Role & Functions of Advertising Agencies

The critical objective and role of any ad agency is gaining new business.

what agencies do.structure & organizationand how theyre organizedto do it.

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

4 functions of full-service agencies account management creative media planning and placement research

agency organization chart

liaison between agency and client responsible for understanding... the clients business the clients marketing needs strategy development representing client point of view within the agencyaccount management

account management director management supervisor account supervisors account executives assistant account execs account coordinators trafficaccount management

responsibility the creative department is responsible for 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 to be accomplished and key message points to be relayedcreative department

creative department executive & group creative directors creative director associate creative director copywriters art directors broadcast producers print production managers traffic coordinators

media department The media department has two main functions - planning and buying. The planning group handles more strategic marketing and media issues. The buying group handles media negotiations and implementation.

media director associate media directors media supervisors media planners media buyers media analysts

MediaPlanmedia department

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 media as a separate service

research department interpret market environment gather and analyze research data. primary and secondary techniques determine consumer needs/perceptions understand problems advise how ads can meet strategic goals help find solutions

ResearchReport

research director research project managers research assistants outside research specialistsresearch department

ResearchReport

auxiliary agency functions account planning strategy/creative review board office management human resources legal services accounting recruitment

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

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

4 types of fee systems fixed fee (retainer) cost-plus fee performance fee hybrid fee & commission

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 of agency), how can agency be responsible for final results? results based on many factors, such as competitive efforts, not just advertising

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

things to think about: why might you be interested in going into the agency business? what might keep you from choosing a career in the agency business?

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