ADVERTISING

AGENCIES
MODULE 1
AGENC Y MA NAGEMENT
T Y B A M M C A DV E R T I S I N G
WHAT IS AN ADVERTISING AGENCY?
• A kind of service organization that is committed to planning,
creating, and executing advertising for its clients.
• Independent organisations that are not influenced by any of
advertisers, suppliers, media and clientele
• According to David Ogilvy, “Advertising justifies its existence when
used in the public interest—it is much too powerful a tool to use
solely for commercial purposes.”
AD AGENCIES ARE HIRED FOR:
• Producing creative content for print, radio, television and digital
advertisements.
• Strategise, plan and implement the placement of these
advertisements
• Provide guidance and counsel on overall marketing strategy for
their clients.
FEATURES OF AN AD AGENCY ARE:
• Independent organization
• Comprises of creative people
• Assist the clients in developing marketing plans
• Prepares ads for clients
• Designs and executes various promotional tools for clients
• Helps in acquiring advertising space and time for the clients
• Helps in creating demand for the products and the services of the
clients
• Helps in developing PR for the organization.
 Attracting
Clients
Public Research
Relations Function

Non-
Advertising
Advertising
Planning
Function
Functions/Roles
of an Ad
Marketing Creative
Research Agency Function

Sales Media
Promotion Selection

Co- Advertising
ordination budget
IMPORTANCE OF AD AGENCIES
• Providing creative promotional ideas
• Advisors to the clients
• Help in selecting the right media for the clients’ products and design suitable
ads accordingly
• Conduct marketing research and surveys for the client.
• Better info on demographics across a broader region of the country or
internationally.
• Helps clients in PR, marketing and sales promotion activities
• Cost-effective and time saving
• Negotiate and book ad space and time for clients
• Absorb a wide range of administrative and service-oriented expenses.
• Able to generate more profilic results as compared to the company itself.
• Constantly consult the clients throughout the campaign, to ensure satisfaction.
 Contact
Dept
Office Media
Management Dept

Public Copy
Relations Organisation
Dept
Dept Structure of
Advertising
Agencies
Accounting Art
and Finance
Dept Dept

Research Production
Dept Dept
 Types of Ad Agencies
Specialised
In-house Full service
Service
Agency Agencies
Agencies
General Media Direct Sales Public
B2B Creative Interactive
Consumer Buying Response Promotion Relation
Agencies Boutique Agencies
Agencies Agencies Firms
Agencies Services
 CLIENT
SERVICING MODULE 2
AGENCY MANAGEMENT
T Y B A M M C A DV E RT I S I N G
CLIENT-AGENCY RELATIONSHIP
• The client-agency relationship begins with the client appointing an
agency for making his ads and continues till the latter provides
satisfactory services to him.
• The client-agency relationship should be cordial.
• The goal of both parties is same; to make a successful ad campaign
• No lack of understanding between both the parties.
• Lack of mutual trust can be harmful for both parties.
 Product

Price People

Services
Marketing Physical
Place
Mix evidence

Promotion Process
THE GAP MODEL OF SERVICE QUALITY
• Also known as ‘5 gaps model’.
• It is an important customer satisfaction framework.
• A Parasuraman and VA Zeithan identified the five major gaps faced
by organisations seeking to meet customer’s expectations of their
experience in their research ‘A conceptual model of research and
its implications for future research’, published in ‘The Journal of
Marketing’ in 1985.
• The gaps they addressed in the model are: The Customer gap,
Knowledge Gap, Policy Gap, Delivery Gap, Communication Gap.
STAGES IN AGENCY-CLIENT
RELATIONSHIP
• Stage I: The Pre-relationship Stage

