Organizing for Advertising

and Promotion:
The Role of Ad Agencies and Other Marketing
Communication Organizations
 Participants in the IMC Process

Advertiser
Advertiser (Client)
(Client)

Advertising
Advertising agency
agency

Media
Media organizations
organizations Direct-
Direct- Sales
Sales
response
response promotion
promotion
Marketing
Marketing agencies
agencies agencies
agencies
communications
communications
specialist
specialist
organizations
organizations Public
Public Interactive
Interactive
relations
relations agencies
agencies
Collateral
Collateral services
services firms
firms
 Organizing for Advertising and Promotion

• The way a company (the client)

organizes depends on
– Its size
– The number of products it markets
– The role of advertising and promotion in
the marketing mix
– The budget
– Its marketing organization structure
Advertising Dept. Under Centralized System

President
President

Research
Research
and
and Human
Human
Production
Production Finance
Finance Marketing
Marketing develop-
develop- resources
resources
ment
ment

Marketing
Marketing Product
Product
Advertising
Advertising Sales
Sales
research
research planning
planning
 Pros & Cons of a Centralized System

+ Positive - Negative
Better
Better Less
Less goal
goal
communications
communications involvement
involvement

Fewer
Fewer The
The
personnel
personnel Centralized
Centralized Longer
Longer
System
System response
response time
time
Continuity
Continuity
Impractical
Impractical for
for
multiple
multiple brands,
brands,
More
More top
top products,
products, divisions
divisions
management
management
involvement
involvement
 Decentralized Advertising System

Corporate

Production Finance Marketing R&D Human

Resources

Sales Product Marketing

Management services

Creative Advertising Marketing

Manager Dept Research

Ad agency
Sales promotion
Creative
Manager Package design

Ad agency Merchandising
 Pros & Cons of Decentralization

+ Positive - Negative

Ineffective
Ineffective
Concentrated
Concentrated decision
decision making
making
attention
attention

Rapid
Rapid problem
problem The
The Internal
Internal conflicts
conflicts
response
response Decentralized
Decentralized
System
System
Unequal
Unequal
distribution
distribution
Increased
Increased of
of funds
funds
flexibility
flexibility

Lack
Lack of
of
Authority
Authority
 Test Your Knowledge

A major reason why some companies choose to use an

in-house agency is to:
A) Maintain creative freshness
B) Reduce advertising and promotions costs
C) Better understand how advertising works
D) Win advertising awards that will enhance
the image of their brands
E) Do all of the above
 Pros & Cons of In-House Agencies

+ Positive - Negative

Cost
Cost Less
Less
savings
savings experience
experience

The
The
More
More Less
Less
control
control
In-house
In-house objectivity
objectivity
Agency
Agency

Better
Better Less
Less
coordination
coordination flexibility
flexibility
 The Ad Agency’s Role

• Reasons for using an ad agency

– Highly skilled specialists
– Specialization in a particular industry
– Objective viewpoint of the market
– Broad range of experience
 Ad Agencies Have Skilled Specialists

Artists
Artists Writers
Writers Researchers
Researchers

Photographers
Photographers Media
Media Analysts
Analysts Other
Other Skills
Skills
 Full-Service Agencies

Planning
Planning
advertising
advertising Full
Full range
range of
of Performing
Performing
marketing
marketing research
research
Creating
Creating communication
communication
advertising
advertising and
and promotion
promotion
services Selecting
Selecting media
media
Producing
Producing services
advertising
advertising

Strategic Interactive
Interactive
Strategic market
market
planning
planning capabilities
capabilities

Sales
Sales Nonadvertising
Nonadvertising Package
promotions Package design
design
promotions services
services
Direct Public
Public relations
relations
Direct marketing
marketing
and
and publicity
publicity
 Typical Full-Service Agency Organization

Board of
directors

COO

Creative Director
Account Media
CFO
Director Head

Writers Print
Art directors production Sales
Media
Promotion
Account
TV supervision
production
Research Office
management Finance

Traffic Account
Accounting
Executive

Personnel
 Services Provided by Agencies

Agency
Agency Services
Services

Account
Account Marketing
Marketing Creative
Creative Mgmt
Mgmt &&
Services
Services Services
Services Services
Services Finance
Finance

The
The link
link Research
Research Creation,
Creation, Accounting
Accounting
between
between department
department execution
execution ofof
agency Finance
Finance
agency andand May
ads
ads
client
client May include
include Human
account
account Copywriter
Copywriter Human
Managed planners artists, resources
resources
Managed planners artists, other
other
by
by the
the specialists
specialists New
New
account Media
Media dept.
dept.
account obtains business
business
executive
executive obtains generation
media
media generation
space,
space, time
time
 The Role of Creative Boutiques

Creative
Creative Provide
Provide only
only creative
creative services
services
Boutiques
Boutiques

Full-service
Full-service agencies
agencies may
may
subcontract
subcontract with
with creative
creative
boutiques
boutiques

Ability
Ability to
to turn
turn out
out inventive
inventive
creative
creative work
work quickly
quickly
 Media Buying Can be Specialized

Media
Media Specialize
Specialize in
in buying
buying media,
media,
Specialist
Specialist especially
especially broadcast
broadcast time
time
Companies
Companies

Agencies
Agencies and
and clients
clients develop
develop
media
media strategy
strategy

Media
Media buying
buying organizations
organizations
implement
implement the
the strategy
strategy and
and
buy
buy time
time and
and space
space
 Why Agencies Lose Clients

Poor Declining Personnel

performance sales changes

Changes
Poor Payment
in size of client
communications conflicts
or agency

Unrealistic Conflicts of
Policy Changes
Client demands interest

Change in
Personality Policy Changes client’s strategy
conflicts
 How Agencies Gain Clients

Referrals
Referrals Presentations
Presentations

Solicitations
Solicitations

Public
Public Relations
Relations Image,
Image, Reputation
Reputation