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The Agency WorldChapter 2
The Agency World
The traditional agency New agency structures The growing range of specialists Selecting an agency Paying the agency
The agency worldObjectives
Understand the role of advertising agencies and the relationship between agency and client
Appreciate the factors that promote creative and effective advertising
Introduction
No business needs an agencyCan buy different services
from separate specialistsMost businesses find it easier
to use an agency
Alternative ways to perform the advertising function
Necessitates employing an advertising staff and absorbing the operation costs
Unprofitable unless a company does a large and continuous advertising
In-house advertising operation
Full-service advertising agencyAdvantages
In-depth knowledge and skills Obtaining negotiating muscle with the media Coordinating advertising and marketing efforts
Disadvantages Some control is lost Larger clients are favored over small clients Occasionally inefficient in media buying
A la carte
Advantages Use services only when they are needed Availability of high-caliber creative talent Potential cost efficiencies
Disadvantages Specialists approach client problems in a
stereotyped fashion Lack of cost accountability Financial instability of smaller boutiques
Advertising Agency Organization
Develop advertising copy and campaigns
Copywriters, production people, and creative directors
Creative Services
Account Management
Media Services
Research Services
Advertising Agency Organization
Selecting the best advertising media
Media planners develop overall media strategy
Media buyers procure the selected media
Creative Services
Account Management
Media Services
Research Services
Advertising Agency Organization
Study clients’ customers’ buying habits, purchase preferences, and responsiveness
Focus groups, mall intercepts, acquisition of syndicated research data
Creative Services
Account Management
Media Services
Research Services
Advertising Agency Organization
Link the agency with the client
Act as liaisons so that the client does not need to interact directly with several different service departments and specialists
Creative Services
Account Management
Media Services
Research Services
Memorable Advertising
Apple Computer’s “1984” TV Commercial
What Makes Effective Advertising?
Sound
Strategy
Consumer’s
View Persuasive
Doesn’t
Overwhelm
Deliver on
Promises
Break
Clutter
Effective
Advertising
Creating Effective Advertising
The Role of Creativity
Being Creative
Characteristics of creative
campaigns
Differentiates itself
Out-if-the-ordinary
Energizer Batteries
Energizer Batteries
Energizer Batteries keep going, and going, and going…
Like the drum-beating bunny that reinforces the argument
Being Creative
Characteristics of creative
campaigns
Differentiates itself
Out-if-the-ordinary
Energizer
Batteries
Pepsi-Cola
Pepsi-ColaPepsi-Cola commercial
pokes fun at its competitor,
Coca-colaand subtly
conveys themessage that
perhapsPepsi is better
than Coke
Being Creative
Characteristics of creative
campaigns
Differentiates itself
Out-if-the-ordinary
Energizer
Batteries
Pepsi-Cola
Volkswagen
Golf
Being Creative
Characteristics of creative
campaigns
Differentiates itself
Out-if-the-ordinary
Energizer
Batteries
Pepsi-Cola
Volkswagen
Golf
Bud Light
Creating Effective Advertising
The Role of Creativity
Spuds MacKenzie campaign Budfrogs Louie and Frank Whassup?!
Little Caesar’s
The toga-clad “Pizza, Pizza” man captures and holds the
viewer’s attention and
provides Little Caesar’s with a unique image vis-a-vis its more laid-backcompetitors
Volkswagen Golf
This simple ad dramatizes that the Volkswagen
Golf is a roomy car while holding the viewer’s
attention in an entertaining manner
New agency structures
Three factors that influence the ways in which new agency formats have emerged
The new agency structures
Technological changes Growing importance of
internationally held accounts for large agencies
Recognition that different clients have diversified needs
Reorganizing the old
The ‘account room’ approach Structure the agency around its
clients - creates a focus for the account
team - keeps them close to the brand
Reorganizing the old
The “Virtual Account Group” or “Virtual agency”
Uses linked computers Intranet Video conferencing High tech connections
Reorganizing the old
“hot desking” First come first served offices
Results of reorganization
Gets agencies away from what they always criticized in their clients.
- focus on products and production with less regard to customers needs
- Allows for anyone on the team to be involved in the creative process.
Specialist Agencies
Media Buying agencies Creative boutiques Direct marketing Account planning Management consultants
Media Buying Agencies
Buy blocks of space or time from media business
Effectively became media wholesalers
An important source of advertising research
Creative Boutiques
Creative hot-shops Using briefs from clients – create
advertisements Often freelancers Assist full service agencies when
under pressure
Direct Marketing
Nowadays full service agencies are merging or aquiring direct specialists
Allows for common creative direction
Also developing new skills necessary for the internet advertising market
Account Planning
Take over the planning role for an agency
Act as supplementary source of ideas for agency or advertiser
Management consultants
Provide general consultancy on brand strategy
Selecting an agency Have they fully understood the brief? Do they know how to use market research? Can
they contribute to our thinking here? Is their strategic thinking sound? Is it imaginative? Have I learned anything useful
from it?
Are they professional and businesslike? Can I work with their senior people? And will
they be actually working on my business? Are their capabilities high in all key areas –
management, strategy, creative, media? Do they work well as a team – both among
themselves and with our people?
Selecting an agency
Is their creative work of a high quality?
Is this confined to TV, or does it go across all media?
Does this include below-the-line? New media? Can they offer an integrated service?
Do they have real expertise in the specialist areas which we are looking at, egl direct marketing, new media?
Can they work with us internationally (now or in the future)
How do they propose to evaluate the effectiveness of the campaign?
Selecting an agency What is their attitude to costs? Will they save us
money? How will they relate to our media buying
agency/other specialists? How important to them will our account be? Will
we be one of their larger accounts, or simply a small fish in a very large pool?
Will they fit with our ways of working? Are they willing and able to be business partners, or will they simply be suppliers? (This depends – of course – on how we see our own style of dealing with agencies)
Agency Compensation
• Commissions from media (15%)• Reduced commission system(<15%)
• Labor-based fee system
• Outcome-based
Three Sources