Post on 15-Dec-2015
Chapter 4The Scope of Advertising:
From Local to Global
William F. Arens Michael F. Weigold Christian ArensMcGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
4-2
Chapter Overview
Introduces the people and groups
who work in advertising
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Chapter Objectives
Describe stages in agency/client relationship
Define the main types of ad agenciesDiscuss how agencies get clients, make money
Explain what people do in ad agencies
Describe factors that affect agency/client relationship
Describe what advertisers do and detail org structure
Identify the various groups in advertising and their relationships
Explain how the media and suppliers help
Q. 1. What are the four distinct groups in the advertising
business?
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The Advertising Industry: Organizations
Advertisers
Agencies
Media
Suppliers
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The Advertising Industry: People
Sales personnel
Researchers
Accountants
Managers
Most often employed by advertisers, not clients:
Computer scientists
Writers
Artists
Musicians
Photographers
Performers
AttorneysCinematographers
Q. 2. What is Local Advertising?
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Advertisers: Local
Advertising done by local businesses in a particular city or county targeting customers in their
geographic area
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Advertisers: Local
An ad for Rubio’s Baja Grill showcases its unique products
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Advertisers: Local
Typical structure of small advertisers
with high volumes of work
Q. 3. What are the four types of Local Advertisers?
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Advertisers: Local
Specialty businesses
Government and nonprofits
Franchisees and dealers
Sellers of branded merchandise
Q. 4. What are the three types of Local Advertising?
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Regular price-line, sale, or clearance
Types of Local Advertising
Create favorable image, increase awareness, foster goodwill
Recruit employees, offer services, sell merchandise
ClassifiedInstitutional
Product
Ads can be created locally using local experts orads can be created cooperatively
Q. 5. What are the two kinds of Cooperative Advertising?
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Advertisers: Cooperative
Vertical Co-opHorizontal Co-opFirms in the same business or part of town advertise jointly
National brand association
Manufacturer provides complete ad & shares costs
Professional quality ads
Expands advertising budget
Q. 6. Define Regional Advertisers and National Advertisers.
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Advertisers: Regional and National
Regional: one or several states
National: several regionsor entire country
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Advertisers: Regional and National
Top 10 advertisers in the U.S. by total U.S. advertising in 2005http://adage.com/datacenter/datapopup.php?article_id=127910
Insert ex. 4-2, p. 103
Top 10 U.S. Advertisers
Position = 2.9” horiz, 1.5” vertical
Size = 5.7” WIDE
Resolution = 300 dpi
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Advertisers: Regional and National
Top 10 advertisers in the U.S. Ranked by total U.S. advertising in 2006 http://www.marketingcharts.com/wp/wp-content/uploads/2009/09/tns-mi-top-10-advertisers-h1-2009.jpg
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Advertisers: Regional and National
Q. 7. What are the differences between Regional and National
Advertisers?
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Advertisers: Regional and National
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Centralized Department Structure
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Decentralized Department Structure
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Transnational Advertising Structure
• Divisions are responsible for their own product lines, marketing, and profits
• Each division has an advertising department to coordinate sales and promotion across brands
• The corporate advertising department provides information and guidance
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Global Advertising Strategy
• Assumption that product use and needs are universal
• Standardized approach in all countries
• Extensive research to ensure ad is basic and universal
• Appeal to basic human emotions and interests
Q. 8. Define an Advertising Agency.
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Advertising Agency
• An independent organization of creative people and businesspeople who specialize in developing and preparing marketing and advertising plans, advertisements and other promotional tools.
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Roles of Ad Agencies
Ad Agenc
y
Independent
Business staff;
creative staff
Contracts for media space and
time
Client oriented
Understands global
marketing
Q. 9. What are the different types of agencies?
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Agencies: Types
SpecialtyBoutiques Media
BuyersInteractive
Range of Services
ConsumerBTB
ReachLocal National
Regional
Global
International
Q. 10. What are the various departments in an agency?
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Agencies: People
Account Research and Planning
Traffic Management
Administration
Account Management
Other Services
Advertising Production
Media Planning and Buying
Creative Concepts
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Ad Agency Structure
Q. 11. What is the compensation structure in an ad agency?
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Agencies: Compensation
Ad ratecard price:$100,000
Agencybuys adat 15%discount:$85,000
Agencybills clientfull ad amount:$100,000
Agency keeps $15,000difference
Media Commissions
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Agencies: Compensation
MarkupsAgencybuys materialsforcampaign
Materialscost$85,000
Agencybills for materials plus a17.65%markup
Agency bills $100,000(cost plus markup)
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Agencies: Compensation
Fees
Fee-commission combination
Straight-fee (retainer) method
Incentive system
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Agencies: In-House
Pros
May save money
Allows tighter control
May allow greater attention to the brand
Lower creative quality
Less experience and talent
Loss of objectivity
Cons
Q. 12. How do agencies get clients?
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Agencies: Client Relationships
ReferralsPresentations
Community relationsand networking
Solicitation
Finding and Attracting New Clients
Q. 13. What are the stages in the Client/Agency relationship?
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Client-Agency Relationship Stages
DevelopmentPre-relationship
TerminationMaintenance
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Client/Agency Relationship Factors
Communication
Conduct
Chemistry
Changes
The Four Cs
Q. 14. Who are some of the suppliers in advertising?
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Suppliers
Art studios andweb designers
Printers andrelated specialists
Film and videohouses
Researchcompanies
Q. 15. What are the various categories of media?
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Media
Out-of-home
Digital interactive
Electronic
Direct mail
Other
Social
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Media Around the World
McDonald’s honors an Islamic observance