product in the advertisement, then the relation between the seller and
buyers can’t be healthy. These problems can be overcome if the seller keep their ads clean and displays
right image of the product.
The Subliminal Advertising:
Capturing the Minds of the consumers is the main intention of these ads. The ads are made in such a
way that the consumers don’t even realizes that the ad has made an impact on their minds and this
results in buying the product which they don’t even need. But “All ads don’t impress all consumers at all
times”, because majority of consumers buy products on basis of the price and needs.
Effect on Our Value System:
The advertisers use puffing tactics, endorsements from celebrities, and play emotionally, which makes
ads so powerful that the consumers like helpless preys buy those products.
These ads make poor people buy products which they can’t afford, people picking up bad habits like
smoking and drinking, and buy products just because their favorite actor endorsed that product. This
affects in increased the cost of whole society and loss of values of our own selves.
Offensiveness:
Some ads are so offensive that they are not acceptable by the buyers. For example, the ads of denim
jeans showed girls wearing very less clothes and making a sex appeal. These kinds of ads are irrelevant
to the actual product. But then there is some ads which are educative also and now accepted by people.
Earlier ads giving information about birth control pills was considered offensive but now the same ads
are considered educative and important.
But at the last, there are some great positive aspects which help
 Development of society and growth of technologies
 Employment
 Gives choices to buyers with self interest
 Welcomes healthy competition
 Improving standard of living.
 Give information on social, economical and health issues.

Ethical Aspects of Advertising

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Ethics means a set of moral principles which govern a person’s behavior or how the activity is
conducted. And advertising means a mode of communication between a seller and a buyer.
Thus ethics in advertising means a set of well-defined principles which govern the ways of communication
taking place between the seller and the buyer. Ethics is the most important feature of the advertising
industry. Though there are many benefits of advertising but then there are some points which don’t
match the ethical norms of advertising.
An ethical ad is the one which doesn’t lie, doesn’t make fake or false claims and is in the limit of
decency.
Nowadays, ads are more exaggerated and a lot of puffing is used. It seems like the advertisers lack
knowledge of ethical norms and principles. They just don’t understand and are unable to decide what is
correct and what is wrong.
The main area of interest for advertisers is to increase their sales, gain more and more customers, and
increase the demand for the product by presenting a well decorated, puffed and colorful ad. They claim
that their product is the best, having unique qualities than the competitors, more cost effective, and
more beneficial. But most of these ads are found to be false, misleading customers and unethical. The
best example of these types of ads is the one which shows evening snacks for the kids, they use coloring
and gluing to make the product look glossy and attractive to the consumers who are watching the ads
on television and convince them to buy the product without giving a second thought.
Ethics in Advertising is directly related to the purpose of advertising and the nature of advertising.
Sometimes exaggerating the ad becomes necessary to prove the benefit of the product. For e.g. a
sanitary napkin ad which shows that when the napkin was dropped in a river by some girls, the napkin
soaked whole water of the river. Thus, the purpose of advertising was only to inform women about the
product quality. Obviously, every woman knows that this cannot practically happen but the ad was
accepted. This doesn’t show that the ad was unethical.
Ethics also depends on what we believe. If the advertisers make the ads on the belief that the
customers will understand, persuade them to think, and then act on their ads, then this will lead to
positive results and the ad may not be called unethical. But at the same time, if advertisers believe that
they can fool their customers by showing any impractical things like just clicking fingers will make your
home or office fully furnished or just buying a lottery ticket will make you a millionaire, then this is not
going to work out for them and will be called as unethical.
Recently, the Vetican issued an article which says ads should follow three moral principles -
Truthfulness, Social Responsibility and Upholding Human Dignity.
Generally, big companies never lie as they have to prove their points to various ad regulating bodies.
Truth is always said but not completely. Sometimes it’s better not to reveal the whole truth in the ad but
at times truth has to be shown for betterment.
 Pharmaceutical Advertising - they help creating awareness, but one catchy point here is that the
advertisers show what the medicine can cure but never talk about the side effects of that same
thing or the risks involved in intake of it.
 Children - children are the major sellers of the ads and the product. They have the power to
convince the buyers. But when advertisers are using children in their ad, they should remember
not to show them alone doing their work on their own like brushing teeth, playing with toys, or
infants holding their own milk bottles as everyone knows that no one will leave their kids
unattended while doing all these activities. So showing parents also involved in all activities or
things being advertised will be more logical.
 Alcohol - till today, there hasn’t come any liquor ad which shows anyone drinking the original
liquor. They use mineral water and sodas in their advertisements with their brand name. These
types of ads are called surrogate ads. These type of ads are totally unethical when liquor ads are
totally banned. Even if there are no advertisements for alcohol, people will continue drinking.

