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advertising agencies

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what agencies do.

structure & organization

and how theyre organized

to do it.

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7 primary services:

complete a marketing analysis

develop an advertising plan

prepare a creative strategy create advertising executions

develop and implement a media plan

handle billing and payments

integrate other marketing communications

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4 functions of full-service agencies

account management

creative media planning and placement

research

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agency organization chart

Print

Traffic

Production ProductionBroadcast Analysts

Other Marke ting

CommunicationsServices

[PR, e tc.]

Asst. Account

Executive

Account

Executive

Management

Supe rvisor

Account Mgmt.

Director

Copy Spvr. &

Copywriters

Art Supervisor

& Art Directors

Creative

Group:

Associate

Creative

Director

Creative

Exec CD

Rese arch

Assistants

Project

Managers

Rese arch

Director

Media

Planner

Media

Buyer

Media

Supe rvisor

Associate

Media

Director

Media Dept.

Director

Strate gy

Review Board[Managment

Committee]

Office Management

[Personnel,Accounting,

Legal, etc.]

Pre sident

[COO]

Board of

Directors

[Chairman/CEO]

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liaison between agency and client

responsible for understanding...the clients business

the clients marketing needs

strategy development

representing client point of viewwithin the agency

account management

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account managementdirector

management supervisor

account supervisors

account executives

assistant account execs account coordinators

trafficTraffic

Asst. Account

Executive

Account

Coordinator

Account

Executive

Account

Supervisor

Management.

Supervisor

Account Mgmt.

Director

account management

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responsibility

the creative department is responsiblefor creating and producing the print and

broadcast advertising strategy is key

good creative work is always guided by a

creative strategy that sets forth goals tobe accomplished and key messagepoints to be relayed

creative department

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creative department

executive & group creativedirectors

creative director

associate creative director

copywriters

art directors

broadcast producers

print production managers

traffic coordinatorsPrint

Traffic

ProductionBroadcastProduction

Copy Spvr. &Copywriters

Art Supervisor& Art Directors

CreativeGroup:

Associate

CreativeDirector (ACD)

CreativeDirector (CD)

Executive

CreativeDirector (ECD)

StrategyReview

Board

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media department

The media department has two mainfunctions - planning and buying.

The planning group handles morestrategic marketing and media issues.

The buying group handles medianegotiations and implementation.

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media director

associate media directors

media supervisors

media planners

media buyers

media analystsAnalysts

Media

Planner

Media

Buyer

Media

Supervisor

Associate

MediaDirector

Media

Director

MediaPlan

media department

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mega-agency media departments

have now become profit centers agencies have set up their media

departments as free-standing units

many large clients now look at mediaas a separate service

big changes in the

media department

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research department

interpret market environment gather and analyze research data.

primary and secondary techniques determine consumer needs/perceptions

understand problems

advise how ads can meetstrategic goals

help find solutions

ResearchReport

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research director

research project managers

research assistants

outside researchspecialists

research department

ResearchSuppliers

Outside

Research

Assistants

ProjectManagers

Research

Director

Research

Report

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auxiliary agency functions

account planning

strategy/creative review board

office management

human resources

legal services accounting

recruitment

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3 ways agencies make money

commissions

usually 15% of gross costs

fees

usually based on negotiated hourly rate

incentives

still relatively new and problematic

usually based on performance goals

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agency commissions

media commission system

15% media commission

adjustable commission rates

negotiate to match client budget

sliding scale

markups-production & service

add a percentage markup to costs

17.65% of net = 15% of gross

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4 types of fee systems

fixed fee (retainer)

cost-plus fee

performance fee

hybrid fee &

commission

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incentives

in theory, a good way to work

get paid based on how well you do, not

how much you bill in practice, difficult to implement

if client makes final decision (instead ofagency), how can agency be responsiblefor final results?

results based on many factors, such ascompetitive efforts, not just advertising

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new business

three primary sources

build existing clients business

add and sell new IMC services

solicit new accounts

two ongoing problems

spec work

teams walking with accounts

The critical objective and role

of any ad agency is gainingnew business.

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things to think about:

why might you be interested ingoing into the agency business?

what might keep you from choosinga career in the agency business?