Organizing for Advertising

and Promotion:
The Role of Ad Agencies and Other
Marketing Communications
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
 Advertising Department 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 Centralization
+ Positive - Negative
Better
Better Less
Less goal
goal
communications
communications involvement
involvement

Fewer
Fewer
Fewer The
The
personnel
personnel Centralized
Centralized Longer
Longer
System
System response
response time
time
Continuity
Continuity
of
of staff
staff
Can’t
Can’t do
do
multiple
multiple product
product
More
More top
top lines
lines
management
management
involvement
involvement
 Decentralized Brand Management System
Corporate

Research Human
Production Finance Marketing and
resources
development

Sales Product Marketing

management services

Brand Brand
manager manager Advertising Marketing
department research
Ad agency Ad agency

Sales Package
promotion design

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
Misallocation
Misallocation of
of
Increased
Increased funds
funds
funds
funds
flexibility
flexibility

Lack
Lack of
of
Authority
Authority
 Pros & Cons of In-House Agencies

+ Positive - Negative

Cost
Cost Less
Less
savings
savings experience
experience

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

Better
Better Less
Less
coordination
coordination flexibility
flexibility
 Ad Agencies Have Skilled Specialists

Artists
Artists Writers
Writers Researchers
Researchers

Photographers
Photographers Media
Media Analysts
Analysts Other
Other Skills
Skills
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Crispin Porter+Bogusky
Found Creative Ways to Advertise the Mini
Methods of Agency Compensation

Commissions
Commissions
from
from media
media

Fee,
Fee, cost,
cost, and
Compensation
Compensation and
incentive-based
incentive-based
Methods
Methods systems
systems

Percentage
Percentage
charges
charges
 Why Agencies Lose Clients

Personnel
changes Changes
Poor in strategy
performance
Poor Declining
communications sales
Unrealistic
demands
Changes
in size Payment
conflicts
Personality
conflicts Policy
Conflict of
interests changes
 How Agencies Gain Clients

Referrals
Referrals Presentations
Presentations

Solicitations
Solicitations

Public
Public Relations
Relations Image,
Image, Reputation
Reputation
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