Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communication Organizations
Participants in the Integrated Marketing Communications Process
Organizing for Advertising and Promotion in the Firm
The Centralized System
In-house agency
An in-house
agency is an advertising agency that is set up, owned, and
operated by the advertiser. Some in house agencies are little more than
advertising departments, but in other companies they are given a separate
identity and are responsible for the expenditure of largesSums of advertising dollars.
Decentralized system
Role of Ad-agency
The main reason outside agencies are used is
that they provide the client with the services of highly skilled individuals
who are specialists in their chosen fields. Many agencies specialize in a
particular type of business and use their knowledge of the industry to assist
their clients. An outside agency can also provide an objective
viewpoint of the market and its business that is not subject to internal
company policies, biases, or other limitations. The agency can draw on the broad
range of experience it has gained while working on a diverse set of marketing
problems for various clients.
Types of Ad agencies
Full-Service Agencies
Full-Service Agencies offer their
clients a full range of marketing, communication, and promotional services
including planning, creating, and producing the advertising; performing research; and selecting media. A full-service
agency may also offer non advertising services such as strategic market
planning; sales promotions, direct marketing, and interactive capabilities;
package design; and public relations and publicity.
Account Services
Account services, or account management is the link between the ad agency and its clients. Depending on the size of the client and its advertising budget, one or more account executives serve as liaison. The account executive is responsible for understanding the advertiser’s marketing and promotions needs and interpreting them to agency personnel. He or she coordinates agency efforts in planning, creating, and producing ads. The account executive also presents agency
recommendations and obtains client approval.
Marketing Services
Most full-service agencies maintain a research
department whose function is to gather,
analyse, and interpret information that will be useful in developing
advertising for their clients. This can be done through primary research—where
a study is designed, executed, and
interpreted by the research department—or through the use of secondary
(previously published) sources of information. The research department may also
design and conduct research to pre- test the effectiveness of advertising the
agency is considering. The media department of an agency analyses, selects,
and contracts for space or time in
the media that will be used to deliver the client’s advertising message. The
media department is expected to develop
a media plan that will reach the target market and effectively communicate the
message
Creative Services
The creative services department is
responsible for the creation and execution of advertisements. The individuals
who conceive the ideas for the ads and write the headlines, subheads, and body
copy (the words constituting the message) are known as copywriters. They may
also be involved in determining the basic appeal or theme of the ad campaign
and often prepare a rough initial visual layout of the print ad or television
commercial. The research department may also design and conduct research to pre
-test the effectiveness of advertising the agency is considering.
Creative Boutiques
A creative boutique is an agency that provides
only creative services. These specialized companies
have developed in response to some clients’ desires to use only the creative
talent of an outside provider while maintaining the other functions internally.
The client may seek outside creative talent because it believes an extra
creative effort is required or because its own employees do not have sufficient skills in this regard.
Media Buying Services
Media buying services are independent companies that specialize in the buying of media, particularly radio and television time. The task of purchasing advertising media has grown more complex as specialized media proliferate, so media buying services have found a niche by specializing in the analysis and purchase of advertising time and space. Agencies and clients usually develop their own media strategies and hire the buying service to execute them. Some media buying services do help advertisers plan their media strategies
Evaluating agencies
The agency evaluation process usually involves
two types of assessments- one financial and operational, and the other more
qualitative. The financial audit focuses on how the agency conducts its
business. It is designed to verify costs and expenses, the number of personnel
hours charged to an account, and payments to media and outside suppliers. The qualitative audit focuses on the
agency’s efforts in planning, developing, and implementing the client’s
advertising programs and considers the results achieved.
Why Agencies Gain or Lose Clients
Agencies generally
gain clients by networking, through referrals, solicitations, presentations,
public relations, image and reputation, etc.
Agencies may lose
clients due to number of reasons ,few of the prominent ones being, poor
performance or service, poor communication, unrealistic demands by the client,
personality conflicts, personnel changes, changes in size of the client or
agency, conflicts of interest, changes in the client’s corporate and/or
marketing strategy, declining sales, conflicting compensation philosophies, changes
in policies, etc.