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  Cigarettes and Tobacco - these products should be never advertised as consumption of these
things is directly and badly responsible for cancer and other severe health issues. These as are
already banned in countries like India, Norway, Thailand, Finland and Singapore.
 Ads for social causes - these types of ads are ethical and are accepted by the people. But ads like
condoms and contraceptive pills should be limited, as these are sometimes unethical, and are
more likely to loose morality and decency at places where there is no educational knowledge
about all these products.

1.7 Advertising and Marketing Mix

ROLE OF ADVERTISING IN MARKETING MIX Marketing mix consist of four important variables of
marketing, i.e. 4Ps-Product, Price, Promotion and Place. Apart from the traditional 4 Ps, there are also
other variables, i.e. Packaging, Position, and Pace. Advertising is an element of promotion. However, it
not only assists in promoting the product, but also affects the other variables of marketing mix. This can
be explained as follows:

4P‟S OF MARKETING MIX

1. Advertising and Product :
A product is normally a set of physical elements, such as quality, shape, size, colour and other features.
The product may be of very high quality .At times, the product is so designed that it requires careful
handling and operations. Buyers must be informed and educated on the various aspects of the product.
This can be effectively done through advertising. Thus, advertising plays the role of information and
education.
2. Advertising and Price
The price is the exchange value of the product. A marketer may bring out a very high quality product
with additional features as compared to competitors. In such a case, price would be definitely high. But
buyers may not be willing to pay a high price would be definitely high. Here comes advertising.
Advertising can convince buyers regarding the superiority of the brand and thus its value for money. This
can be done by associating the product with prestigious people, situations, or events. Alternatively when
a firm offers a low price products the job of advertising needs to stress the price advantage by using
hard hitting copy. It is not just enough to convince,but it is desirable to persuade the buyer. Thus
advertising plays the role of conviction and persuasion.
3. Advertising and Place
Place refers to physical distribution and the stores where the goods are available Marketer should see to
it that the goods are available at the convenient place and that too at the right time when the buyers
need it. To facilitate effective distribution and expansion of market, advertising is of great significance.
Thus advertising do help in effective distribution and market expansion.
4. Advertising and Promotion
Promotion consists of advertising, publicity, personal selling and sales promotion technique.
Businessmen today have to face a lot of competition. Every seller needs effective promotion to survive
and succeed in this competitive business world. Advertising can play a significant role to put forward the
claim of seller, and to counter the claims of competitor. Through effective advertising, sellers can face
competition and also help to develop brand image and brandloyalty.
5. Advertising and Pace
Pace refers to the speed in marketing decisions and actions. It involves among other things the launch of
new products or brand variations at greater speed than before. As and when new brands are launched,

15
advertising plays an important role of informing, educating and persuading the customers to buy the
product.
6. Advertising and Packaging
The main purpose of packaging is protection of the product during transit, and preservation of quality
and quantity. Nowadays, marketers take lot of efforts to develop and design attractive packages as they
carry advertising value. A creatively design package attract the attention of the customers. It also carries
an assurance of quality and creates confidence in the minds of customers to buy the product.
7. Advertising and Positioning
Product positioning aims at creating and maintaining a distinct image of the brands in the minds of the
customers. Through advertising the marketer can convey the positioning of the brand and accordingly
can influence the buying decision of the target audience.

1.9 Advertising role in Branding

Branding and advertising are different facets of a comprehensive marketing strategy. Companies and
organizations use branding to create a look, feel and message for themselves that will be remembered
by consumers. Advertising is used to convey that brand directly to consumers through various media,
such as purchasing radio or television broadcast time, newspaper or magazine space, or online
advertisements.

