Chapter 3: Organizing for Advertising and Promotion: The role of ad agencies and other marketing communication organization

Participants in the IMC Process
Advertiser (client)

Advertising agency

Media organizations

Marketing communication specialist organizations

Collateral services

The Ad agency’s role
functions performed by advertising agencies might be conducted by the clients themselves through one of the designs discussed earlier in this chapter, nut most large companies use outside firms.

Reasons for using an ad agency
-highly skilled

The Advertiser and Clients
The key participation in the process
Have product, service, or cause marketed
The provide funds that pay for advertising and promotions
Advertising agency
An outside firm that specializes in the creation, placement of the communications message

specializes in the creation, production, and placement

Media organization
provides information and entertainment to their subscribers

provide environment for firm’s marketing communication message

Attract Customers

Specialized marketing communications services
Include direct marketing agencies,

sales promotion agencies,

interactive agencies,

public relations firms.

Organizations provide service in their area of Expertise

Collateral services
support functions used by advertisers, agencies, media organizations, and specialized marketing communications firms.

Perform Specialized functions

examine role of each participant in more detail.

Advertising manager
Responsible for all promotions activities except sales

(in some companies this individual has the title of marketing communications manager).

sometime in charge of marketing communication

Centralized system
-marketing activities are divided along functional lines.

-sales, marketing, research, production planning

-controls the entire promotions operations
budgeting
productions of ads
planning media schedules
monitoring/administering the sales promotions program for product/service

Everything is done by the same Agency

more for a small business

-better communication

Decentralized system
used by large corporations w/ multiple divisions, and products

difficult to manage all advertising through Centralized Department

Uses Separate
-manufacturing
-research
-development
-sales
-marketing
-product line
-business

Assign each product or brand to Brand Manager

Brand Manager
who is responsible for the total management of the brand

including
-planning,
-budgeting,
-sales, and
-profit performance
-control of marketing program

Administration and Execution
Must organize advertising department and supervise and control activities.

Supervises execution

works with departments of production, media, copy, digital/ interactive, and sales promotions

Manager must still approve agency’s plan (if outside agency is used)

Coordination with Other Departments
Coordination with Outside Agencies and Service
Category Management System
Category Managers/ Brand and Advertising Managers
In- house agency
Advertising Agencies
Billings
Superagencies
Reasons for using an Agency
Types of Ad Agencies
Full-Service Agencies
Full range of Marketing Communication / Promotional Services

including planning,
creating,
producing the advertising;
performing research
selecting media.

Nonadvertising Services

strategic market planning
sales promotion
direct marketing
interactive capabilities
package design
public relations/ publibity

Account Services
responsible for understanding the advertiser’s marketing and promotions needs and interpreting them to agency personnel.
Marketing Services
Account Planners
Creative Services
Copywriters
Management and Finance
Agency Organization and Structure
Departmental System
Group System
which individuals from each department work together in groups to service particular accounts.
Other types of Agencies and Services
Creative Boutiques
Media Specialist Companies
Agency Compensation
Commissions from Media
Commission System
Appraisal of the Commission System
Negotiated Commission
Fee, Cost, and Incentive- Based Systems
Fee Arrangement
Fixed-Fee Method
Fee-commission Combination
Cost-Plus Agreement
Incentive-Based Compensation
Incentive-Based System
Percentage Charges
various services the agency purchase from outside providers.
The Future of Agency Compensation
Evaluating Agencies
Financial Audit
Qualitative Audit
Gaining and Losing Clients
Why Agencies Loser Clients
How Agencies Gain Clients
Referrals, Solicitations, Presentations, Public Relations, Image/Reputation
Referrals
Solicitations
Reach out and establish contact with new clients
Presentations
Public Relations
Image and Reputation
Advertising Manager
responsible for promotions activities except sales.
Integrated Marketing Communications Services
Pros and Cons of Integrated Services
Responsibility for IMC: Agency versus Clients
Direct Marketing agencies
Provide programs of direct marketing
Sales Promotion Agencies
Provide contest, sweepstates, sampling product
Interactive Agencies
Developing Websites
Public Relations Firms
Manage publicity for company’s

focus on relationships and communications

Planning and Budgeting
advertising department develops promotional budget

responsible for developing/ promotions plan

final decision on allocating funds made by top management

Manager and Staff Perform
Planning and Budgeting

Administration and Execution

Coordination with Other Departments

Coordination with Outside Agencies/ Services

Clients
have the product, service to be marketed

provide the funds that pay for the advertising and promotion