Special services
Direct-Response
Agencies
Direct-response agencies provide a variety of
services, including database management, direct mail, research, media services,
and creative and production capabilities. While direct mail is their primary
weapon, many direct-response agencies are expanding their services to include
such areas as infomercial production and database management Database
development and management is becoming one of the most important services
provided by direct-response agencies.
Sales Promotion
Agencies
Developing and managing sales promotion
programs such as contests, sweepstakes, refunds and rebates, premium and
incentive offers, and sampling programs is a very complex task. Most companies use a sales promotion agency
to develop and administer these programs. Sales promotion agencies often work
in conjunction with the client’s
advertising and/or direct-response agencies to coordinate their efforts with
the advertising and direct-marketing programs.
Public Relations
Firms
Public relations firm develops and implements programs to manage the
organization’s publicity,
image, and affairs with consumers and other relevant publics, including
employees, suppliers, stockholders, government, labour groups, citizen action
groups, and the general public. The PR firm
analyses the relationships between the client and these various publics, determines
how the client’s policies and actions relate to and affect these publics, develops PR strategies and programs,
implement these programs using various public relations tools, and evaluates
their effectiveness
Interactive
Agencies
These specialize in the development and
strategic use of various interactive marketing tools
such as websites for the Internet, banner ads, CD-ROMs, and kiosks. They
recognize that the development of successful interactive marketing programs
requires expertise in technology as well as areas such as creative website design,
database marketing, digital media, and customer relationship management.
Pros and Cons of Integrated Services
Proponents of integrated marketing services
contend that past problems are being solved, and the various individuals in the
agencies and subsidiaries are learning to work together to deliver a consistent
message to the client’s customers. Maintaining control of the entire
promotional process achieves greater synergy among each of the communications
program elements. It is more convenient for the client to coordinate all of its
marketing efforts—media advertising, direct-mail, special events, sales
promotions, and public relations—through one agency. An agency with integrated
marketing capabilities can create a single image for the product or service and
address everyone, from wholesalers to consumers, with one voice. Opponents say
the providers become involved in political wrangling over budgets, do not communicate
with each other as well and as often as they should, and do not achieve
synergy. They also claim that agencies’ efforts to control all aspects of the
promotional program are nothing more than an attempt to hold on to business
that might otherwise be lost to independent providers. Synergy and economies of
scale, while nice in theory, have been difficult to achieve and competition and
conflict among agency subsidiaries have been a major problem.
In-house agency
An in-house
agency is an advertising agency that is set up, owned, and
operated by the advertiser. Some in house agencies are little more than
advertising departments, but in other companies they are given a separate
identity and are responsible for the expenditure of largesSums of advertising dollars.
Decentralized system
Role of Ad-agency
The main reason outside agencies are used is
that they provide the client with the services of highly skilled individuals
who are specialists in their chosen fields. Many agencies specialize in a
particular type of business and use their knowledge of the industry to assist
their clients. An outside agency can also provide an objective
viewpoint of the market and its business that is not subject to internal
company policies, biases, or other limitations. The agency can draw on the broad
range of experience it has gained while working on a diverse set of marketing
problems for various clients.
Types of Ad agencies
Full-Service Agencies
Full-Service Agencies offer their clients a full range of marketing, communication, and promotional services including planning, creating, and producing the advertising; performing research; and selecting media. A full-service agency may also offer non advertising services such as strategic market planning; sales promotions, direct marketing, and interactive capabilities; package design; and public relations and publicity.
Account Services
Account services, or account management is the link between the ad agency and its clients. Depending on the size of the client and its advertising budget, one or more account executives serve as liaison. The account executive is responsible for understanding the advertiser’s marketing and promotions needs and interpreting them to agency personnel. He or she coordinates agency efforts in planning, creating, and producing ads. The account executive also presents agency
recommendations and obtains client approval.
