Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communications

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Organizing for Advertising and PromotionThe
Role of Ad Agencies and Other Marketing
Communications Organizations
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Participants in the IMC Process
Advertiser (Client)
Advertising agency
Direct-response agencies
Sales promotion agencies
Media organizations
Marketing communications specialist organizations
Interactive agencies
Public relations firms
Collateral services
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Advertising Department UnderCentralized System
President
Production
Finance
Marketing
Research and develop-ment
Human resources
Advertising
Marketing research
Sales
Product planning
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Pros Cons of Centralization
Positive
- Negative
Less goal involvement
Better communications
The Centralized System
Fewer personnel
Longer response time
Continuityof staff
More top management involvement
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Decentralized Brand Management System
Corporate
Research
Human
Production
Finance
Marketing
and
resources
development
Product
Marketing
Sales
management
services
Brand
Brand
manager
manager
Advertising
Marketing
department
research
Ad agency
Ad agency
Sales
Package
promotion
design
Merchandising
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Pros Cons of Decentralization
Positive
- Negative
Ineffective decision making
Concentrated attention
Internal conflicts
The Decentralized System
Rapid problem response
Misallocation of funds
Increased flexibility
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Test Your Knowledge
A major reason why some companies choose to use
an in-house agency is to A) maintain creative
freshness B) reduce advertising and promotions
costs C) better understand how advertising
works D) win advertising awards that will
enhance the image of their brands E) do all
of the above
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Pros Cons of In-House Agencies
Positive
- Negative
Less experience
Cost savings
The In-house Agency
Less objectivity
More control
Better coordination
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Benettons In-House Agency Works With Outside
Agencies to Develop Ads
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Ad Agencies Have Skilled Specialists
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Crispin PorterBogusky Found Creative Ways to
Advertise the Mini
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Full-Services Agencies
Planning advertising
Full range of marketing communication and
promotion services
Performing research
Creating advertising
Selecting media
Producing advertising
Interactive capabilities
Strategic market planning
Nonadvertising services
Sales promotions
Package design
Direct marketing
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Typical Full-Service Agency Organization
Board of
directors
President
VP creative
VP account
VP marketing
VP management
services
services
services
and finance
Sales
Writers
TV
Print
Account
Media
Research
promotion
Art directors
production
production
supervision
Traffic
Account
executive
Office
Finance
management
Accounting
Personnel
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Services Provided by Agencies
Agency Services
Marketing Services
Account Service
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The Role of Creative Boutiques
CreativeBoutiques
Provide only creative services
Full-service agencies may subcontract with
creative boutiques
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Media Buying Can Be Specialized
Media Specialist Companies
Specialize in buying media, especially broadcast
time
Agencies and clients develop media strategy
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Methods of Agency Compensation
Commissions from media
Compensation Methods
Fee, cost, and incentive-based systems
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Young Rubicam has handled Dr Pepper for over
30 years
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Foote, Cone Belding was the agency for Levis
for 68 years
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Why Agencies Lose Clients
Personnel changes
Changes in strategy
Poor performance
Poor communications
Declining sales
Unrealistic demands
Changes in size
Payment conflicts
Personality conflicts
Conflict of interests
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The US Army Changed Advertising Agencies and
Campaigns
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How Agencies Gain Clients
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A Change in Strategy Led to a Change in Gateways
Advertising and Agency
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Direct-Marketing Agency Activities
Media services
Database management
Direct-Marketing Agencies
Creative
Direct mail
Research
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Activities Performed by Sales Promotion Agencies
Promotional planning
Creative work and research
Tie-in coordination
Fulfillment
Premium design and manufacturing
Catalog production
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Functions Performed by Public Relations Firms
Damage control
Generating publicity
Strategy development
Image portrayal
Lobbying
Public affairs
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Functions Performed by Interactive Agencies
Web banner ads
CD-ROMs
Interactive Media Creation
Web sites
Text messages
Search engine optimization
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Marketing Research Companies
Planning and implementing research
Information application
Analysis and interpretation
Primary data collection qualitative quantitative
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Pros Cons of Integrated Services
Positive
- Negative
Budget politics
Greater synergy
Integrated Services
Poor communication
Convenience
Single image for product or service