ADVERTISEMENT

&
PROMOTION

Lecture # 3
By Noman Ahsan
 Advertiser and the Advertising Agency
Interface
Learning Objectives After reading this lesson,
• you should be able to:
➢➢ Understand the scope and purpose of advertising agency
➢➢ Examine different types of advertising agency
➢➢ understand the process of selecting advertising agency
➢➢ appreciate the advantages of using advertising agency
Advertising Industry
Advertising Industry
The advertising industry consists of three principal groups:
• (a) Sponsors;
• (b) Media; and
• (c) Advertising agencies or advertising departments.
• Advertising agencies are of two basic types, viz., Independent; and House.
• INDEPENDENT AGENCY is a business that is free to compete for and select its
clients. A house agency is owned by its major client.
• HOUSE AGENCY is not completely free to serve other clients. The advertising
department an integral part of the organization it serves.
Advertising Industry
The advertising agency provides for the client a minimum of:
• (i) Media information, such as the availability of time and space
• (ii) Creative skills, such as “campaign planning” and “appeal planning” and
• (iii) Research capabilities, such as providing brand preference data.
What is an Advertising Agency?
• An advertising agency is an independent organization set up to render
specialized services in advertising in particular and in marketing in general.
• Advertising agencies started as space brokers for the handling of the
advertisements placed in newspapers.
• Over the years, the function of the agencies has changed. Their main job today
is not to aid media but to serve advertisers.
Functions of an Advertising Agency
• The broad functions of an advertising agency are planning, preparing, and placing
advertisements.
• Planning begins with the advertiser, also known as client in advertising parlance.
• The broad objectives of the advertising campaign are decided after talks with the
client team during which the agency tries to find out about the various characteristics
of the product and its strengths and weaknesses in relation to competitive brands.
• After gathering insight about the brand, the agency is expected to be objective in its
recommendation.
• Agencies are expected to verify the insights gathered from the client to be certain
about various aspects of the product and related issues.
Purpose of Advertising Agency
• Advertise and counsel on marketing strategy.
• Advice and counsel on advertising and media strategy and tactics
• Prepare and develop print, outdoor and electronic advertisements.
• Carry out collateral design of various items such as display material, PoP
(point of purchase) material and other promotional material.
• Help and counsel on sales promotion and other communication task
Types of Advertising Agencies
• Full-Service Agencies A full service agency provides whole range of services
to clients, both advertising and non-advertising.
• A La Carte Agencies An a la carte agency is such type of agency where one
can order according to their choice, can be had from a full service agency or
small special outfits.
• House Agencies A house agency is an advertising agency established by a
company to look after its advertising requirements.
Working with Advertising
• Some organization does not employ advertising agencies because they may be eligible
for the media discount.
• Others feel that they can accomplish the advertising objectives more effectively than
the agencies themselves. These marketers often employ their own advertising
specialists.
• Various organizations use captive agencies that work primarily or solely for the
organization.
• Those organizations which do employ agencies are well-advised to establish a strong
working relationship with them.
• It is especially important that the marketer fully inform the agency personnel of his
marketing strategy and advertising objectives.
Advantage of Using Agencies
1. The marketer gains a number of benefits5.
by employing agencies. An agency
generally has an invaluable experience in
dealing with various advertising and
marketing issues.
2. The lessons which agency learned in6.
working with other clients are useful
inputs for the marketer.
3. An agency may employ specialists in the
various areas of preparation and
implementation of advertising plans and
strategies. 7.
4. The personnel are not members of the
marketer’s management team. They
bring objective and unbiased viewpoints
to the solution of advertising and other
marketing problems. 8.
The discounts that the media offer to
agencies are also available to advertisers.
This is a strong stimulus to them to use
an agency, for the media cost is not9.
much affected thereby.
The company normally does not have as
many types of specialists as a large or
medium-sized advertising agency has
because an agency can spread the costs
or its staff over many clients. It can do
more for the same amount of money.
The company can also get an objective,
outside viewpoint from an agency,
assuming that the agency representatives
are not acting as “Yes man” in order to
keep the advertiser’s account.
A related point is that the company can
benefit from the agency’s experience
with many other products and clients.
Another advantage is that agency feels a
greater pressure than the company’s own
department to produce effective results.
The relations between an agency and a
client are very easy to terminate; but it is
difficult to get rid of an ineffective
advertising department.
10. The manner in which agencies are
compensated, the use of an agency may
not cost the advertiser a single paisa.
Selecting an Agency
Here are some points that can help the advertiser to:
(i) Choose an agency :
• The agency should be able to think independently on various problems, and not solve them by pre-conceived notions
which it is unwilling to change.
• The agency should have experience in selling goods and ideas. It should be able to bring in more results than
anticipated.
• The company should be financially sound and should be able to cover both local and national advertising campaigns.
• The size of the agency should not be seriously taken into account. A big agency is not necessarily better than a small
agency.
• The agency should not be one that hesitates to correct the advertiser if it feels that he is wrong.
• The agency should be able to use both research and brains to solve problems.
• An agency that plans to make profit on an account should be chosen, rather than one that maintains that it will work
on a no-profit-no-loss basis.
Selecting an Agency
(ii) Get the best out of an agency
• The agency should be given all possible information if good service is expected from it.
• The advertiser should go as far as possible to keep the agency on its toes.
• The agency should be challenged to produce results.
• Criticism, when it is handed out, should not be only unfavorable. It should also be favorable.
• Unnecessary details should not be fussed over.
• The advertiser should appoint a special person for liaison work between his company and the agency, and not
expect the agency to contact the junior staff.
• The advertiser should allow the agency, where necessary, to break away from convention in its presentations.
• The agency should be paid extra, if it does any extra work.
• The advertiser should examine the work his agency does for other parties to get new ideas.
Assignment # 1
• Explain the following Paragraphs in your own words in group of 4 Persons after discussion.
“Advertising is a powerful communication force, highly visible, and one of the most important tools of marketing
communications that helps to sell products, services, ideas and images, etc. Many believe that advertising reflects the
needs of the times. One may like it or not but advertisements are everywhere. Advertisements are seen in newspapers,
magazines, on television and internet and are heard on radio. Advertising is one of the components of promotion and
promotion is the one of the important P’s of marketing mix. “
“Advertising management is mainly concerned with planning and decision making. The advertising manager is
involved in the development, implementation, and overall management of an advertising plan. The development of an
advertising plan essentially requires the generation and specification of alternatives. Decision making involves
choosing from among the alternatives. The alternatives can be various levels of expenditure, different kinds of
objectives or strategy possibilities, and kinds of options with copy creation and media choices. Advertising planning
and decision making depends on internal and external factors. Internal factors are situation analysis, the marketing
program, and the advertising plan etc.”
“An advertising agency is an independent organization set up to render specialized services in advertising in particular
and in marketing in general. The broad functions of an advertising agency are planning, preparing, and placing
advertisements. Planning begins with the advertiser, also known as client in advertising parlance. The broad objectives
of the advertising campaign are decided after talks with the client team during which the agency tries to find out about
the various characteristics of the product and its strengths and weaknesses in relation to competitive brands.”
THE END