Advertisement ad agencies cb_ ind mktg_
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Advertising World
Participants in the IMC Process
Marketing Communications Specialist Organization
Marketing Communications Specialist Organization
Media OrganizationsMedia Organizations
Advertiser (Client)Advertiser (Client)
Advertising AgencyAdvertising Agency
Collateral ServicesCollateral Services
Direct Response Agencies
Direct Response Agencies
Sales Promotion Agencies
Sales Promotion Agencies
Interactive Agencies
Interactive Agencies
Public Relations
Firms
Public Relations
Firms
“THE CONSUMER”
The client is ultimately a consumer for an advertising agency.
The company wants an ad to be prepared keeping in mind the final end consumer
4
Consumer in the Real World
Social classSocial class
Geo-politicsGeo-politics
RitualsRituals
FamilyFamily ValuesValues
ReferenceGroups
(membership/aspiration)
ReferenceGroups
(membership/aspiration)
Race /Ethnicity
Race /Ethnicity
GenderGender
CultureCulture
CommunityCommunity
ObjectMeaningObject
Meaning
Factors Affecting Consumer Decision Making
SUBCULTURESSUBCULTURESSUBCULTURESSUBCULTURES
MEDIAMEDIAMEDIAMEDIA
NEWSNEWSMAGAZINESMAGAZINES
RADIORADIOTELEVISIONTELEVISION
DIRECT MEDIADIRECT MEDIABLOGSBLOGS
INTERNET INFOINTERNET INFO
NEWSNEWSMAGAZINESMAGAZINES
RADIORADIOTELEVISIONTELEVISION
DIRECT MEDIADIRECT MEDIABLOGSBLOGS
INTERNET INFOINTERNET INFO
NEEDSNEEDSNEEDSNEEDS
PRICEPRICEPACKAGINGPACKAGING
ADVERTISINGADVERTISINGPROMOTIONPROMOTION
PERSONAL SELLINGPERSONAL SELLING
PRICEPRICEPACKAGINGPACKAGING
ADVERTISINGADVERTISINGPROMOTIONPROMOTION
PERSONAL SELLINGPERSONAL SELLING
MARKETER-MARKETER-CONTROLLEDCONTROLLED
STIMULISTIMULI
MARKETER-MARKETER-CONTROLLEDCONTROLLED
STIMULISTIMULI
EDUCATIONEDUCATIONEDUCATIONEDUCATION
VALUESVALUES // ATTITUDESATTITUDESVALUESVALUES // ATTITUDESATTITUDES
PASTPASTEXPERIENCEEXPERIENCE
PASTPASTEXPERIENCEEXPERIENCE
PERSONALITYPERSONALITYPERSONALITYPERSONALITYPLEASUREPLEASUREPLEASUREPLEASURE
GENDERGENDERGENDERGENDER
CULTURECULTURECULTURECULTURE
LIFE-STYLELIFE-STYLELIFE-STYLELIFE-STYLE
SOCIALSOCIALCLASSCLASSSOCIALSOCIALCLASSCLASS
REFERENCEREFERENCEGROUPSGROUPS
REFERENCEREFERENCEGROUPSGROUPS
FAMILYFAMILYFAMILYFAMILY
SITUATIONALSITUATIONALFACTORSFACTORS
SITUATIONALSITUATIONALFACTORSFACTORS
CONSUMERCONSUMERDECISIONSDECISIONS
CONSUMERCONSUMERDECISIONSDECISIONS
• Keeping & understanding all these in mind, an ad agency works.
Advertising AgencyAgency –of-record (AoR)
• There are special groups which operate as consultants and who aid either the advertiser, the media firm or the media in the development of the ad.
• The ad agency is an independent company set up to render specialized services in advertising in particular & marketing in general.
• Many companies have their own active advertising departments which develop the ad message and select proper media for its execution.
• While there are special service groups which operate as consultants and who aid the advertiser.
• The advertiser should select an advertising agency on the basis of compatibility, agency size, agency stability, agency team service, selling attitude, creativity & problem solving approach
• Previously ad agencies started as space brokers for handling of the advertisements placed in the newspapers.
• It may be a full scale agency or part scale agency.
• Sometimes, several agencies in the same area because they believe the competition will result in better work
Why an advertising agency?
• Provides specialized services
• Objective advice
• Experienced staffing
• Tailored management of all advertising activities and personnel.
