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Advertising MANAGEMENT

Lecture 9

AGENCY – CLIENT RELATIONSHIP

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 ADVERTISING Agency: Basic Concept

An advertising agency is a service business dedicated to creating,

planning and handling advertising and other promotional activities
for its clients.

An ad agency is independent from the client and provides an

outside point of view to the effort of selling the client's products or
services.

An agency can also handle overall marketing, communication,

sales promotions oriented and branding strategies for its clients.

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 ADVERTISING Agency: Basic Concept

Typical advertising agency clients include the following clientele:

1. Businesses and Corporations

2. Government Agencies
3. Non Profit Organizations

Agencies may be hired to produce a complete overall

advertising campaign and promotional activities to build
awareness and fulfill advertising goals and objectives

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 TYPES OF ADVERTISING COMPANIES

Advertising agencies come in all sizes as stated below:

1. one or two-person shops (which rely mostly on freelance talent

to perform most functions)

2. Small to medium sized agencies

3. large independents and multi-national, multi-agency

conglomerates like O &M and Satchi and Satchi

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 TYPES OF ADVERTISING COMPANIES

Limited-Service Advertising Agencies

Some agencies usually offer only one or two of the basic services.
For example, although some agencies that specialize in "creative"
also offer strategic advertising planning service.

Similarly, some "media-buying services" offer media planning

service but concentrate on media buying, placement, and billing.

Thus, the advertiser who uses limited-service agencies usually

gives greater strategic direction to specialist creative or media
agencies, and exercises greater control over the product of these
agencies.

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 TYPES OF ADVERTISING COMPANIES
Specialist Advertising Agencies

There are agencies that specialize in particular kinds of advertising:

recruitment, classified, industrial, financial, direct-response,
retail, yellow pages, theatrical/entertainment, investment, etc

Specialization occurs for a variety of reasons. Often, as in

recruitment advertising, specialized media are involved that require
knowledge / expertise not ordinarily found in general-line agency.

In industrial advertising, the subject is technical and requires that

writers and artists have training in order to write meaningful
advertising messages about it.

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 TYPES OF ADVERTISING COMPANIES

Branded Content Agencies

Branded content agencies don’t produce advertising in the

‘traditional’ sense. Rather, they aim to incorporate their client’s
brands into popular culture — e.g. creating a TV commercial for
the brand or developing a rich message content of the brand or
designing an event people want to attend.

The idea is to make brands synonymous with an enjoyable

experience, thereby making them better known and recognized
in consumers’ minds.

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 TYPES OF ADVERTISING COMPANIES

Interactive agencies
Interactive agencies may differentiate themselves by offering a mix
of web development, search engine marketing, internet
advertising/marketing, or e-commerce consulting.

Interactive agencies rose to prominence offering a wide range of

services. Today, the most successful interactive agencies are defined
as companies that provide specialized advertising and marketing
services for the digital space.

The recent boost in the interactive agencies can also be attributed to

the rising popularity of web-based social networking sites like
MySpace, Facebook and YouTube

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 TYPES OF ADVERTISING COMPANIES

Digital Agencies
Most digital (or online) agencies are structured and work in much
the same way as offline agencies.

There are some agencies that work mainly on media planning and
buying, some work solely on the creative side, and others will be
full service incorporating all of the above.

However what binds them is that their specialty will lie across all
mediums of digital communication, including banners, viral
emails, games, Interactive TV, mobile and email marketing.

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 TYPES OF ADVERTISING COMPANIES

Direct Marketing Agencies

A direct marketing agency typically provides strategic / creative

solutions to a client's business objectives by using ‘direct’
marketing channels that are measurable in terms of the responses
created

Direct channels include the likes of direct response TV and radio,

direct mail, inserts, door-drops and online advertising.

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 TYPES OF ADVERTISING COMPANIES

Outdoor (Out of Home) Agencies

Outdoor agencies are specialists in ‘out-of-home’ media, such as

posters in all their various forms.

They provide objective planning, buying and related technical

support for advertisers and their agencies to promote better
understanding and more effective use of OOH media.

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 ADVERTISING AGENCY: ORGANIZATION
STRUCTURE
• An advertising agency has a very different structure from that of
a regular organization. On a general front, an advertising agency
consists of the following departments:

• The account management department.

