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Six active participants in modern communication• The advertiser• The ad agency: Organizations which accept the brief from the advertiser
and do a campaign on advertiser’s behalf.• Media Owners: Publishing houses Special magazines(industry
journal),directories, year books etc. Broadcast media for TV Radio and films. Outdoor advertisers, Organizers of Exhibitions, Event management companies etc.
• PR Consultants: They operate independently or they can be found in the PR department of an ad agency.
• Ancillary Services: They are needed to produce/create an advertisement. They render services like studio service, photography service, printing service, gift item producers etc.
• Free lancers: Copywriters, jingle singers, radio announcers, artists, visualizers, technical writers etc.
Ad Agencies• Ad agencies are a kind of service organization that specializes in
planning and executing advertisement programs for its clients.
Why agencies??• Provides specialized services.• Holds experience in marketing communication. The agencies are
expert in this field• Employs specialists like artists, writers, media analysts, researchers
and others with specific skills. The agencies make optimum use of these people
• Many agencies are specialized in a particular type of business. E.g. Mentus Inc., An US based firm. is an agency specializes in IMC for the high tech, E commerce, and bioscience industries.
• Hiring them leads in saving the costs up to some extent.
Functions of an Advertising Agency
• Planning and Managing Advertising Tasks• Creative Work• Branding• Marketing and Public Relations
Role of Advertising Agencies
1.Creating an advertise on the basis of information gathered about product2.Doing research on the company and the product and reactions of the customers.3.Planning for type of media to be used, when and where to be used, and for how much time to be used.4.Taking the feedbacks from the clients as well as the customers and then deciding the further line of action
Types of ad agencies
• Full service agencies: It offers its clients a full range of marketing, communications and promotions services including planning creating and producing the ad, performing research and selecting media. It may also offer non advertisement services like public relations, publicity, direct marketing and sales promotion etc.
• Internet/Interactive/Digital Agency: These agencies design websites, social media networks and manage blogs.
• Direct Marketing Agency: These agencies specializes in direct mailing.• Creative Boutiques: These agencies create ads only. They perform no
task other than developing the actual ad that too in a very creative manner.
• Media Buying agencies• Buys place for advertise and sells it to the advertisers.• Sells time in which advertisement will be placed.• Schedules slots at different television channels and
radio stations.• Finally supervises or checks whether the ad has been
telecasted at opted time and place or not.
• In House agencies: Big organizations prefer this kind of structure wherein they have their own ad agency in the organization.
Other marketing agencies• Promotion agencies: This type of agencies generally with retail and
package-goods clients for promotional campaigns that include advertising, coupons, sweepstakes, contests, loyalty programs, merchandising displays, packaging and related; today many promotion agencies are hybrids that will do all other types of marketing.
• PR Agencies: Media relations, investor relations, and crisis communications. Traditional PR activities include news announcements, article writing and placement, and press conferences or events. PR firms often engage in event marketing, new product launches, website development, social media, and educational initiatives. Also, advertising or marketing agencies often provide PR services.
• Social Media Agencies: Social media agencies specialize in creating and managing a brands social media networks. Social media agencies command most of the effort including Facebook, Twitter, YouTube, LinkedIn, along with newer networks like Instagram. Beyond profile design and implementation, social media agencies often manage blogs, content research and development, video, and increasingly web design, and search engine optimization.
• Specialty Agencies : This kind of agencies either focus on a functional marketing discipline or niche market segment. functional specialists include search optimization or paid search, packaging and merchandising, video, or brand name development. Market or category specialists include different cause marketing, healthcare marketing, and software marketing agencies etc.
• Design Agencies: Design agencies often perform a variety of services including brand identity, website design, advertising, packaging, brochures and all types of print collateral, and more.
• Branding agencies: Branding agencies provide a range of services from logos, to brand name development, to packaging, graphic identities, signage, and environmental design (typically retail store design).
Types Of Advertising Agencies. (Summary)
Full service Agencies1. Large size agencies.2. Deals with all stages of advertisement.3. Different expert people for different departments.4. Starts work from gathering data and analyzing and ends on payment of bills to
the media people.Interactive Agencies
5. Modernized modes of communication are used.6. Uses online advertisements, sending personal messages on mobile phones,
etc.7. The ads produced are very interactive, having very new concepts, and very
innovative.Creative Boutiques
8. Very creative and innovative ads.9. No other function is performed other than creating actual ads.10.Small sized agencies with their own copywriters, directors, and creative people.
Media Buying Agencies11.Buys place for advertise and sells it to the advertisers.12.Sells time in which advertisement will be placed.13.Schedules slots at different television channels and radio stations.14.Finally supervises or checks whether the ad has been telecasted at opted time
and place or not.In-House Agencies
15.As good as the full service agencies.16.Big organization prefers these type of agencies which are in built and work only
for them.17.These agencies work as per the requirements of the organizations.
Client Agency Relationship
• Client-agency relationship commences when an advertised hires an agency to make an ad.
• Following are the points that needs to be taken care of for cordial relationship between the client and the agency:
Meaningful two way communicationFocus on long term relationshipHonest and sincere efforts towards win-win situation.
