Chapter 3:

THE BUSINESS OF
ADVERTISING

Phạm Thị Thanh Thanh

Trần Khánh Lâm
Nguyễn Mai Hồng
 LEARNING OBJECTIVES

1. The various groups in the advertising business and their relationships.

2. Discuss the differences between local, national, and transnational advertisers.
3. How advertises organize themselves to manage their advertising both here and
abroad.
4. Define the main types of advertising agencies.
5. Describe the range of tasks people perform in an agency and an in-house
advertising department.
6. Relate how agencies get new clients and how they make money.
1. The various
groups in the THE
advertising ADVERTISING
business and their
relationships.
INDUSTRY
advertising business grous

Advertisers ( Clients) Advertising agencies Supplier Media

Most people in advertising are employed by advertisers rather than by agencies.

In addition, many other people work for the suppliers and the media.

The fact is, advertising is a very broad field that employs a wide variety of people.
THE DIFFERENCES
BETWEEN LOCAL,
NATIONAL, AND
TRANSNATIONAL
ADVERTISERS
sLocal advertisers

Dealer or local franchisees of Stores that sell a variety of Specialty businesses and Governmental and nonprofit
national company branded merchandise services organizations

A small, local business may have only 1 person in charge of advertising.

They are called the advertising manager, who performs all the administrative, lanning, budgeting and
coordinating functions.
3 Types of local advertising

institutional
product advertising classified advertising
advertising
 National and transnational advertiser
Media and entertainment Electronics manufacturer
How National and Local Advertising differ
National Local

Focus Brand Location

Market share Volume

Strategies Tactics

Markets Customers

Time Long-term campaign short-term ads

Resources 5 - 10 millions of dollar or Less than 1 million of dollar

more

The army of Specialist Small staff or 1 person

HOW
ADVERTISERS
ORGANIZE
THEMSELVES TO
MANAGE THEIR
ADVERTISING
Centralized Organization:

A company will have Centralized Department which control

everything, and send the report to president.
They may be organized in any of five ways:
1. By product or brand
2. By subfunction of Advertising
3. By end user
4. By medium
5. By geography
 Decentralized Organization:

The company sets up seperate ad department for different

divisions, subsidiaries, regions, brands, or other categories that
suite the company’s needs.
her categories that suite the company’s needs.
Transnational Advertisers
 Media Around The World

International Media: https://www.youtube.com/watch?v=4k8Jbimm_TI

Foreign Media: https://www.youtube.com/watch?v=pcpzAZYqlCM

International Media Foreign Media

International media serve
several countries without
changing the content-have
been limited to newspapers and
magazine
The local media of each
country- for large campaigns
targeted to consumers or
business within a single country
DEFINE THE
MAIN TYPES
OF
ADVERTISING
AGENCIES
 Types of Agencies

● Geographic Scope
● Range of Services: General consumer agencies
and B2B Agencies
● Specialized Service Agencies: Creative boutique,
Media-buying services, and Interactive Agencies
THE RANGE
OF TASKS
PEOPLE
PERFORM IN
AN AD
AGENCY
THE RANGE OF TASKS PEOPLE PERFORM IN AN AD AGENCY

requests.
Account Management: Account executives (AEs) :

Manages AEs. Analysis and provides AEs are responsible for contacting and
reviews the report from them. receiving customer.
THE RANGE OF TASKS PEOPLE PERFORM IN AN AD AGENCY

Account planning :
● Study consumer needs
● Work with creative teams to develop and operate advertising
campaigns.
● Convey ideas to client.
● Convince client.
THE RANGE OF TASKS PEOPLE PERFORM IN AN AD AGENCY

The strategic identification and selection of media vehicles for a client’s advertising
messages.
THE RANGE OF TASKS PEOPLE PERFORM IN AN AD AGENCY

Creative Director

Creative team
Copywriters Art directors
THE RANGE OF TASKS PEOPLE PERFORM IN AN AD AGENCY

ADDITIONAL AGENCY
SERVICES ADMINISTRATION
HOW AGENCY
MAKE MONEY AN
AND GET NEW IN-HOUSE
CLIENTS ADVERTISING
DEPARTMENT
HOW AGENCY MAKE MONEY

MEDIA COMMISSION MARKUPS

FEES
ANTHE IN-HOUSE AGENCY

The marketing department owned by a company is the in-house agency.

HOW AGENCY GET CLIENTS

REFERRALS NETWORKING &

COMMUNITY RELATIONS

SOLICITING &
ADVERTISING FOR
NEW BUSINESS