Organizing for Advertising

and Promotion:
The Role of Ad Agencies and Other
Marketing Communications
Organizations
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Participants in the IMC Process
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Marketing
Communications
Specialist
Organization
Media Organizations
Advertiser (Client)
Advertising Agency
Collateral Services
Direct
Response
Agencies
Sales
Promotion
Agencies
Interactive
Agencies
Public
Relations
Firms
Advertising Department Under
Centralized System
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
President
Production Finance Marketing
Research
and
Develop-
ment
Human
Resources
Advertising
Marketing
Research
Sales
Product
Planning
Fewer
Personnel
Better
Communications
Continuity
Of Staff
Longer
Response Time
Less Goal
Involvement
Better
Communications
Fewer
Personnel
Continuity
Of Staff
Less Goal
Involvement
Longer
Response Time
Pros & Cons of Centralization
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
The
Centralized
System
+ Positive - Negative
Cant Do
Multiple Product
Lines
Decentralized Brand Management System
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Production Finance
Sales
Brand
Manager
Ad agency
Brand
Manager
Ad agency
Product
Management
Sales
Promotion
Package
Design
Merchandising
Advertising
Department
Marketing
Research
Marketing
Services
Marketing Research
and
Development
Human
Resources
Corporate
Competition for
Resources
Competition for
Resources
Lack of
Experience
in IMC
Lack of
Experience
in IMC
Rapid Problem
Response
Concentrated
Attention
Increased
Flexibility
Increased
Flexibility
Rapid Problem
Response
Concentrated
Attention
Pros & Cons of Decentralization
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
The
Decentralized
System
+ Positive - Negative
Lack of
Authority
More
Control
Cost
Savings
Better
Coordination
Less
Objectivity
Less
Experience
Less
Objectivity
Less
Experience
Better
Coordination
More
Control
Cost
Savings
Pros & Cons of In-House Agencies
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
The
In-house
Agency
+ Positive - Negative
Less
Flexibility
Most No Fear advertising is done by their
in-house agency
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
+
Artists
Ad Agencies Have Skilled Specialists
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Writers Researchers
Photographers Media Analysts Other Skills
Creating
advertising
Planning
advertising
Producing
advertising
Performing
research
Selecting media
Sales promotion
and training
Strategic market
planning
Trade show
materials
Package design
Planning
advertising
Creating
advertising
Producing
advertising
Performing
research
Selecting media
Strategic market
planning
Sales promotion
and training
Trade show
materials
Package design
Full-Services Agencies
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Full Range of
Marketing
Communication
and Promotion
Services
Non-Advertising
Services
Public relations
and publicity
Typical Full-Service Agency Organization
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Writers
Art Directors
Traffic
TV
Produciton
Traffic
Print
Production
VP Creative
Services
Account
Executive
Account
Supervision
VP Account
Services
Media Research
Sales
Promotion
VP Marketing
Services
Personnel Accounting Finance
Office
Management
VP Management
and Finance
President
Board of
Directors
Services Provided by Agencies
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Agency Services
The link between
agency and client
Managed by the
Account Executive
Research
department may
design and execute
research programs
Media department
may analyze, select
and contract media
resources
Creation and
execution of ads
Copywriters,
artists, other
specialists
Marketing
Services
Account
Service
Creative
Services
Marketing
Services
Account
Service
The Role of Creative Boutiques
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Creative
Boutiques
Provide Only Creative Services
Full-Service Agencies May
Subcontract With Creative
Boutiques
Provide Only Creative Services
Full-Service Agencies May
Subcontract With Creative
Boutiques
Other Functions Provided by
the Internal Client Departments
Coca Colas in-house boutique
created this popular spot
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
+
Specialize in Buying Media,
Especially Broadcast Time
Agencies and Clients Develop
Media Strategy
Agencies and Clients Develop
Media Strategy
Specialize in Buying Media,
Especially Broadcast Time
Media Buying Can Be Specialized
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Media
Buying
Services
Media Buying Organizations
Implement the Strategy and
Buy Time and Space
Commissions
Method
Cost-Plus
Agreements
Percentage
Charges
Fee
Arrangements
Incentive-Based
Payment
Commissions
Method
Cost-Plus
Agreements
Percentage
Charges
Fee
Arrangements
Methods of Agency Compensation
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Compensation
Methods
Young & Rubicam has handled
Dr. Pepper for over 30 years
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
+
Foote, Cone & Belding was the agency
for Levis for 68 years
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
*Click outside of the video screen to advance to the next slide
Poor
performance
Poor
communications
Unrealistic
demands
Personality
conflicts
Personnel
changes
Changes
in size
Conflict of
interests
Changes
in strategy
Declining
sales
Payment
conflicts
Policy
changes
Poor
performance
Poor
communications
Unrealistic
demands
Personality
conflicts
Personnel
changes
Changes
in size
Conflict of
interests
Changes
in strategy
Declining
sales
Payment
conflicts
Why Agencies Lose Clients
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Referrals
How Agencies Gain Clients
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Solicitations
Presentations
Public Relations Image, Reputation
Gateway Changed Its Advertising
After Changing Agencies
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
*Click outside of the video screen to advance to the next slide
A Change in Strategy Led to a Change
in Gateways Advertising
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
*Click outside of the video screen to advance to the next slide
Direct
Mail
Data Base
Management
Research
Creative
Media Services
Creative
Media Services
Research
Direct
Mail
Data Base
Management
Direct Response Agency Activities
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Direct
Response
Agencies
Production
Contest/Sweepstakes
Development
Contest/Sweepstakes
Development
Promotion Planning
Creative Work
Research
Coordination With
Advertising
Premium Design Premium Design
Coordination With
Advertising
Research
Creative Work
Promotion Planning
Data Base Marketing
Activities performed by Sales
Promotion Agencies
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Strategy
Development
Generating
Publicity
Lobbying
Public
Affairs
Damage
Control
Image
Portrayal
Strategy
Development
Generating
Publicity
Lobbying
Public
Affairs
Damage
Control
Image
Portrayal
Functions performed by Public Relations Firms
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Program
Planning
Audio
Special Effects
Video
Web
Banner Ads
Kiosks
Web Sites
CD-ROMs
Special Effects
Video Audio
Kiosks CD-ROMs
Web Sites
Web
Banner Ads
Functions performed by Interactive Agencies
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Interactive
Media Creation
Digital
Content
Animation
Planning and
Implementing
Research
Planning and
Implementing
Research
Information
Application
Analysis and
Interpretation
Primary Data
Collection
Qualitative & Quantitative
Secondary Data
Collection
Primary Data
Collection
Qualitative & Quantitative
Analysis and
Interpretation
Information
Application
Marketing Research Companies
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin