Chapter 3

Slides 6-15 Economic impact of advertising.

Slides 16-27 Social impact of advertising.

Chapter 4

4-1 Identify the various groups in the advertising business and explain their
relationship with one another.

The advertising business comprises four main groups: advertisers (clients), agencies, suppliers,
and media. Advertisers and agencies are the two main groups in the industry.

Marketers (or advertisers) are the clients, the companies that sponsor advertising “who want to
promote” for themselves and their products. They initiate the advertising process. Clients pay
agencies, set marketing goals, and ultimately approve the creative work that goes out to the
public. Advertisers range in size from small independent businesses to huge multinational firms,
and in type from service organizations to industrial manufacturers to local charities and political
action committees. Honda, Macys, the corner deli, McDonald's, Coca-Cola, Nike, Apple, non-
profit organizations, government entities or the local shoe store these are all examples of
advertisers.

Advertising agencies help these companies plan, create, and prepare ad campaigns and
promotional materials for advertisers. They handle the entire process from strategy to execution.
A range of services might include: Market Research, Creative Development, Media Planning and
Buying, Campaign Management and Analysis. Work closely with advertisers to understand their
needs, develop effective campaigns, and manage their advertising budgets. Examples: Large
holding companies: WPP, Publicis Groupe, Omnicom, Dentsu International. Smaller, specialized
agencies: digital agencies, creative boutiques, media-focused agencies.

The two additional groups are suppliers and media. Suppliers assist advertisers and agencies in
preparing materials. Most agencies have copywriters and art directors on staff and use many
additional service providers. What are some types of suppliers that an agency might use?
Supplier includes the photographers, illustrators, printers, digital service bureaus, color film
separators, video production houses, Web developers, and others who assist both advertisers and
agencies in preparing advertising material. Work with advertising agencies on a project basis to
produce the elements needed for specific campaigns. Examples: Commercial photography
studios, printing companies, market research agencies.

Finally, the media sells time (on radio and TV) and space (in print, outdoor, or digital media) to
carry the advertiser’s message to the target audience.

What type of media sells time to advertisers? What type of media sells space? Media Selling
Time: Broadcast Media this category primarily includes Television and Radio. Media Selling
Space are Print Media this category includes Newspapers and Magazines. Outdoor Media this
category encompasses Billboards and Signage.

The channels through which advertisements reach the target audience. These include Traditional
Media: TV, radio, newspapers, magazines, billboards. As well Digital Media: Websites, social
media platforms, search engines, video platforms. Media companies sell advertising space or
time to agencies or directly to advertisers. They work with agencies to plan and place
advertisements effectively. Examples: Traditional: NBC, The New York Times, Clear Channel
Outdoor. Digital: Google, Meta (Facebook, Instagram), YouTube.

The advertising business is a collaborative process. An example of the how they work togather:

1. Client Needs: The advertiser identifies a need to promote a product or service.

2. Agency Selection: The client selects an advertising agency based on expertise and fit.
3. Strategy Development: The agency researches the market and target audience, then
develops an advertising strategy in collaboration with the client.
4. Creative Execution: The agency's creative team develops ad concepts, with feedback
from the client.
5. Supplier Involvement The agency might engage suppliers, such as photographers or
production studios for specialized elements of the campaign.
6. Media Placement: The agency's media planners select and buy ad space from media
outlets.
7. Campaign Launch: The ads go live across various channels.
8. Measurement and Optimization The agency tracks results and makes adjustments to
improve the campaign's performance.

4-3 Classify the types of advertising agencies.

Ad agencies may be local, regional, national, or international in scope. Agencies can be
classified by the range of services they offer and the types of business they handle. The two basic
types are full-service agencies and specialized service agencies, such as creative boutiques,
media-buying services, and interactive agencies.

Agencies can be classified in a variety of ways. In terms of reach, an advertising agency can be a
small, local shop that offers its expertise to local businesses or a large international operation
with offices around the world.

Classification by Geographic Scope

Every community of any size has reputable small ad agencies that offer expert assistance to local
advertisers. A competent local agency can help. Local Agencies: Focus on a specific city or
metropolitan area. They're well-suited for businesses targeting a localized audience.

Every major city has numerous agencies that can produce and place the quality of advertising
suitable for national campaigns. Regional and national agencies typically participate in a regional
trade group. Regional Agencies: Serve a larger geographical area, such as a specific state or a
group of states. National Agencies: Operate across an entire country and often work with major
brands with a nationwide reach.

The largest national agencies are also international agencies. That is, they have offices or
affiliates in major communication centers around the world and can help their clients market
internationally or globally as the case may be. International Agencies: Have offices and
operations in multiple countries, handling global advertising campaigns for multinational
corporations.

Classification by Service Scope

Today, full-service advertising agencies supply both advertising and non-advertising services for
clients. Advertising services include planning, creating, and producing ads; performing research;
and selecting media. While non-advertising services can include packaging, public relations, and
producing sales promotion materials and trade show exhibits. Full-Service Agencies: Offer a
complete range of advertising services. Full-service agencies come in two types: A general
consumer agency represents the widest variety of accounts and services companies that make
goods purchased mainly by consumers. General Consumer: Focus on advertising directly to the
end consumers of products or services. A business-to-business, or B2B, agency represents clients
who market products to other businesses. Business-to-Business (B2B): Specialize in creating
advertising targeted at other businesses (selling products or services that help other companies)

Specialized agencies began in the 1990s. Specialized Service Agencies: Focus on specific
aspects of the advertising process: These may include: creative boutiques that focus on artistic
talent and originality, Creative Boutiques: Emphasize the creation of innovative ad concepts,
design, and copywriting. Interactive agencies that focus on new media advertising, Interactive
Agencies: Focus on digital advertising, web design, social media marketing, and other online
strategies. Media buyers that manage and track performance of advertising placement in various
media channels. Media-Buying Agencies: Specialize in the research, planning, and purchasing
of advertising space or time across different media channels.