Advertising has a central role to play in developing a brand image. It informs consumers of the
functional capabilities of the brand while simultaneously inspiring the brand with symbolic values and
meanings relevant to the consumer. Advertising strategists, planners or the creative people in an
advertising agency looking for unique emotional values to add to the brand. They look for ways to create
emotional involvement because this represents the stronger bonding between the brand and target
customer.
Businesses use advertising to spread their brand among the masses as well as to directly sell products
and services to the public at large. Repetition of the company’s message creates a familiarity with the
brand. Advertising is important for companies trying to direct consumer behaviour because it is an
effective method for mass selling and communications.
“A brand that captures your mind gains behaviour”
“A brand that captures your heart gains commitment”
                                                         -Scott Talgo, Brand Strategist
 

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ROLE OF ADVERTISING IN BRAND POSITIONING
 Creates Awareness
Creating awareness of the product or services such as brand name and price is one of the major roles of
advertising. The awareness of the product or services can be created by highlighting the unique features
of the brand. Nowadays, due to intense competition, awareness is extremely required.
 Persuasion
Through persuasive messages, the marketers try to provide reasons regarding the superiority of their
products as compared to competitors available in the market. Persuasion can be done through creative
advertising messages, product demonstration at trade fairs, offering free gifts, premium offers and
organizing contests.
 Reminder
If target customers already have a positive approach towards a firm’s product or service, then a
reminder objective may be necessary because the satisfied customers can be targets for competitors’
appeals.  They should keep on reminding them about their presence in the market. For example,
‘Raymond – the complete man’ campaign is designed to remind the customers.
 Brand Image
Advertising helps in building a good image of the brand in the minds of the target audience. There are
several factors, such as the character of the personality that endorses the brand, the content of the
advertising message, nature, and type of packaging and the type of programmes or events sponsored,
that can help to develop the brand image in the minds of the target audience.  
 Brand Loyalty
Advertising helps in developing brand loyalty, which results in repeat purchases and favourable
recommendations to others by existing customers. Sales promotion, effective personal selling, timely
and efficient direct marketing, and other techniques also help to develop brand loyalty.

1.10 Functions and Types of advertising agencies

ADVERTISING AGENCY

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“An ad agency is an independent company set up to render specialised services in advertising in
particular and in marketing in general.”
Advertising creates the ads, plans how, when and where it should be delivered and hands it over to the
client.
Advertising agencies are mostly not dependent on any organizations. These agencies take all the efforts
for selling the product of the clients.
They have a group of people expert in their particular fields, thus helping the companies or
organizations to reach their target customer in an easy and simple way.
The first Advertising Agency was William Taylor in 1786 followed by James ―JemWhite in 1800 in
London and Reynell& Son in 1812.

1.10.1 FUNCTIONS OF AD AGENCY

Functions of advertising agency

Advertising agency is an independent service-rendering organization. It delivers various services and

performs many functions for its clients, who are advertisers. It is mainly involved in activities
like planning, preparing and placing of ads in media. It also performs non-advertising functions for them.
It offers them advisory and creative services. It does so to make a profit.
Following image depicts the major functions of advertising agency.

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1. Attracting clients
Advertising agency needs clients (advertisers). Without them, it cannot survive.
Ad agency always tries to attract clients usually by giving ads in trade journals. It also seeks their
attention by offering them various services. It offers expert, cheap and quick services. It maintains good
relations with them. It tries to give them full satisfaction. It strives harder to attain their goodwill and
customer-loyalty.
2. Research function
Advertising agency gathers information related to the client's product.
It collects following information about a product under its research function:
 Features, quality, advantages and limitations of a product,
 Present and future market possibilities,
 Competition in the market,
 Situation in the market,
 Distribution methods,
 Buyers' preferences, so on.
Ad agency analyses (studies) all this collected information properly and draws conclusions for its
research. It helps in planning an advertising campaign, selecting proper media and creation function.
3. Advertising planning
Advertising agency plans the entire ad campaign of its client.
Advertising planning is a primary function of an ad agency. It is done when its research function is
completed. That is, after analyzing the client's product, its competitors, market conditions, etc. It is done
by experts who use their professional experience to make a result-oriented advertising-plan.
After making the advertising plan, it is shown to the client. If the client likes and approves it, then the
plan is executed (put into action).
4. Creative function
Advertising agency put the advertising-plan into action under its creative function.
Creation of ads is the most important function of an ad agency. Generally, it involves activities like:
 Copy writing,
 Drawing photographs,
 Making illustrations, layouts, an effective ad message, etc.
These jobs are done by experts like copy writers, artists, designers, etc. These people are highly skilled
and creative. They make an advertisement more appealing. Attractive ads help to increase the sales of
the product.
The ad agency must always use fresh ideas for creating ads. It must neither use old tactics nor copy the
ad-campaign of other products.
5. Media selection
Advertising agency helps an advertiser to select a proper media (ad platform) to promote his
advertisement effectively.
Media selection is a highly specialized function of an ad agency. It must select the most suitable media
for its client's ad. It must choose media, which has a potential to give best results for the lowest cost. It
must select more than one media for the ad. For example, an advertisement can be put on television,
the Internet, newspapers, magazines, etc.
After selecting the media, the ad agency must maintain goods contacts with the media.
6. Advertising budget
Advertising agency helps an advertiser to prepare his ad budget. It helps him to use his budget
economically and make the best use of it.