• Stage II: The Development Stage

• Stage III: The Maintenance Stage

• Stage IV: The Termination Stage

Pre-relationship Development Maintenance Termination

The Agency-Client Life Curve

HOW DO AGENCIES GAIN MORE
CLIENTS?
• Referrals
• Solicitations
• Presentations
• Public Relations
• Image and Reputation
WHY AGENCIES LOSE CLIENTS?
• Poor Performance or Service
• Poor Communication
• Unrealistic demands by the client
• Personality conflicts
• Personnel Changes
• Changes in Size of the client /agency
• Conflicts of interest
• Changes in client’s marketing strategy
• Declining Sales
• Conflicting Compensation Philosophies
• Changes in Policies
HOW TO CHOOSE AN AD AGENCY?
• Agency experience
• Agency size and location
• Product conflicts
• Financial position of an agency
• Special skills of an agency
• Review the agencies’ creative work
• Media contacts possessed by the agency
• Current clients
• Process of Payments
• Agency Ranking
ROLE OF ADVERTISING ACCOUNT EXECUTIVE
• Identifying the client’s advertising requirements
• Devising an ad campaign that meets the client’s briefs and budget
• Presenting campaign ideas and budget to the client
• Briefing media, creative and research staff and helping them in formulating the
strategies
• Point of contact for client and ad agency
• Ensures effective communication
• Negotiating details with clients and agency staff about the campaigns
• Presenting creative work to client for approval or modification
• Handling budgets and invoicing clients
• Writing client reports
• Monitoring the campaigns, undertaking admin tasks, arranging and attending
meetings and pitching for new business for the agency.
ACCOUNT
PL ANNING
MODULE 3
AGENCY MANAGEMENT
T Y B A M M C A DV E RT I S I N G
ROLE OF ACCOUNT PLANNING IN
ADVERTISING
• It values information

• Brand differentiation

• Media and marketing strategies

• Thought leaders of consumer insights

• Force to reckon with

ROLE OF AN ACCOUNT PLANNER
• Establish the clients’ aims and objectives
• Developing ideas and finding out the business problem
• Analysing and interpreting data
• Commissioning external research
• Preparing creative brief
• Updating self with cultural/social trends
• Making presentations for clients and agency staff
• Monitoring success of the campaign, suggesting changes wherever
necessary
• Analysing the results
KEY SKILLS FOR AN ACCOUNT
PLANNER
• Good interpersonal skills
• Team working abilities
• Communication skills
• Commercial awareness
• Creativity
• Ability to cope with pressure
• Effective analytical and organizational abilities
ACCOUNT PLANNING PROCESS
Defining the Deciding Media
Determining
Product or and Creative
the budget
service Strategy

Understanding Creating Ads,

Developing the
the Target Pre-testing and
Marketing Plan
Audience Releasing Ads

Setting Evaluating the

Market
Advertising final result or
Research
Objectives Post test
ADVERTISING
CAMPAIGN
MANAGEMENT MODULE 4
AG ENC Y M ANAG EM ENT
T Y B A M M C A DV E RT I S I N G
MEANS-END CHAINING

Functional Psychological
Attribute Value
Consequences Consequence
THE METHOD OF LADDERING
• A research technique that has been developed to identify
between attributes, consequences and values
• It is termed as ‘laddering’ because it leads to the construction
of a hierarchy or a ladder between a brand’s attributes or
consequences (means) and the consumer values (end).
• Method involves in-depth, one-on-one interviews with
consumers.
Probing is accomplished with questions such as following:
• Why is that (attribute) important to you?
• How does that help you?
• What do you get from that?
• Why do you want from that?
• What happens to you as a result?
DIGITAL ADVERTISING FORMATS
• Websites

• Display or Banner ads

• Pop-ups

• Interstitials

• Push technologies

• Superstitials

• Email Advertising
OBJECTIVES OF DIGITAL
ADVERTISING
• Create Awareness

• Generate Interest

• Disseminate Information

• Create an Image
PROS AND CONS OF DIGITAL MARKETING
A DVA N TAG E S D I S A DVA N TAG E S

• Target marketing • Measurement problems

• Message tailoring • Slow
• Interactive capabilities • Clutter
• Information access • Potential for Deception
• Sales potential • Privacy
• Creativity • Limited Production Quality
• Exposure • Poor reach
• Speed • Irritation
• Complement to IMC
AD FILM MAKING
T Y B A M M C A DV E RT I S I N G
MODULE 5
PLANNING THE COMMERCIAL