Agency Compensation
• Commission from the media (Percentage based)• Fixed Commission• Fee, cost and incentive based systems• Percentage charges
Organizing for Advertising and Promotion
•The way a company (the client) organizes depends on• Its size• The number of products it markets• The role of advertising and promotion in the
marketing mix• The budget• Its marketing organization structure
Advertising Dept. Under Centralized System
President
Production Finance Marketing Research and develop-ment
Human resources
Marketing research Advertising Sales Product
planning
Pros & Cons of a Centralized System
Fewerpersonnel
Bettercommunications
Continuity
Longerresponse time
Less goalinvolvement
TheCentralizedSystem
+ Positive - Negative
Impractical formultiple brands, products, divisionsMore top
management involvement
Decentralized Advertising System
Production Finance
Sales
Brand Manager
Ad agency
ProductManagement
Sales promotion
Package design
Marketingservices
Marketing R & D Human Resources
Corporate
Brand Manager
Ad agency
AdvertisingDept
Marketing Research
Merchandising
Pros & Cons of Decentralization
Internal conflicts
Ineffective decision making
Rapid problemresponse
Concentratedattention
Increasedflexibility
TheDecentralizedSystem
+ Positive - Negative
Unequal distribution of funds
Lack ofAuthority
In-House Agencies
Benetton’s in-house agency works with outside agencies to develop ads
Pros & Cons of In-House Agencies
Morecontrol
Costsavings
Bettercoordination
Lessobjectivity
Lessexperience
TheIn-houseAgency
+ Positive - Negative
Lessflexibility
The Ad Agency’s Role
•Reasons for using an ad agency• Highly skilled specialists• Specialization in a particular industry• Objective viewpoint of the market• Broad range of experience
Ad Agencies Have Skilled Specialists
Artists Writers Researchers
Photographers Media Analysts Other Skills
Full-Service Agencies
Creating advertising
Planning advertising
Producing advertising
Performing research
Selecting media
Sales promotions
Strategic market planning
Direct marketing
Interactive capabilities
Package design
Full range of marketing communication and promotion services
Nonadvertising services
Public relations and publicity
Typical Full-Service Agency Organization
WritersArt directors
TVproduction
Traffic
Printproduction
AccountExecutive
Accountsupervision
VP accountservices
Media
Research
SalesPromotion
VP marketingservices
Personnel
Accounting
FinanceOfficemanagement
VP managementand finance
President
Board ofdirectors
VP creativeservices
Services Provided by Agencies
Agency Services
Research departmentMay include account plannersMedia dept. obtains media space, time
Marketing Services
The link between agency and clientManaged by the account executive
Account Services
Creation, execution of adsCopywriterartists, other specialists
Creative Services
AccountingFinanceHuman resourcesNew business generation
Mgmt & Finance
The Role of Creative Boutiques
CreativeBoutiques
Provide only creative services
Full-service agencies may subcontract with creative boutiques
Ability to turn out inventive creative work quickly
Media Buying Can be Specialized
Specialize in buying media, especially broadcast time
Agencies and clients develop media strategy
Media Specialist Companies
Media buying organizations implement the strategy and buy time and space
Methods of Agency Compensation
Commissionsfrom media
Fee, cost, and incentive-based systems
Percentagecharges
CompensationMethods
Evaluating Agencies
Financial Audit Qualitative Audit
Verify costs, expenses
Personnel hours charged
Payments to media
Payments to suppliers
Planning
Program development
Implementation
Results achieved
Steps in Selecting an Advertising Agency
Set goals.Select process and criteria.Screen initial list of applicants.Request client references.Reduce list to two or three viable agencies.Request creative pitch.Select agency.
• Size of the agency• Relevant experience of the agency• Conflicts of interest• Creative reputation and capabilities• Production capabilities• Media purchasing capabilities• Other services available• Client retention rates• Personal chemistry
Evaluation Criteria in Choosing an Ad Agency
Top Agency Value-Add Activities
New media guidance, solutions
Integrated disciplines &
functions
Creative ideas
Collaboration
Ideas/programs for multi comm.
programs
Talented people
Brand driver evaluation
Loyalty to a Single Agency
Young & Rubicam has handled the
Dr Pepper account for over 30 years
Why Agencies Lose Clients
Poorperformance
Poorcommunications
UnrealisticClient demands
Personalityconflicts
Personnelchanges
Changesin size of client or agency
Conflicts ofinterest
Change in client’s strategy
Decliningsales
Paymentconflicts
Policy Changes
How Agencies Gain Clients
Referrals
Solicitations
Presentations
Public Relations Image, Reputation
Direct-Marketing Agency Activities
Directmail
Databasemanagement
Research
Creative
Media services
Direct-MarketingAgencies
Production
Database development, management
Direct-Marketing Agency
•Departments in a typical direct-marketing agency• Account management• Creative• Media• Database development and management
Sales Promotion Agencies
Catalog production
Promotional planning
Creative research
Tie-in coordination
Fulfillment
Premium design and manufacturing
Contest/sweepstakes management
Functions Performed by Public Relations Firms
Strategydevelopment
Generatingpublicity
Lobbying
Publicaffairs
News releases,communication
Research
Managingcrises
Coordinationwith promotionalareas
Special events
Functions Performed by Interactive Agencies
Webbanner ads
Search engine optimizationKiosks
Interactive Media Creation
CD-ROMs
Web sites Text messages
Pros and Cons of Integrated Services
Convenience
Greater synergy
Single image for product or service
Poor communication
Budget politics
Integrated Services
+ Positive - Negative
No synergy
FCB Grid Foote, Cone, Belding matrixThis matrix was developed by Foot, Cone & Belding and marries the way consumers approach the purchase process with the selling strategy you should adopt for maximum ROI of your budgets.This is also a good revisit when you feel you have a strong communication idea but feel that the consumer is just not picking it up.