2 primary roles of agencies
• idea generation
• brand-building
Idea generation Brand Building
Ideas about promotion, product development, marketing strategies,
• To create and direct communication about a product or service so that the brand is perceived to have a unique value or brand personality.
Other Functions
• 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
Evolution of advertising agency
• 1840• Some people started working as Sales
representatives / space brokers for newspapers on a commission basis.
• Advertiser media= clients for agency• This era lasted from 1840-1876• Little emphasis on advertising planning & media
schedule.• J.Walter Thompson set up a shop in Mumbai in
1929 as a part of UK based agency for eastern operations. It was India's first advertising agency.
4 functions of an Ad Agency
• Account Management
• Creative Service
• Media Service
• Research Service
Advertising Agency Organization
• Develop advertising copy and campaigns
• Copywriters, production people, and creative directors
Creative Services
Account Management
Media Services
Research Services
creative department
• executive & group creative directors
• creative director• associate creative director• copywriters• art directors• broadcast producers• print production managers• traffic coordinators
Traffic
ProductionBroadcast
Production
Copy Spvr. &Copywriters
Art Supervisor& Art Directors
CreativeGroup:
AssociateCreative
Director (ACD)
CreativeDirector (CD)
ExecutiveCreative
Director (ECD)
StrategyReviewBoard
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
• media director
• associate media directors
• media supervisors
• media planners
• media buyers
• media analysts
Analysts
MediaPlanner
MediaBuyer
MediaSupervisor
AssociateMedia
Director
MediaDirector
MediaMediaPlanPlan
media departmentmedia department
Research Services
• 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
• research director• research project managers• research assistants• outside research specialists
research departmentresearch department
ResearchSuppliers
Outside
ResearchAssistants
ProjectManagers
ResearchDirector
ResearchResearchReportReport
research departmentresearch 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 solutionsResearchResearch
ReportReport
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
• account management director• management supervisor• account supervisors• account executives• assistant account execs• account coordinators • traffic
Traffic
Asst. AccountExecutive
AccountCoordinator
AccountExecutive
AccountSupervisor
Management.Supervisor
Account Mgmt.Director
account management account management
Classification of agencies
On the basis of Services
On the basis of
organizational set up
Location ( in or Outside)
the organization
Centralized System
PresidentPresident
ProductionProduction FinanceFinance MarketingMarketingResearch
and Develop-
ment
Research and
Develop-ment
Human ResourcesHuman
Resources
AdvertisingAdvertising Marketing Research
Marketing Research SalesSales Product
PlanningProduct Planning
On the basis of
organizational set up
FewerPersonnel
FewerPersonnel
BetterCommunications
BetterCommunications
ContinuityOf Staff
ContinuityOf Staff
LongerResponse Time
LongerResponse Time
Less GoalInvolvementLess Goal
InvolvementBetter
CommunicationsBetter
Communications
FewerPersonnel
FewerPersonnel
ContinuityOf Staff
ContinuityOf Staff
Less GoalInvolvementLess Goal
Involvement
LongerResponse Time
LongerResponse Time
Pros & Cons of Centralization
TheCentralized
System
TheCentralized
System
+ Positive+ Positive - Negative- Negative
Can’t DoMultiple Product
Lines
Can’t DoMultiple Product
Lines
Decentralized Brand Management System
Production Finance
Sales
BrandManager
Ad agency
BrandManager
Ad agency
ProductManagement
SalesPromotion
PackageDesign
Merchandising
AdvertisingDepartment
MarketingResearch
MarketingServices
Marketing Researchand
Development
HumanResources
Corporate
Competition for Resources
Competition for Resources
Competition for Resources
Competition for Resources
Lack of Experience
in IMC
Lack of Experience
in IMC
Lack of Experience
in IMC
Lack of Experience
in IMC
Rapid ProblemResponse
Rapid ProblemResponse
ConcentratedAttention
ConcentratedAttention
IncreasedFlexibilityIncreasedFlexibilityIncreasedFlexibilityIncreasedFlexibility
Rapid ProblemResponse
Rapid ProblemResponse
ConcentratedAttention
ConcentratedAttention
Pros & Cons of Decentralization
TheDecentralized
System
TheDecentralized
System
+ Positive+ Positive - Negative- Negative
Lack ofAuthorityLack of
Authority
Roles of an Advertising Manager
Advertising Functions
• Making the ad strategy in collaboration
• Evaluation of the ad
• Determining the ad efforts
• Coordinating with the agency
• New developments in advertising
• Making the ad budget.