• Script is made

• Storyboard is drawn

• Moodboard is set based on the approximation of how an ad will look

TVC PRODUCTION PROCESS

Pre-Production Production Post-Production

• Selecting a director • Location/Set shoots • Editing
• Choosing a Production • Night Weekend shoots • Processing
company
• Bidding • Talent Arrangement • Recording
• Cost elimination and timing • Audio/video mixing
• Production timetable • Opticals
• Set construction • Duplicating
• Agency and client approvals
• Releasing/ Shipping
• Casting
• Wardrobes
• Pre-production meeting
MARKETING PL AN
OF CLIENT
T Y B A M M C A DV E RT I S I N G
MODULE 6
THE MARKETING BRIEF
A marketing brief is used to lay the
framework and foundation of the
marketing initiative or campaigns. Background
It serves the following purposes:
Budget Objectives

• To explain and communicate the

purpose of the marketing
initiative Tracking Components Target

• To set the numerical and

and Goals of a Market

measurements for success in the Marketing

campaign. Brief
Timeline Execution
• To set the tone of the message considerations Plan
and identify the targeted
segments. Marketing
Mandatories
Deliverable
• To identify and set the goals of
the marketing initiatives.
MARKETING AUDIT
• Comprehensive, systematic analysis and evaluation and the interpretation of the business
marketing environment.

• According to Abe Schuchman, “it is a systematic, critical and impartial review and appraisal of
the total marketing operation; of the basic objectives and policies and the assumptions which
underlie them as well as the methods, procedures, personnel and organization employed to
implement the policies and the achieve the objectives.

• Marketing Audit evaluates in three key areas:

o External Marketing Environment
o Internal Marketing Environement
o Evaluation of current marketing strategy
CHARACTERISTICS OF A MARKETING
AUDIT
• Comprehensive study of all marketing activities
• Systematic process
• Periodic Activity
• Conducted by an outsider
• Critical evaluation of the marketing activities
• Finds out the marketing opportunities and weakeness of company
• Preventative and curative marketing medicine.
 Macro-
Environment
Audit
Marketing Task
Function Environment
Audit Audit

Components
of the
Marketing
Productivity
Marketing Marketing
Strategy
Audit Audit Audit

Marketing
Marketing
Organisation
System Audit
Audit
METHODS OF CONDUCTING AN AUDIT

• Outside Auditor

• Task force

• Self Audit

• Audit from above (Director)

MARKETING OBJECTIVES

• Increase sales

• Improve Product Awareness

• Establish yourself in the industry

• Brand Management
 STP (SEGMENTATION, TARGETING,
POSITIONING)
Market
• Identify bases for Targeting • Develop detailed
segmentation product positioning for
• Determine important • Evaluate potential and selected segments
characteristics of each commercial • Develop a marketing
market segment. attractiveness mix for each selected
• Select one or more segment.
segments
Marketing Product
Segmentation Positioning
COMPONENTS OF A MARKETING PLAN
Marketing Research and Analysis

Marketing and Financial Goals

Marketing Mix

Marketing Budget
Monitoring and Evaluating
Marketing Response

Contingency plan

Marketing Plan Checklist

EXECUTING THE PLAN
• Create quantifiable goals for your campaign

• Brainstorm a variety of ways to execute your campaign

• Know who your target audience is

• Boil down your advertising message to a few relevant points

• Measure your returns during the campaigns.

 EVALUATING THE PLAN
• Advertising is of no use if the defined objectives of communications are not achieved.
• Therefore, it is necessary to evaluate the effectiveness of advertisement at different level, starting
from creation ad-copy to running of ad on media and also after execution of ad to know to what
extend the objectives are achieved.

