Organizing for Advertising and Promotion

The Role of Ad Agencies and Other Marketing Communications Organizations

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

Participants in the IMC Process
Advertiser (Client) Advertiser (Client) Advertising Agency Advertising Agency Media Organizations Media Organizations Marketing Marketing Communications Communications Specialist Specialist Organization Organization Collateral Services Collateral Services Direct Direct Response Response Agencies Agencies Public Public Relations Relations Firms Firms Sales Sales Promotion Promotion Agencies Agencies

Interactive Interactive Agencies Agencies

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

. McGraw-Hill/Irwin . Inc.Advertising Department Under Centralized System President President Production Production Finance Finance Marketing Marketing Research Research and and DevelopDevelopment ment Human Human Resources Resources Advertising Advertising Marketing Marketing Research Research Sales Sales Product Product Planning Planning © 2003 McGraw-Hill Companies.

Pros & Cons of Centralization + Positive Better Better Communications Communications .Negative Less Goal Less Goal Involvement Involvement Fewer Fewer Personnel Personnel The The Centralized Centralized System System Longer Longer Response Time Response Time Can’t Do Can’t Do Multiple Product Multiple Product Lines Lines Continuity Continuity Of Staff Of Staff © 2003 McGraw-Hill Companies.. McGraw-Hill/Irwin . Inc.

McGraw-Hill/Irwin Marketing Services Advertising Department Marketing Research Ad agency Package Design .Decentralized Brand Management System Corporate Production Finance Marketing Research and Development Human Resources Sales Product Management Brand Manager Brand Manager Ad agency Sales Promotion Merchandising © 2003 McGraw-Hill Companies.. Inc.

Negative Lack of Lack of Experience Experience in IMC in IMC Competition for Competition for Resources Resources Rapid Problem Rapid Problem Response Response Increased Increased Flexibility Flexibility Lack of Lack of Authority Authority © 2003 McGraw-Hill Companies. McGraw-Hill/Irwin . Inc.Pros & Cons of Decentralization + Positive Concentrated Concentrated Attention Attention The The Decentralized Decentralized System System ..

Negative Less Less Experience Experience More More Control Control The The In-house In-house Agency Agency Less Less Objectivity Objectivity Better Better Coordination Coordination Less Less Flexibility Flexibility © 2003 McGraw-Hill Companies.. McGraw-Hill/Irwin .Pros & Cons of In-House Agencies + Positive Cost Cost Savings Savings . Inc.

McGraw-Hill/Irwin + .. Inc.Most No Fear advertising is done by their in-house agency © 2003 McGraw-Hill Companies.

Ad Agencies Have Skilled Specialists Artists Artists Writers Writers Researchers Researchers Photographers Photographers Media Analysts Media Analysts © 2003 McGraw-Hill Companies.. McGraw-Hill/Irwin Other Skills Other Skills . Inc.

McGraw-Hill/Irwin Full Range of Full Range of Marketing Marketing Communication Communication and Promotion and Promotion Services Services Performing Performing research research Selecting media Selecting media Package design Package design Non-Advertising Non-Advertising Services Services Public relations Public relations and publicity and publicity ..Full-Services Agencies Planning Planning advertising advertising Creating Creating advertising advertising Producing Producing advertising advertising Strategic market Strategic market planning planning Sales promotion Sales promotion and training and training Trade show Trade show materials materials © 2003 McGraw-Hill Companies. Inc.

Typical Full-Service Agency Organization Board of Directors President VP Creative Services Writers VP Account Services Media VP Marketing Services Research VP Management and Finance TV Print Account Art Directors ProducitonProductionSupervision Traffic Traffic Account Executive Sales Office Promotion Management Personnel ccounting Finance A © 2003 McGraw-Hill Companies. Inc.. McGraw-Hill/Irwin .

. Copywriters. other specialists specialists .Services Provided by Agencies Agency Services Agency Services Account Account Service Service The link between The link between agency and client agency and client Managed by the Managed by the Account Executive Account Executive Marketing Marketing Services Services Research Research department may department may design and execute design and execute research programs research programs Media department Media department may analyze. Inc. artists. select may analyze. McGraw-Hill/Irwin Creative Creative Services Services Creation and Creation and execution of ads execution of ads Copywriters. select and contract media and contract media resources resources © 2003 McGraw-Hill Companies. other artists.