Marketing Services
Most full-service agencies maintain a research
department whose function is to gather,
analyse, and interpret information that will be useful in developing
advertising for their clients. This can be done through primary research—where
a study is designed, executed, and
interpreted by the research department—or through the use of secondary
(previously published) sources of information. The research department may also
design and conduct research to pre- test the effectiveness of advertising the
agency is considering. The media department of an agency analyses, selects,
and contracts for space or time in
the media that will be used to deliver the client’s advertising message. The
media department is expected to develop
a media plan that will reach the target market and effectively communicate the
message
Creative Services
The creative services department is
responsible for the creation and execution of advertisements. The individuals
who conceive the ideas for the ads and write the headlines, subheads, and body
copy (the words constituting the message) are known as copywriters. They may
also be involved in determining the basic appeal or theme of the ad campaign
and often prepare a rough initial visual layout of the print ad or television
commercial. The research department may also design and conduct research to pre
-test the effectiveness of advertising the agency is considering.
Creative Boutiques
A creative boutique is an agency that provides
only creative services. These specialized companies
have developed in response to some clients’ desires to use only the creative
talent of an outside provider while maintaining the other functions internally.
The client may seek outside creative talent because it believes an extra
creative effort is required or because its own employees do not have sufficient skills in this regard.
Media Buying Services
Media buying services are independent companies that specialize in the buying of media, particularly radio and television time. The task of purchasing advertising media has grown more complex as specialized media proliferate, so media buying services have found a niche by specializing in the analysis and purchase of advertising time and space. Agencies and clients usually develop their own media strategies and hire the buying service to execute them. Some media buying services do help advertisers plan their media strategies Evaluating agencies
The agency evaluation process usually involves two types of assessments- one financial and operational, and the other more qualitative. The financial audit focuses on how the agency conducts its business. It is designed to verify costs and expenses, the number of personnel hours charged to an account, and payments to media and outside suppliers. The qualitative audit focuses on the agency’s efforts in planning, developing, and implementing the client’s advertising programs and considers the results achieved.Why Agencies Gain or Lose Clients
Agencies generally
gain clients by networking, through referrals, solicitations, presentations,
public relations, image and reputation, etc.
Agencies may lose
clients due to number of reasons ,few of the prominent ones being, poor
performance or service, poor communication, unrealistic demands by the client,
personality conflicts, personnel changes, changes in size of the client or
agency, conflicts of interest, changes in the client’s corporate and/or
marketing strategy, declining sales, conflicting compensation philosophies, changes
in policies, etc.
Special services
Direct-Response
Agencies
Direct-response agencies provide a variety of
services, including database management, direct mail, research, media services,
and creative and production capabilities. While direct mail is their primary
weapon, many direct-response agencies are expanding their services to include
such areas as infomercial production and database management Database
development and management is becoming one of the most important services
provided by direct-response agencies.
Sales Promotion
Agencies
Developing and managing sales promotion
programs such as contests, sweepstakes, refunds and rebates, premium and
incentive offers, and sampling programs is a very complex task. Most companies use a sales promotion agency
to develop and administer these programs. Sales promotion agencies often work
in conjunction with the client’s
advertising and/or direct-response agencies to coordinate their efforts with
the advertising and direct-marketing programs.
Public Relations Firms
Public relations firm develops and implements programs to manage the
organization’s publicity,
image, and affairs with consumers and other relevant publics, including
employees, suppliers, stockholders, government, labour groups, citizen action
groups, and the general public. The PR firm
analyses the relationships between the client and these various publics, determines
how the client’s policies and actions relate to and affect these publics, develops PR strategies and programs,
implement these programs using various public relations tools, and evaluates
their effectiveness
Interactive Agencies
These specialize in the development and
strategic use of various interactive marketing tools
such as websites for the Internet, banner ads, CD-ROMs, and kiosks. They
recognize that the development of successful interactive marketing programs
requires expertise in technology as well as areas such as creative website design,
database marketing, digital media, and customer relationship management.
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