Managerial functions
• Making advertising understandable
• Representing the organization
• Goal setting for advertising
• Administration in general
• Creative thinking wrt his functions
• Participation with higher ups about his function
Classification of Agencies on the basis of Extent of their
Services
• Full service Agencies
• Limited Service Agencies
(A La Carte Agency)
• Specialized Agencies
On the basis of Services
Creating advertisingCreating
advertising
Planning advertisingPlanning
advertising
Producing advertisingProducing advertising
Performing research
Performing research
Selecting mediaSelecting media
Sales promotion and training
Sales promotion and training
Strategic market planning
Strategic market planning
Trade show materials
Trade show materials
Package designPackage design
Planning advertisingPlanning
advertising
Creating advertisingCreating
advertising
Producing advertisingProducing advertising
Performing research
Performing research
Selecting mediaSelecting media
Strategic market planning
Strategic market planning
Sales promotion and training
Sales promotion and training
Trade show materials
Trade show materials
Package designPackage design
Full-Services Agencies
Full Range of Marketing
Communication and Promotion
Services
Full Range of Marketing
Communication and Promotion
Services
Non-Advertising Services
Non-Advertising Services
Public relations and publicity
Public relations and publicity
John Monsattal’s reasons for FSA
• Sales oriented creative work• Synergistic experience• Centralization of responsibility &
accountability• Greater objectivity• Simplified coordination & administration• Professional strength in marketing area• Stronger pool of talents.
Advantages• In-depth knowledge
and skills• Obtaining
negotiating muscle with the media
• Coordinating advertising and marketing efforts
Full-service advertising agency
Disadvantages• Some control is lost• Larger clients are
favored over small clients
• Occasionally inefficient in media buying
Limited Service Agencies
ArtistsArtists
Ad Agencies Have Skilled Specialists
WritersWriters ResearchersResearchers
PhotographersPhotographers Media AnalystsMedia Analysts Other SkillsOther Skills
The Role of Creative Boutiques
CreativeBoutiquesCreative
Boutiques Provide Only Creative ServicesProvide Only Creative Services
Full-Service Agencies May Subcontract With Creative
Boutiques
Full-Service Agencies May Subcontract With Creative
Boutiques
Provide Only Creative ServicesProvide Only Creative Services
Full-Service Agencies May Subcontract With Creative
Boutiques
Full-Service Agencies May Subcontract With Creative
Boutiques
Other Functions Provided by the Internal Client Departments
Other Functions Provided by the Internal Client Departments
Specialize in Buying Media, Especially Broadcast Time
Specialize in Buying Media, Especially Broadcast Time
Agencies and Clients Develop Media Strategy
Agencies and Clients Develop Media Strategy
Agencies and Clients Develop Media Strategy
Agencies and Clients Develop Media Strategy
Specialize in Buying Media, Especially Broadcast Time
Specialize in Buying Media, Especially Broadcast Time
Media Buying Can Be Specialized
Media Buying
Services
Media Buying
Services
Media Buying Organizations Implement the Strategy and
Buy Time and Space
Media Buying Organizations Implement the Strategy and
Buy Time and Space
DirectMail
DirectMail
Data BaseManagementData Base
Management
ResearchResearch
CreativeCreative
Media ServicesMedia Services
CreativeCreative
Media ServicesMedia Services
ResearchResearch
DirectMail
DirectMail
Data BaseManagementData Base
Management
Direct Response Agency Activities
DirectResponseAgencies
DirectResponseAgencies
ProductionProduction
Contest/Sweepstakes Development
Contest/Sweepstakes Development
Contest/Sweepstakes Development
Contest/Sweepstakes Development
Promotion PlanningPromotion Planning
Creative WorkCreative Work
ResearchResearch
Coordination With Advertising
Coordination With Advertising
Premium DesignPremium DesignPremium DesignPremium Design
Coordination With Advertising
Coordination With Advertising
Research Research
Creative WorkCreative Work
Promotion PlanningPromotion Planning
Data Base MarketingData Base Marketing
Activities performed by Sales Promotion Agencies
AudioAudio
Special EffectsSpecial Effects
VideoVideo
WebBanner Ads
WebBanner Ads
KiosksKiosks
Web SitesWeb Sites
CD-ROMsCD-ROMs
Special EffectsSpecial Effects
VideoVideoAudioAudio
KiosksKiosksCD-ROMsCD-ROMs
Web SitesWeb SitesWebBanner Ads
WebBanner Ads