Types of tests applied on advertisement evaluation:

• Pre-testing

• Concurrent testing

• Post-testing
PRE-TESTING
CONCURRENT TESTING
POST TESTING
THE RESPONSE
PROCESS
T Y B A M M C A DV E RT I S I N G
MODULE 7
TRADITIONAL RESPONSE HIERARCHY
MODEL- A.I.D.A.
Attention

Interest

Desire

Action
SALES ORIENTED OBJECTIVES
PROBLEMS WITH SALES OBJECTIVES

• Combine effect of many variables

• Carryover Effects

• Little Input for planning

WHERE SALES OBJECTIVES ARE
APPROPRIATE
• Direct Promotion Efforts

• Direct Response Advertising

• Retail Advertising

• When Advertising dominates in a marketing programme

• Advertising and promotional programmes are evaluated in terms of sales

COMMUNICATION OBJECTIVES
• To build primary demand

• To create brand awareness

• To provide relevant information

• To influence attitudes and feelings

• To create desires

• To create preferences

• To facilitate purchase and trail

• To create loyal customers

DAGMAR: AN APPROACH TO SETTING
OBJECTIVES
• Define Advertising Goals for Measuring Advertising Results
• Advertising goal involves a communications task that is specific and measurable.
Russell Colley proposed that the task be based on a hierarchical model of the communications
process with four stages:
• Awareness
• Comprehension
• Conviction
• Action
DAGMAR
This model also defines what constitutes a good objective.

• Concrete, measurable tasks

• Target Audience

• Benchmark and Degree of Change Sought

• Specified Time Period

CRITICISM OF DAGMAR
• Problems with the response hierarchy

• Sales objectives

• Practicality and cost

• Inhibition of creativity
SETTING UP AN
AGENCY
T Y B A M M C A DV E RT I S I N G
MODULE 8
STAGES OF SETTING UP AN AGENCY
Select the type of
Arrange with a
Advertising Start Marketing
suppler
Agency

Set uo your office

Write a Business
and buy needed Contact Prospect
Plan
equipments

Register and
Acquire a Start-up Network with
obtain the
Capital other Ad Agencies
necessary licences
BUSINESS PLAN FOR AN AD AGENCY

An inclusive business plan should entail the following:

• An executive abstract
• Startup price that the firm expects for the business
• Samples of products and services the agency will provide
• Market assessments for 5-7 fiscal years of your business entailing promotion and other
strategies
• Administrative synopsis
• The strategic plan for your business
FORMAT OF A BUSINESS PLAN
Executive
Summary
Company
Appendix
Review

Business Products
Future
and
Strategies Plan services

Managerial Industry
Plan Assessment
Marketing
plan
 AGENCY
COMPENSATION
T Y B A M M C A DV E RT I S I N G
MODULE 9
VARIOUS METHODS OF AGENCY
REMUNERATION
• Commission System

• Fee, Cost and Incentive-Based System

• Percentage Charges System

COMMISSION SYSTEM
• Traditional system of compensating agencies

• Simple method of determining payments

• The agency receives a specified commission from the media on any advertising time and space
it purchases for its client.

• Agencies are usually known to get 15% percent from the total amount.
COMMISSION SYSTEM
MERITS
• Easy to administer.
• Keeps emphasis on non-price factor.
• Services are proportional to the size of
the commission.
• Flexible system as agencies often other
services at no extra charges.
DEMERITS
• 15% commission for all services offered
and performed by agencies.
• It encourages agencies to recommend
high media expenditures to increase their
commission level.
• Criticised for encouraging agencies to
ignore cost accounting systems to justify
the expenses attributable to work on a
particular account.
• It tempts agencies to avoid non-
commissionable media unless requested
by the client.
• It ties agency compensation to media
costs.
FEE, COST AND INCENTIVE-BASED
SYSTEM
• Fee arrangement

• Cost-Plus Agreement

• Incentive-based Compensation
PERCENTAGE CHARGES SYSTEM

• Outsourced services are charged as per markup of percentage charges

• Markups usually range from 17.65 to 20 percent and added to the client’s overall bill.

• Since service suppliers of these services do not allow agency a compensation, this system
covers administrative costs while allowing a reasonable profit for the agency’s efforts.
GROWING THE
AGENCY
T Y B A M M C A DV E RT I S I N G
MODULE 10
THE PITCH
• A creative pitch describes the proposals of an advertising agency to promote a product or
service.

• It states the objectives for the campaign and describes how the campaign will deliver intended
results.

