Date post: | 18-Dec-2015 |
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The Structure of the Advertising The Structure of the Advertising Industry: Industry:
Advertisers, Agencies, Media Advertisers, Agencies, Media Companies, and Support Companies, and Support
OrganizationsOrganizations
Marketing 3344
Trends Affecting the Advertising and Promotion Industry
• The “Undoing” of Agency The “Undoing” of Agency Consolidation and Globalization—or Consolidation and Globalization—or notnot
• Media Proliferation, Consolidation, Media Proliferation, Consolidation, and “Multiplatform” Media and “Multiplatform” Media OrganizationsOrganizations
• Media Clutter and FragmentationMedia Clutter and Fragmentation• Consumer Control: Blogs and TiVosConsumer Control: Blogs and TiVos• Web 2.0Web 2.0
Scope of the Advertising Industry
U.S. Advertising SpendingU.S. Advertising Spending >$300 B>$300 B
Worldwide Advertising Worldwide Advertising Spending Spending>$600B>$600B
Structure of the Advertising Industry
Advertisers
External Facilitators
Advertising and Promotion Agencies
Media Organizations
Target Audience
Advertisers
GovernmentGovernmentFederal, State, LocalFederal, State, Local
Social/Not-for-profit Social/Not-for-profit OrganizationsOrganizations
United Way, Nature ConservancyUnited Way, Nature Conservancy
Manufacturers and Service Manufacturers and Service FirmsFirms
Procter & Gamble, VerizonProcter & Gamble, VerizonTrade ResellersTrade Resellers Sears, McDonald’sSears, McDonald’s
Ad in Context Example
In addition to companies, the government makes extensive use of advertising.
In addition to companies, the government makes extensive use of advertising.
The Role of the Advertiser in IBP
• Describe the value that the firm’s Describe the value that the firm’s
brand provides brand provides
• Describe the brand’s position in the Describe the brand’s position in the
market market
• Describe the firm’s objectives for the Describe the firm’s objectives for the
brand in the near-term and long-termbrand in the near-term and long-term
The Role of the Advertiser in IBP• Identify the target market(s) that are Identify the target market(s) that are
most likely to respond favorable to the most likely to respond favorable to the brandbrand
• Identify and manage the supply Identify and manage the supply
chain/distribution system that will most chain/distribution system that will most
effectively reach the targetseffectively reach the targets
• Be committed to using advertising and Be committed to using advertising and
other promotional tools to grow the other promotional tools to grow the
brandbrand
Agencies
• AdvertisingAdvertising
Agencies:Agencies:–Full-ServiceFull-Service–Creative BoutiqueCreative Boutique–InteractiveInteractive–In-House In-House –Media SpecialistsMedia Specialists
• Promotion Promotion Agencies:Agencies: /Direct Marketing/ Direct Marketing־
DatabaseDatabase E-commerce E-commerce־ Sales Promotion Sales Promotion־Event PlanningEvent Planning־Design FirmsDesign Firms־Public RelationsPublic Relations־FirmsFirms
Ad in Context Example
Advertising agencies make extensive use of advertising to acquire new clients.
Advertising agencies make extensive use of advertising to acquire new clients.
Full Service Agency Services
• Account ServicesAccount Services
• Marketing Research ServicesMarketing Research Services
• Creative and Production ServicesCreative and Production Services
• Media Planning and Buying ServicesMedia Planning and Buying Services
• Administrative ServicesAdministrative Services
Agency Compensation
• Commissions:Commissions:– around 15% of airtime fees—in fluxaround 15% of airtime fees—in flux– 16 2/3 percent for outdoor media16 2/3 percent for outdoor media– web media is all negotiated web media is all negotiated
• Markup Charges:Markup Charges:– production cost + fixed %production cost + fixed %
• Fee Systems:Fee Systems:– hourly rates, or by projecthourly rates, or by project
• Pay-for-Results:Pay-for-Results:– tightly-specified objectivestightly-specified objectives
External Facilitators
• ConsultantsConsultantsCreative, Media, DatabaseCreative, Media, Database
• Production FacilitatorsProduction Facilitators
• Software FirmsSoftware FirmsWeb tracking, fulfillmentWeb tracking, fulfillment
Media Organizations• BroadcastBroadcast
• TV, radioTV, radio• PrintPrint
• Magazines, direct mail, Magazines, direct mail, • Newspapers, specialtyNewspapers, specialty
• Interactive MediaInteractive Media• Internet, interactive Internet, interactive
broadcast, broadcast, • iPod, Cell PhoneiPod, Cell Phone
• Support MediaSupport Media• Outdoor, directories, Outdoor, directories,
sponsorship, sponsorship, • Point-of-purchase, branded Point-of-purchase, branded
entertainmententertainment• Media ConglomeratesMedia Conglomerates
• Time Warner, Disney, TurnerTime Warner, Disney, Turner
Target Audiences
• Household ConsumersHousehold Consumers• BusinessesBusinesses• ProfessionalsProfessionals• Government OrganizationsGovernment Organizations