• The account planning (strategy) department.
• The internal services department (inclusive of the traffic
department, the creative department, the print production
cell
• The human resources department
• The finance and administrative department
• The media-planning department.

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 ADVERTISING AGENCY: ORGANIZATION
STRUCTURE

• President / CEO -- The guy at the top who usually ensures that
the client planning and creative are of good quality.

• Account Management -- These are the people who assist clients

plan their marketing, help determine budgets, set schedules.

• Business Development Team: Procuring business through

innovative sales strategies and enhancing business prospects

• Media Buyers – Supervise client budget and determines the

most cost effective media
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 ADVERTISING AGENCY: ORGANIZATION
STRUCTURE
• Creatives and Design -- Business consisting of copywriters and
art directors.

• Traffic / Production Management – Team who make sure

work is being done on time and on budget.

• Support -- Typically financial, administrative and other

functions.

• Advertising Interns: Comprise university students who are

interested in advertising. Internships commonly fall into one of
six areas of expertise: Research & Analysis, Account services,
interactive, media planning, public relations and traffic
control
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 Agency departments: OVERVIEW

Creative department
The people who create the actual advertisements form the core of
an advertising agency. Modern advertising agencies usually form
their copywriting and art direction into creative teams.

Creative teams may be permanent partnerships or formed on a

project-by-project basis.

Creative departments frequently work with outside design or

production studios to develop and implement their ideas.

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 Agency departments: OVERVIEW
Account services

Agencies appoint account executives to interact and liaison with the

clients. The account executives need to be sufficiently aware of
the client’s needs, aspirations, motives and desires that can be
instructed to the agency’s personnel.

The account manager will develop a creative brief, usually about

a page that gives direction to the creative team. The creative
brief often includes information about the target audience and their
attitudes and behaviors.

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 Agency departments: OVERVIEW

Media services

The media services department may not be so well known, but its
employees are the people who have contacts with the suppliers of
various creative media.

However, when dealing with the major media (broadcast media,

outdoor, and the print media), this work is usually outsourced to
a media agency which can advise on media planning and is
normally large enough to negotiate prices down further.

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 Agency departments: OVERVIEW
Production

Very critical Role – as without the production department, the

ads created by the copywriter and art director would imply
nothing

The production department ensures that the TV commercial or print

ad, etc., gets produced. They are responsible for contracting
external vendors (directors and production companies in the case of
TV commercials; photographers and design studios in the case of
the print advertising or direct mailers).

Producers are involved in every aspect of a project, from the

initial creative briefing through execution and delivery.
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 Agency departments: OVERVIEW
Traffic Management
An integral department within an advertising agency is traffic. The
traffic department regulates the flow of work in the agency.

It is typically headed by a traffic manager (or system

administrator). Critical Functions include prioritization of clients,
activity sequencing, increasing an agency's efficiency and
profitability through reduction of false job starts,
inappropriate job initiation.

In small agencies without a dedicated traffic manager, one

employee may be responsible for managing workflow, gathering
cost estimates and answering the phone, and much more

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 Agency SELECTION: MAIN CRITERIA

Full service agency or part- time agency

The full-service agency is involved completely in the advertising
functions. It has a large number of expert employees.
The part-time agency offers service on free of cost or project basis.
These agencies perform various outside activities and co-ordinate
the activities of the advertiser and media personnel

Compatibility
Selection of an advertising agency depends on the compatibility of
the agency. The needs of the company determine the fitness of the
agency on the basis of its merits, demerits, accreditation, etc

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 Agency SELECTION: Main Criteria

Agency Team
This includes market researchers, copywriters, media experts,
production managers and art directors. The attitude, thinking,
experience and personalities of the team members have positive
effects on the selection process.

Agency Stability
An agency, which has been long in existence generally, performs
efficiently and effectively. The personnel, finance, experience,
Brand recognition, management and credit are examined
before selecting a suitable advertising agency.

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 Agency SELECTION: Main Criteria

Services
The services rendered by the agency are evaluated with a view to
choosing the best advertising agency.

Cost accounting, general agreements, project estimates, selling

attitudes and other services performed by the advertising agencies
are considered to evaluate their efficiency and credibility.

The greater the range of an agency’s services, the more complete it

can serve the clients’ needs. The agency can serve the clients by its
capacity for advertising, sales promotion, media placement,
public relations, market research, etc

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 Agency SELECTION: Main Criteria

Creativity
Creativity is the main element in advertising. If the advertising
agency is capable of great creative efforts, it is selected for the
purpose. Artwork, Design, Style, clarity, impact, memorability
and action- these are considered while evaluating creativity.