Pitches can happen through:

• Proactive Pitching
• Reactive Pitching

• Speculative Pitch is a presentation that examines the clients’ marketing situation and agency
proposes a tentative communications campaigns
WHY DO PEOPLE HESITATE TO ASK A
FREE IDEA?
• Professionalism

• Creativity and talent

• It’s not so ‘free’

• Intellectual property
THE PITCH PROCESS
Identify the The agency’s Pitch
client principals select
the campaign to Presentation
be pitched meeting

Request for The creative The client

proposal department chooses an
creates campaign agency

The client The agency’s The Agency

selects agencies principals will works on new
to brief brief the teams campaign
OTHER MEANS TO GET CLIENTS

• References

• Image and Reputation

• Public Relations

• Solicitations
 SALES
PROMOTION
MANAGEMENT
T Y B A M M C A DV E RT I S I N G
MODULE 11
SALES PROMOTION MANAGEMENT

• Promotion: Any incentive used by manufacturer to induce trade or consumers to buy a brand
and to encourage the sales force to aggressively sell it.

• Sales Promotion: A direct inducement that offers an extra value or incentive for the product to
the sales force, distributors or the ultimate consumers.

• Sales promotion is broken is broken into 2 major categories: Consumer-oriented sales

promotion and Trade-oriented sales promotion
SCOPE AND ROLE OF SALES
PROMOTION
• It provides extra incentive

• It provides an inducement to marketing intermediaries

• Acceleration tool designed to speed up the selling process

• Activities can be targeted to different parties in the marketing channel.

REASONS FOR INCREASE IN SALES
PROMOTION
• The Growing Power Of Retailers
• Declining Brand Loyalty
• Increased Promotional Sensitivity
• Brand Proliferation
• Fragmentation Of Consumer Market
• Short-term Focus
• Increased Accountability
• Competition
 THE PSYCHOLOGICAL THEORIES
BEHIND SALES PROMOTION
• It proposes that the consumers carry with them an adaptation level
Adaptation Level Theory price or internal reference for a given product

• It examines how external reference prices influence consumers

Assimilation Contrast Theory internal reference price and subsequent promotion evaluations.

• It describes how consumers explain the cause of events that led to

Attribution Theory them making the purchase.

• It states that the total utility derived from the purchase comprised of
Transaction Utility Theory acquisition utility and transaction utility.

• It proposes that the people perceive outcomes of a choice as

Prospect Theory perceived ‘loss’ or ‘gain’ relative to a subjective reference point.

• It states that a consumer’s intention to buy a brans may be based on

Attitude Theory positive or negative attitudes towards a promotion.
CONSUMER FRANCHISE-BUILDING VS
NON-FRANCHISE BUILDING PROMOTION
• Consumer franchise building (CFB) promotions are those sales promotional activities
that communicate distinctive brand attributes and contribute to the development and
reinforcement of brand identity.

• Non-Franchise building (Non-FB) promotions are designed to accelerate the purchase

decision process and generate an immediate increase in sales.
CONSUMER-ORIENTED SALES
PROMOTION
• Targeted to the ultimate user of the product or service.

• Basic goal is to induce purchase of the brand.

• Objectives include:
o Obtaining Trial and Purchase
o Increasing consumption of an established brand
o Defending current customers
o Targeting a specific market segment
o Enhancing Integrated Marketing Communication & Building Brand Equity
TECHNIQUES OF CONSUMER-
ORIENTED SALES PROMOTION
Sampling
Event
Marketing
Couponing

Frequency
Consumer-
programs Oriented Premium

Sales
Price-off Promotion Contests &
deals Sweepstakes

Bonus Refund &

Packs Rebates
TRADE-ORIENTED SALES
PROMOTIONS
• Targeted towards marketing intermediaries such as wholesalers, distributors and retailers.

• Objectives include:
o Obtaining Distribution for New Products
o Maintaining trade support for established brands
o Encouraging retailers to display established brands
o Building retail inventories
TYPES OF TRADE-ORIENTED
PROMOTION
Contests
&
Incentives

Cooperative Trade
Advertising
Trade- Allowance

Oriented
Sales
Trade Promotion Display &
Point of
Shows purchase
material
Self-
training
program