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Without a proper advertising budget, there is a risk of client's funds getting wasted or lost. If an
advertiser suffers a loss, he may not bring new projects. As a result, there is a possibility of losing a
potential client that can bring more business to an ad agency.
7. Coordination
Advertising agency brings a good coordination between the advertiser, itself, media and distributors.
This is a very important function. If coordination is proper, it will increase the sales of the product.
8. Sales promotion
Advertising agency performs sales promotion. It helps an advertiser to introduce sales promotion
measures for the dealers and consumers. This helps to increase the sales of the product.
9. Marketing research
Advertising agency helps its clients to solve their marketing problems. It does so by conducting a
marketing research for them.
10. Non-advertising functions
Advertising agency also performs many non-advertising functions:
 It fixes the prices of the product,
 It determines the discounts,
 It designs the product,
 It also designs its package, trademarks, labels, etc.
These non-advertising services help an advertiser to increase its sales.
11. Public relations
Advertising agency does the public relations (PR) work for its clients. It increases the goodwill between
its clients and other parties like consumers, employees, middlemen, shareholders, etc. It also maintains
good relations between the client and media owner.

1.10.2 TYPES OF ADVERTISING AGENCIES.

1. FULL SERVICE AGENCIES

Full service agency offers its clients a full range of marketing, communications and promotion services
including planning, creating the advertisement, performing research and selecting media. A full service
agency may also offer non advertising services such as strategic market planning, design of sales
promotions, sales training and trade show materials, package design and public relations. The full
service agency is made up of departments that provide the activities needed to perform the various
advertising functions and serve the client. The benefits of a full service agency include attracting and
holding the very best talent, providing numerous services which may require an interrelated approach,
and providing an objective examination of concepts from an outside perspective based on wide spread
experience.

2. IN-HOUSE AGENCY:
Even though most companies use full service advertising agencies, an organisation may decide to
establish its own operation for all services of an advertising agency within its own structure. The in-
house agency as its name implies is owned out right by and operated under the direct supervision of the
advertiser. It performs all the creative and media services provided by the traditional full service agency.
A major goal in adopting this approach is to reduce the total cost of the advertising.
Merits:
 It reduces the cost of advertising since the in-house agency is also entitled to the commission
from the media, which normally the outside agency would get & which the advertiser himself
does not get.
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  It ensures tighter control over the agency operations both in terms of cost as well as creativity.
Demerits:
 Top agency talents are less likely to be attracted into an in-house agency.
 An in-house agency may be influenced by built in political forces that might turn bias while an
outside agency is more objective in its analysis and evaluation and is less biased.
3. A CREATIVE BOUTIQUE:
It is an agency that provides only creative services. The client may seek outside creative talent because it
believes that an extra creative effort is required or because its own employees do not have sufficient
skill in this regard. Full service agency often subcontract work to creative boutiques when they are very
busy or want to avoid adding full time employees to their payroll. Creative boutiques are usually
founded by members of the creative departments of full service agencies who leave the firm and take
with them clients who want to retain their creative talent. These boutiques usually perform the creative
function on a free basis.
4. MEDIA BUYING SERVICE:
There are independent companies specialize in the buying of media, particularly radio and TV time.
Media buying is a niche service and these agencies are specialized in the analysis and purchase of
advertising time & space.
Both agencies and clients utilize their services, usually developing their own media strategies and using
the buying service to execute them. Because media buying services purchase such large amounts of time
and space, they receive large discounts and can save the small agency or client money or media
purchases. Media buying services are paid a fee or commission for their work.
6. THE LA CARTE AGENCY:
Some advertisers prefer to order a la carte rather than using all of an agency’s services. A la carte
services can be purchased from a full service agency or from an individual firm that specializes only in
creative work, media, production, research, or new product development.
The two requirements most frequently obtained by a la carte are creative and media services.
A boutique is typically a service agency used as a creative consultant, specialising in concepts, strategy
development, and execution. Some advertisers employ a boutique to revitalize a tired advertising
campaign or to provide services in specialised media and product categories.
A media buying service works with an advertiser to provide a media plan, offer counseling in the
development of the advertisers plan, or provide specialised knowledge of media and usage rates. Firms
that prepare their own advertising frequently find the complexities of media purchase require the
services of a professional.
A la carte services may provide the advertiser with faster response, more objectivity, and more direct
communication which may lead to better results. However, the responsibility for planning and managing
the advertising remains with the advertiser.
7. SPECIAL SERVICE AGENCY (GROUP):
Some agencies focus their efforts only in some selected areas and then become specialists in those
areas. There is great multiplicity of firms whose objective is to provide advertisers, advertising agencies
and the advertising media with a host of specialized services.
These firms collectively are called special service groups and they are by far the least known component
of the advertising industry. For example, if an agency is specialising in direct response advertising either
in media or direct mail, knowledge of their availability and function is vital if the structure of the
advertising business is to be fully understood.

