Role & Functions of

Advertising
Agencies

The critical objective and role

of any ad agency is gaining
business.

new

structure & organization

what agencies do.
and how theyre organized
to 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

Boardof
Directors
[Chairman/CEO]
President
[COO]
OtherMarketing
Communications
Services
[PR,etc.]
AccountMgmt.
Director

Strategy
ReviewBoard
[Managment
Committee]

OfficeManagement
[Personnel,
Accounting,
Legal,etc.]

Creative
ExecCD

Research
Director

MediaDept.
Director

Management
Supervisor

Associate
Creative
Director

Project
Managers

Associate
Media
Director

Account
Executive

Creative
Group:

Research
Assistants

Media
Supervisor

Asst.Account
Executive

CopySpvr.&
Copywriters

Broadcast
Production

Traffic

ArtSupervisor
&ArtDirectors

Print
Production

Media
Planner

Media
Buyer

Analysts

account management
liaison between agency and client
responsible for understanding...
the clients business
the clients marketing needs
strategy development

representing client point of view

within the agency

account management
AccountMgmt.
Director
Management.
Supervisor
Account
Supervisor
Account
Executive
Asst.Account
Executive

Account
Coordinator
Traffic

account management director

management supervisor
account supervisors
account executives
assistant account execs
account coordinators
traffic

creative department
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 relayed

creative department
Strategy
Review
Board
Executive
Creative
Director(ECD)
Creative
Director(CD)
Associate
Creative
Director(ACD)
Creative
Group:
CopySpvr.&
Copywriters

ArtSupervisor
&ArtDirectors

Broadcast
Production
Traffic

Print
Production

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 department
Media
Director
Associate
Media
Director
Media
Supervisor
Media
Planner

Media
Buyer

Analysts

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

Media
Plan

big changes in the

media 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

Research
Report

research department
Research
Director
Project
Managers

research director
research project managers
research assistants
outside research
specialists

Research
Assistants
Outside
Research
Suppliers

Research
Report

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?