.The Role of Creative Boutiques Creative Creative Boutiques Boutiques Provide Only Creative Services Provide Only Creative Services Full-Service Agencies May Full-Service Agencies May Subcontract With Creative Subcontract With Creative Boutiques Boutiques Other Functions Provided by Other Functions Provided by the Internal Client Departments the Internal Client Departments © 2003 McGraw-Hill Companies. Inc. McGraw-Hill/Irwin .

. Inc. McGraw-Hill/Irwin + .Coca Cola’s in-house boutique created this popular spot © 2003 McGraw-Hill Companies.

Media Buying Can Be Specialized Media Media Buying Buying Services Services Specialize in Buying Media. McGraw-Hill/Irwin . Inc.. Specialize in Buying Media. Especially Broadcast Time Especially Broadcast Time Agencies and Clients Develop Agencies and Clients Develop Media Strategy Media Strategy Media Buying Organizations Media Buying Organizations Implement the Strategy and Implement the Strategy and Buy Time and Space Buy Time and Space © 2003 McGraw-Hill Companies.

Inc..Methods of Agency Compensation Commissions Commissions Method Method Cost-Plus Cost-Plus Agreements Agreements Compensation Compensation Methods Methods Percentage Percentage Charges Charges Fee Fee Arrangements Arrangements Incentive-Based Incentive-Based Payment Payment © 2003 McGraw-Hill Companies. McGraw-Hill/Irwin .

McGraw-Hill/Irwin .Young & Rubicam has handled Dr. Inc.. Pepper for over 30 years + © 2003 McGraw-Hill Companies.

Foote. Inc. Cone & Belding was the agency for Levi’s for 68 years *Click outside of the video screen to advance to the next slide © 2003 McGraw-Hill Companies. McGraw-Hill/Irwin ..

Why Agencies Lose Clients Personnel changes Poor performance Unrealistic demands Changes in strategy Declining sales Payment conflicts Policy changes Poor communications Changes in size Personality conflicts Conflict of interests © 2003 McGraw-Hill Companies. McGraw-Hill/Irwin . Inc..

McGraw-Hill/Irwin Image.. Reputation Image. Inc. Reputation .How Agencies Gain Clients Referrals Referrals Presentations Presentations Solicitations Solicitations Public Relations Public Relations © 2003 McGraw-Hill Companies.

Inc..Gateway Changed Its Advertising After Changing Agencies *Click outside of the video screen to advance to the next slide © 2003 McGraw-Hill Companies. McGraw-Hill/Irwin .

Inc.A Change in Strategy Led to a Change in Gateway’s Advertising *Click outside of the video screen to advance to the next slide © 2003 McGraw-Hill Companies. McGraw-Hill/Irwin ..

. McGraw-Hill/Irwin . Inc.Direct Response Agency Activities Data Base Data Base Management Management Direct Direct Mail Mail Direct Direct Response Response Agencies Agencies Media Services Media Services Creative Creative Research Research Production Production © 2003 McGraw-Hill Companies.

McGraw-Hill/Irwin .Activities performed by Sales Promotion Agencies Promotion Planning Promotion Planning Creative Work Creative Work Research Research Research Coordination With Coordination With Advertising Advertising Premium Design Premium Design Contest/Sweepstakes Contest/Sweepstakes Development Development Data Base Marketing Data Base Marketing © 2003 McGraw-Hill Companies. Inc..

.Functions performed by Public Relations Firms Strategy Development Damage Control Generating Publicity Program Planning Lobbying Public Affairs Image Portrayal © 2003 McGraw-Hill Companies. McGraw-Hill/Irwin . Inc.

. Inc.Functions performed by Interactive Agencies Web Web Banner Ads Banner Ads Web Sites Web Sites Interactive Interactive Media Creation Media Creation CD-ROMs CD-ROMs Kiosks Kiosks Audio Audio Digital Digital Content Content Animation Animation © 2003 McGraw-Hill Companies. McGraw-Hill/Irwin Video Video Special Effects Special Effects .

McGraw-Hill/Irwin .Marketing Research Companies Planning and Planning and Implementing Implementing Research Research Information Information Application Application Analysis and Analysis and Interpretation Interpretation Primary Data Primary Data Collection Collection Qualitative & Quantitative Qualitative & Quantitative Secondary Data Secondary Data Collection Collection © 2003 McGraw-Hill Companies.. Inc.