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1.11 Structure and Process of advertising agencies

1.11.1 Organizational Structure of Advertising Agency

Advertising agency must have a suitable internal organizational structure to keep functioning properly

with a smooth workflow.
When an advertising agency decides to establish its organizational structure, it must ask itself important
questions like:
1. What is the suitability and requirement of a department?
2. How the span of control should be within an agency?
3. Is there any mechanism or provision to make communication and coordination more effective
within the organization? etc.
All advertising agencies don't have a same organizational structure. Their structure varies from one
another. It is so, since, all organizations are unique, and their objectives, requirements, functional areas
and specialized departments are not common.
Following diagram is a typical example of the organizational structure of advertising agency.
https://1.bp.blogspot.com/-ayU1ZH692sQ/UgepwF-F41I/AAAAAAAAHSs/Hhly2Y7tNmI/s1600/
organizational-structure-of-advertising-agency.png

In the above chart,

1. Board of Directors is a top administrative body of the XYZ advertising agency.
2. The President or General Manager is its head.
3. The Vice President of Marketing Services looks after its Media, Research and Sales Promotions.
4. The Vice-President of Management and Finance manages its Finance Department and Office
Management (Personal, Records, and Public Relations.)

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 5. The Vice-President of Creative Services takes care of its Copy Art, Production (TV and Radio,
Press, etc.) and Traffic.
6. The Vice-President of Accounting Services handles its Account Supervisors and Account
Executives.
With expansion and growth, the organizational structure of advertising agency becomes complicated.
Small Agencies usually have a simple structure compared to giant ones who have ample funds and
resources to carry out their large and growing operations in the field of advertising.

Departments of Advertising Agency

The different departments of advertising agency:

1.11.2 Process of advertising

“Mass demand has been created almost entirely through the development of Advertising”
Calvin Coolidge in the New York Public Library.
For the development of advertising and to get best results one need to follow the advertising process
step by step.
The following are the steps involved in the process of advertising:
1. Step 1 - Briefing: the advertiser needs to brief about the product or the service which has to be
advertised and doing the SWOT analysis of the company and the product.
2. Step 2 - Knowing the Objective: one should first know the objective or the purpose of
advertising. i.e. what message is to be delivered to the audience?
3. Step 3 - Research: this step involves finding out the market behavior, knowing the competitors,
what type of advertising they are using, what is the response of the consumers, availability of
the resources needed in the process, etc.

