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Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communication Organizations
McGraw-Hill/Irwin Copyright 2012 McGraw-Hill Companies, Inc., All right reversed

Participants in the IMC Process

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The Ad Agencys Role Reasons for using an ad agency

Highly skilled specialists (Careful!!!!! skill vs # of years) Specialization in a particular industry Objective viewpoint of the market Broad range of experience

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Organizing for Advertising & Promotions 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

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Advertising Dept. Under a Centralized System

President

Production

Finance

Marketing

Research and development

Human resources

Marketing research

Advertising

Sales

Product planning

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Decentralized Advertising System

Corporate Production Finance Marketing R&D Human Resources

Sales

Product Management
Brand Manager Ad agency Brand Manager

Marketing services
Advertising Dept Marketing Research

Sales promotion Package design

Ad agency

Merchandising
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Pros & Cons of In-house Agencies

Pros Cost savings More control Increased coordination Stability Access to top management
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Cons Less experience

Less objectivity
Less flexibility

Less access to top creative talent

Full-Service Agencies
Full range of marketing communication and promotion services
Planning advertising Creating advertising Producing advertising Strategic market planning Performing research Selecting media

Negotiate and buy

Interactive capabilities Package design

Nonadvertising services

Sales promotions
Direct marketing

Public relations and publicity

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Full-Service Agency Organization Chart

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Agency Services

Account Services The link between agency and client Managed by the account executive

Marketing Services Research department

Creative Services Creation, execution of ads Copywriter artists, other specialists

Mgmt & Finance Accounting Finance Human resources New business generation

May include account planners

Media dept. obtains media space, time

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Creative Boutiques

Creative Boutiques

Provide only creative services

May subcontract from full-service agencies

Strength is turning out creative work quickly

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 Boutique Agency Limited, Specialty services Hire vendor firms who specialize in

Research, Music, Special Photography Song writing, Aerial Photography Dance choreography, Computer Graphics Animation, In store displays (P.O.P)
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Media Buying

Media Specialist Companies

Specialize in buying media, especially broadcast time

Agencies and clients develop media strategy Media buying organizations implement strategies, and buy time and space
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Agency Compensation Methods

Commissions from media

Fee, cost, and incentive-based systems Percentage charges

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Evaluating Agencies
Financial Audit Verify costs, expenses Personnel hours billed Payments to media Payments to suppliers Qualitative Audit Planning Program development Implementation Results achieved

Who will actually work on your account?

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How Agencies Gain Clients

Referrals

Presentations

Solicitations

Public Relations

Image, Reputation
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Sales Promotion Agencies

Promotional planning
Creative research Tie-in coordination

Fulfillment
Premium design and manufacturing Catalog production Contest/sweepstakes management
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Functions Performed by Public Relations Firms

Strategy development Generating publicity

Public affairs News releases, communication

Special events Managing crisis Coordination w/promotional areas

Lobbying

Research

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Responsibility for IMC: Agency vs. Client Key Obstacles

Lack of people with a broad perspective and the skills to make it work Internal turf battles Agency egos Fear of budget reductions Ensuring consistent execution Measuring success Compensation
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