advertising management

Advertising MANAGEMENT

Lecture 9

AGENCY – CLIENT RELATIONSHIP

Prof Soumitra Mookherjee

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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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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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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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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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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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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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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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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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• 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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• 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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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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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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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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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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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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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'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 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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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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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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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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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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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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