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 4. Step 4 - Target Audience: the next step is to identify the target consumers most likely to buy the
product. The target should be appropriately identified without any confusion. For e.g. if the
product is a health drink for growing kids, then the target customers will be the parents who are
going to buy it and not the kids who are going to drink it.
5. Step 5 - Media Selection: now that the target audience is identified, one should select an
appropriate media for advertising so that the customers who are to be informed about the
product and are willing to buy are successfully reached.
6. Step 6 - Setting the Budget: then the advertising budget has to be planned so that there is no
short of funds or excess of funds during the process of advertising and also there are no losses
to the company.
7. Step 7 - Designing and Creating the Ad: first the design that is the outline of ad on papers is
made by the copywriters of the agency, then the actual creation of ad is done with help of the
art directors and the creative personnel of the agency.
8. Step 8 - Perfection: then the created ad is re-examined and the ad is redefined to make it
perfect to enter the market.
9. Step 9 - Place and Time of Ad: the next step is to decide where and when the ad will be shown.
The place will be decided according to the target customers where the ad is most visible clearly
to them. The finalization of time on which the ad will be telecasted or shown on the selected
media will be done by the traffic department of the agency.
10. Step 10 - Execution: finally the advertise is released with perfect creation, perfect placement
and perfect timing in the market.
11. Step 11 - Performance: the last step is to judge the performance of the ad in terms of the
response from the customers, whether they are satisfied with the ad and the product, did the ad
reached all the targeted people, was the advertise capable enough to compete with the other
players, etc. Every point is studied properly and changes are made, if any.
If these steps are followed properly then there has to be a successful beginning for the product in the
market.

1.12 Agency Services and Agency-Client Interface

1.12.1 AGENCY SERVICES

(a) Research:
Even prior to the formulation of the plan, an agency must do some research. The scope of research has
expanded so much that, in recent years, independent specialised research organisations have been
created to meet the expanded needs of both marketing and advertising research.
(b) Planning:
The most important function in agency operation is the development of an advertising plan, usually
prepared in conjunction with the client company. The advertising plan viewed as part of the overall
marketing plan. An essential part of planning is budgeting and the agency usually provides alternative
budget proposals to help the client determine how much should be spent on advertising.
(c) Creative Services:
One of the earliest additions to the responsibilities of the advertising space sales person was the writing
of copy. Today copy writers frequently work in conjunction with artists in the preparation of print
advertising, and copy writers, art directors, and broadcast producers usually combine their efforts in
preparation of broadcast selling messages.
(d) Print and Broadcast Production:
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Print production people are responsible for converting and copy into printing plates used to produce
finished advertisements. Proofs of advertisements are submitted for approval to clients before final
printing plates are made. Print production workers must maintain contacts with printers, typographers,
type setters, and photoengravers.
In the early days of television, broadcast productions were prepared by the advertising agency; today,
shows are more frequently purchased from networks, broadcasting, stations or independent show
producers. However, agency men and women still do the creative work on both radio and television
commercials.
They prepare the story boards and choose (and even design) Props, costumes and scenery. The actual
mechanical production of the commercial may be done by an out-side producer under the supervision
of an agency TV producer.
(e) Media Selection:
One of the areas where the expertise of an advertising agency may be a necessity is media selection.
Media choice involves knowledge of each medium’s characteristics and its coverage, as well as an
understanding of the target market to be reached.
An agency must select what it considers to be the best medium, must contact the various media,
execute the contracts, and pay media bills. As an aid in the media selection process a number of
advertising agencies have applied computer techniques to the creation of media models.
(f) Account Management:
Since the advertising agency is an organisational unit external to the firm, some continuing and close
contact must be established to promote communication and understanding between the client and
agency. The advertising agency establishes a contact person to maintain this liaison. In the small agency
this function may be performed by the president; the account executive performs as liaison in a larger
agency, and, in some cases, there may be an account group consisting of several account executives
headed by an account supervisor. The contact person must know the functions and activities of both the
agency and client and must be able to interpret these satisfactorily to both organisations.
(g) Accounting:
Although accounting is of prime importance to all business, it has added significance to an agency. Since
the agency is responsible for payment to media, it becomes particularly important to keep accurate
accounts of billing, to check the appearance of advertisements, and to maintain records of payments.
(h) Other Services:
In order to provide a total marketing concept, agencies become more involved in promotional activities
that are not strictly advertising. The extent of services required by clients varies; manufacturers of
consumer goods tend to place greater emphasis than industrial goods manufacturers upon the range of
an agency’s service in the selection process.
Some agencies provide merchandising for their clients; that is they create sales promotional material,
aid in dealer co-operative advertising campaigns, execute point of purchase displays, and help develop
contests.
They may also offer expertise in public relations, usually on a fee basis and as an activity somewhat
separate from their advertising. Some larger agencies may go beyond promotion and provide such
services as sales forecasting, new product planning, and package development.