Problem-solving approach
The agency which has a problem solving approach is considered
to be superior and useful. Compatibility, balanced services,
responsiveness, -these are important factors in selecting an
advertising agency.

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 Agency SELECTION: Main Criteria

Agency's motivation to take your business to the next level :

A client's business success is important. The value based
advertising philosophy i.e. one that is based on becoming
recognized for creating increased sales, profitability and
ultimately shareholder value for your business.

Agency capability of integrating traditional and new media?

Integrated, media-neutral marketing is concerned with a

holistic, solutions-based approach that consistently delivers results
on an ongoing basis. We need an agency which spans these media
arenas

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 Agency SELECTION: Main Criteria

Agency Ability to differentiate your business?

Is agency capable of producing big ideas and delivering results?

Do they possess the insight into the core essence of your brand?

Can they produce a proposition that your target audience will

find irresistible?

Can they position your business effectively and create ‘market

space' for your brand to fulfilL its potential.

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 Agency SELECTION: PROCESS
FLOWCHART

Develop a list of agencies to evaluate. The best source in compiling

this list is referrals from colleagues, Yellow Pages, Internet, etc

Conduct your initial research: Use the internet to check out the
agencies on your initial list and eliminate any obvious poor fits.
Some agencies focus on specific industry niches, some have a
broader focus but are clearly more B2B or B2C oriented.

Develop your request for proposal (RFP). This step in actually

somewhat controversial, as there are “experts” out there who will
tell you not to use an RFP, but rather to utilize a request for
information (RFI)

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 Agency SELECTION: PROCESS
FLOWCHART
Call On each agency on your list: Introduce yourself and your
company, and tell them you’d like to include them in your RFP
process.

Send out the RFPs: Only to the agencies who have agreed to
participate. Make yourself available to answer their (inevitable)
questions. If you invite them to give a presentation; get agreement
from your internal selection team (specifically those with expense
approval authority)

Evaluate the RFP responses: Eliminate those agencies which are

less than an excellent fit for your needs, in order to get down to your
short list of finalists (at least two, but certainly no more than five).

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 Agency SELECTION: PROCESS
FLOWCHART

Arrange for presentations from each of your finalist agencies.:

Series of presentations may be necessary to eliminate an agency
from consideration. At this step your evaluation team will have the
opportunity to share with the agency more information about your
sector, your company, your challenges and goals. Each agency
has the opportunity to tell you more about their capabilities,
approach and practices.

Finally, making the final selection: Your internal selection team

should agree to discuss the merits of the competing agencies as peers
in a freewheeling discussion.

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 Client Agency RELATIONSHIP

The agency commitments: What you expect from your agency.

1. Commitment to the success of your business. The best

agency people are 100 percent committed to the same goal. Their
commitment is evidenced by their time, enthusiasm, work, etc

2. Knowledge of your business. Agency people, particularly the

account group, cannot solve your advertising problems unless they
have understood and evaluated the market in which you compete.
Assess how keen they are in understanding the essence and details
of your business and communication strategy objectives.

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 Client Agency RELATIONSHIP

3. Open-mindedness. Good agency people are committed to the

importance of a good idea, no matter what its source. Non
Cooperative and opinionated attitude, fixed ideas, etc has no
place in a collaborative relationship.

4. Honesty.: Open, Frank, Transparency, Delivery, Billing, etc

5. Leadership from your account people. Account people are

your primary contact and your source of communication within the
agency.

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 Client Agency RELATIONSHIP

Why Clients Terminate Agency Relationships

• High Employee Attrition/Turnover – New marketing director

• Lack of interest/understanding of client’s business
• Delivery unsatisfactory and below client expectations
• Time and cost overruns
• Poor quality work due to technical and manpower skill
deficiency
• Ineffective media planning
• Non responsive to client’s queries

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 Client Agency RELATIONSHIP

Why Clients Terminate Agency Relationships (Cont’d)

• Understaffing and inexperienced personnel

• Strategy and creative linkage unhinged
• “Outgrown” the agency
• Research scores consistently below norms
• Creative arrogance
• Mandated consolidation
• Loose attention to budgets

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