Chapter 3

Organizing for
Advertising and
Promotion: The Role
of Ad Agencies
and Other Marketing
Communication
Organizations

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Education.
Participants in the Integrated Marketing
Communications Process
Advertisers or clients

Advertising agency

Media organizations

Specialized marketing communication services

organizations

Collateral services organizations

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 Figure 3.2 - The Advertising
Department under a Centralized System

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 Figure 3.3 - Decentralized Brand
Management System

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Figure 3.4 - Comparison of Advertising
Organizational Systems

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 Advertising Agencies
 Service organizations that specialize in planning
and executing advertising programs for its clients
 Superagencies: Large agencies that merged with or
acquired other agencies and support organizations
 Have now evolved into 4 major agency holding
companies?

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 Reasons for Using an Ad Agency
Highly skilled specialists

Specialization in a particular industry

Objective viewpoint of the market

Broad range of experience

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

Strategic
Strategic market
market Interactive
Interactive
planning
planning capabilities
capabilities
Nonadvertising
Nonadvertising
services
services Sales
Sales Package
Package design
design
promotions
promotions

Direct
Direct Public
Public relations
relations
marketing
marketing and
and publicity
publicity
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 Figure 3.6 - Full-Service Agency
Organization Chart

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 Agency Services

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 Creative Boutiques
 Small ad agencies that provide only creative
services
 Advantages
 Turn out inventive creative work quickly
 Provide more attention and better access to creative
talent

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 Media Specialist Companies
 Specialize in the buying of media
 Agencies and clients develop media strategy
 Media buying organizations implement strategies,
and buy time and space

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 Agency Compensation Methods

Fee, cost, and

Commissions
incentive-based
from media
systems

Percentage
charges

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 Evaluating Agencies
Financial audit Qualitative audit

Costs, expenses Planning

Personnel hours billed Program development

Payments to media Implementation

Payments to suppliers Results achieved

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 Figure 3.9 - How Agencies Add Value
to Client’s Business

Source: “Report on the Agency–Advertiser Value Survey,” American Association of Advertising Agencies and Association of National Advertisers, August
2007

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 Direct-Marketing Agencies
 Provide a variety of services
 Database analytics and management
 Direct mail
 Research and media services
 Creative and production capabilities
 Has following departments
 Account management
 Creative
 Media
 Database development/management
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 Sales Promotion Agency
 Involved with the developing and managing of
sales promotion programs
 Provide following services
 Promotional planning, creative research, and tie-in
coordination
 Fulfillment
 Premium design and manufacturing
 Catalog production
 Contest/sweepstakes management
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 Functions Performed by Public
Relations Firms
Strategy Generating
Lobbying
development publicity

Public News releases,

Research
affairs communication

Coordination
Managing Special
w/promotional
crisis events
areas
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 Digital/Interactive Agencies
 Specialize in the development and strategic use of
various digital marketing tools
 Websites for the Internet
 Banner ads
 Search engine optimization
 Mobile marketing
 Social media campaigns

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 Collateral Services
Marketing research

Package design

Consultants

Photographers

Printers

Video production

Event marketing

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