Functions performed by Interactive Agencies
Interactive Media Creation
Interactive Media Creation
DigitalContentDigital
Content
AnimationAnimation
Planning and Implementing
Research
Planning and Implementing
Research
Planning and Implementing
Research
Planning and Implementing
Research
Information ApplicationInformation Application
Analysis and InterpretationAnalysis and Interpretation
Primary Data Collection
Qualitative & Quantitative
Primary Data Collection
Qualitative & Quantitative
Secondary Data Collection
Secondary Data Collection
Primary Data Collection
Qualitative & Quantitative
Primary Data Collection
Qualitative & Quantitative
Analysis and InterpretationAnalysis and Interpretation
Information ApplicationInformation Application
Marketing Research Companies
StrategyDevelopment
GeneratingPublicity
Lobbying
PublicAffairs
DamageControl
ImagePortrayal
StrategyDevelopment
GeneratingPublicity
Lobbying
PublicAffairs
DamageControl
ImagePortrayal
Functions performed by Public Relations Firms
ProgramPlanning
Participants in the IMC Process
Full service & Limited Service Ad Agencies
Full service & Limited Service Ad Agencies
Media OrganizationsMedia Organizations
Advertiser (Client)Advertiser (Client)
Advertising AgencyAdvertising Agency
Collateral ServicesCollateral Services
Direct Response Agencies
Direct Response Agencies
Sales Promotion Agencies
Sales Promotion Agencies
Interactive Agencies
Interactive Agencies
Public Relations
Firms
Public Relations
Firms
Collateral Services offered by an advertising agency
• Meta markets
• They include marketing research companies, package design firms, consultants, photographers, printers, video production houses, event marketing services companies
In House Agencies
• An organization may decide to establish its own operation for all services of an advertising agency with in its own structure.
• As the name suggests the agency is owned & operated under the direct supervision of the advertiser.
MoreControlMore
Control
CostSavings
CostSavings
BetterCoordination
BetterCoordination
LessObjectivity
LessObjectivity
LessExperience
LessExperience
LessObjectivity
LessObjectivity
LessExperience
LessExperience
BetterCoordination
BetterCoordination
MoreControlMore
Control
CostSavings
CostSavings
Pros & Cons of In-House Agencies
TheIn-houseAgency
TheIn-houseAgency
+ Positive+ Positive - Negative- Negative
LessFlexibility
LessFlexibility
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)
CommissionsMethod
CommissionsMethod
Cost-PlusAgreementsCost-Plus
Agreements
PercentageCharges
PercentageCharges
FeeArrangements
FeeArrangements
Incentive-BasedPayment
Incentive-BasedPayment
CommissionsMethod
CommissionsMethod
Cost-PlusAgreementsCost-Plus
Agreements
PercentageCharges
PercentageCharges
FeeArrangements
FeeArrangements
Methods of Agency Compensation
CompensationMethods
CompensationMethods
Media Commission Mark up/Percentage charge
• Oldest method• Fixed % from the
media whenever it is booking advertising space in print or a slot in electronic media on behalf of its client.
• Administrative charges are calculated,
• Fix % of total amount & expenses is billed to the client.
Fees Incentive based
compensation• Straight fees or Fixed Fees method
( the media commissions earned are returned to the advertisers or are credited against the fees)
• Fee Commission method (fixed monthly fees is charged by the agency & commissions earned from media too are retained)
• Performance based compensation
• Commission + fee system combination
• Amount= effectiveness of the ad campaign
• Advertising goals (DAGMAR) & other factors.
• Reward or Penalize ( by paying only part of the decided fees)
Poorperformance
Unrealisticdemands
Personalityconflicts
Personnelchanges
Conflict ofinterests
Changesin strategy
Decliningsales
Paymentconflicts
Policychanges
Poorperformance
Poorcommunications
Unrealisticdemands
Personalityconflicts
Personnelchanges
Conflict ofinterests
Changesin strategy
Decliningsales
Paymentconflicts
Why Agencies Lose Clients
ReferralsReferrals
How Agencies Gain Clients
SolicitationsSolicitations
PresentationsPresentations
Public RelationsPublic Relations Image, ReputationImage, Reputation
Group Assignment
• Detailed history of any agency of your choice.
• Story
• Man power behind its success
• Their list of clients ( at least 8)
• Their work/ ads
Next Class
• Types of advertisements
• Appeals used in ads
• Articles & research papers related to the same from Journals
• Advertising budget
• Planning the advertising media