1.12.2 AGENCY CLIENT RELATIONSHIP

The relationship between a client and its fundraising agency can be a critical factor in determining the
success of the client's fundraising work. A close relationship in which everyone feels part of the same
team can not only help both parties to produce better fundraising materials and get better results, but it
can also make the whole process overdeveloping the appeals more efficient and enjoyable. The ultimate

25
aim of the team that is created by the client and agency working together is to raise as much money as
possible, so that the charity can pursue its social aims.
Each of the priorities below are important means towards this overall end:
1. Understanding- both parties make the effort to understand how the other works.
2. Trust- both parties trust each other and work to maintain that trust - including
3. Communicating well, meeting deadlines and agreeing fair pricing.
4. Flexibility- there is space in the relationship for both parties to suggest new ideas, Adjust
things and improve things.
5. Respect- both parties respect the views, competence and situation of the other, and
communicate in a respectful way.
6. Shared responsibility- in the best client/agency relationships, both parties will feel an equal
sense of responsibility and commitment to the work they are producing.

Client agency relationship in advertising

The client-agency relationship starts when a client appoints an advertising agency for making his ad. It
continues till the ad agency provides satisfactory services to him. Such a relation should always be
cordial. There should be a mutual trust, confidence and understanding between the two parties. It is so,
since, the primary objective of both sides is same, i.e. to make a successful advertising campaign.
Lack of mutual trust will be harmful to both parties. It is, therefore, necessary to maintain good relations
between the client and ad agency as follows:
1. Meaningful two-way communication is required to maintain a friendly client-agency
relationship.
2. Both parties should take special efforts to maintain a cordial relationship.
3. The approach of give-and-take is required to keep relations over a longer period.
Mentioned below are some significant guidelines (grouped under three categories) to maintain a cordial
client-agency relationship in advertising:

1. Suggestions for both parties (Client and Ad Agency).

2. Guidelines for the Client (Advertiser), and
3. Advice to the Advertising Agency.

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Suggestions for a client and advertising agency to maintain their relations:

1. There should be a mutual understanding between client and agency. Misunderstanding or

confusion, if any, between the two parties, should be resolved quickly through direct talks.
2. The agency should work sincerely and honestly to bring a success to the client's ad campaign.
3. Both parties should properly follow the terms and conditions of the contract.
4. Good communication must be there between client and agency. Hence, regular meetings
between them shall be arranged.
5. Both should take necessary efforts to maintain their relations friendly.

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Guidelines for the client to preserve relationship with advertising agency:

1. Treat the ad agency with courtesy at all times and never hurt its ego.
2. Provide all possible information about the product to be advertised and the organisation. A well-
informed ad agency will make better ads.
3. Don't unnecessarily bargain for the fees charged by the ad agency as this may affect the quality
of work.
4. Motivate the agency to do a good impactful work. Its charges such as media bills, fees and other
costs must be paid well in time. The client should not wait for the ad agency to remind him
about the payment dues.
5. Don't change the ad agency without a proper reason. If not satisfied, always first communicate
your expectations and then wait for necessary changes to reflect.

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 6. The client should approve the proposals submitted by the ad agency. He must avoid making
petty arguments and only highlight those crucial relevant matters that needs attention.
7. Give sufficient time to the agency to work on and develop an ad campaign. The client should not
pressurize it to work quickly. He should avoid giving deadlines.
8. Reduce disputes to a minimum.
9. Finalize in advance the charges for a particular ad campaign.

Advice to the advertising agency to maintain good relationship with client:

1. The advertising agency should do a smart and hard work to bring success to the client's ad
campaign.
2. It should make a good advertising plan and must implement it efficiently and effectively.
However, first it must get the approval from the client.

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 3. It is the duty of the account executive of the agency to keep his customer happy and satisfied.
4. It should not charge client unreasonably high rates.
5. It should not make ads for client's competitor.
6. It should get all the information from the market that will help to create better ads.
7. Discuss the ad fees with the client in advance to avoid disputes.
8. Disclose to the client the names of the team members (employees) that are working on his ad
campaign.
9. Inform the client about changes, if any, happening within the agency.
10. Never hurt client's ego. Agency should always provide timely services to him and try its best to
satisfy him.
So keeping a good client-agency relationship in advertising is crucial to the success of both parties.

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