INTEGRATED MARKETING COMMUNICATION

Managing an Advertising Agency

Group 4 Rahul Dey 10020241021 Amrit Pathak 10020241062 Naveen Kumar 10020241070 Prashant Maurya 10020241107

Running an ad agency requires midnight oil, salesmanship of the highest order, a deep keel, guts, thrust and a genius of sustaining the morale of men and women who work in a continuous state of anxiety - David Ogilvy

Ad Agency
Internal Ad Agency Useful in advertising Highly Complex products Cheaper to use in-house ad agency External Ad Agency Better suited to standard or simpler products Likely to be more Objective.

Account Management

Direct link between ad agency and client Depending upon the size of the account and its advertising budget one or two account executives serve as liason to the client Mainly responsible to gain knowledge about the clients business, profit goals, marketing problems and advertising objectives. Getting approved the media schedules, budgets and rough ads or story boards from the client Communication with client-stewardship reports and periodic review.

Media department
Develop a media plan to reach the target audience effectively in a cost effective manner Decision based on research of which media to choose Eg: P & G using social media-TREMOR Large advertisers seem to be more inclined to consolidate media buying with one or few agencies thereby saving money and improving media efficiency

Media Buying: Large Companies Companies

Small

75-15-10 Breakdown 75%-Media time or space buying 15%-Agency fees 10%-On actual ad

25-40-35 breakdown

Creative DepartmentCopywriters

Most important department Conceive ideas for the ads and write the headlines, subheads and the body copy Deciding the basic theme of the advertising campaign, and often preparing the rough layout of the print ad or the commercial story board. Prepare the Creative Brief

Production department

After completion of copy and illustrations, ad is sent to production department TV Ads- May supervise the casting of actors to appear in the ad, the setting for scenes and selecting an independent production studio Print Ads- hire printers, photographers, engravers, typographers and others to complete the finished ad.

Finance and accounting department

a)
b)

Ogilvy states that average profit after taxes is less than 1% Only 4% of total US advertising changes agencies every year. Revenue: Done through commission Fee system(Pioneered by Ogilvy)-Advertisers pay for exact services wanted, no extra charges/hidden costs

Profits-What to do?

Branch offices in other cities-maintain same ethos Buy the building which houses the officeYoung and Rubicam did this in New York Acquire agencies in a different fieldspecialized agencies

CEO Level-Tips for Talent Acquisition

If each of us hires people who are smaller than we are,we shall become a company of dwarfs. But if each of us hires people who are bigger than us,we shall become a company of Giants- David Ogilvy

Hire Crown Princes The power of analysis, Imagination, a sense of reality, helicopter quality. Hire from outside as well as grow talent

Dont Hire Clients relatives, your own relatives and never hire clients.

Fire The worst of politicians,a rival employee who denounces the rival, discourage poaching. Follow Mckinsey rule of accomplishment and written set of principles

5 tips by David Ogilvy

1.

2.

3. 4.

5.

Never allow two people to do a job which one could do. Never summon people to your office, it frightens them, go see them in their office. Action is sought by communicating verbally Do not use products which compete with your clientss products Never write letters of complaint or criticize a product, in case the company chooses your agency in future.

The Shift

Interpublic, Omnicom, Publicis and WPP generate approximately two-thirds of the top 50 agency revenues worldwide. Progressively moving from the traditional stables of advertising and media toward marketing services Claim that the client demands have been shifting towards targeted advertisements. The shift is marked towards:

Marketing Services Digital and Faster-Growing Markets

Broad changes in terms of:

The way businesses are acquired SEO forms an important part of business strategy An agency blog forms an important component of marketing the agency itself **'Marketing services is a broad category encompassing market research, PR,
sponsorship and direct below-the-line marketing.

Managing in the changing times

WPP is reshaping its revenue mix- Expanding offering in Data analysis and representing 60% of revenues in the current fiscal through Marketing Services. Publicis too has been reducing its reliance on pure advertising towards a more directed digital offeringIt in fact claims to be the one stop digital marketing solution provider. Objective is to generate 65% of revenues from combination of digital and faster growing markets by 2013.

Recent growth has been sustained through

Complexity

Client reviews in recent years have generally become more complicated The changing nature of businesses Even the choice of the leaders goes toughSaatchi & Saatchi's just-completed CMO search lasted a year The more common presence of search consultants At the same time, agencies are reinventing themselves to the digital age.

Cost Issues

Staff costs: Form the bulk of operating expenses across the board
For

e.g. in FY2010, staff costs accounted for 58.3% and 61.8% of total costs at WPP and Publicis, respectively

Creativity Management
Factors supporting creativity

Importance of Creativity

Organizational Encouragement Supervisory Encouragement Work Group Support Sufficient Resources Challenging Work Environment Freedom Low Organizational Impediments

Forms core of an agencys capability and the main reason why clients outsource!

**Based on Amabile et al. (1996), Revisited by Willem Verbeke, Philip Hans Franses, Arthur le Blanc, and Nienke van Ruiten, Netherlands.