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.