What is advertising?Advertising is any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor.The time or space devoted to it is paid forIt uses a set format to carry the message rather than personal, one-on-one sellingIt identifies the sponsor of the message

How Many Ads do You See Each Week?The average person is exposed to approximately 2000 ads each week. Do you see that many or more?

DEFINITION An ad agency is a service provider that works for clients to create an effective and goal oriented advertising campaign aimed at representing the company positively in the eyes of its target customers

FUNCTIONS OF AD AGENCYTALENT AND CREATIVE PRODUCTION : This includes formulating plans for creative strategies, copy or script writing, visualization, designing, layout, shooting of films, editing , giving music.

Contd.. RESEARCH : This includes the study about the product and the company by the agencies in order to distribute the message to the public and is used as a tool to test the consumer reaction towards the products and services. DISTRIBUTION A MEDIA PLANNING :In this function, decisions are taken for the type of message you will create for the company and what media will be most helpful in sending this message to the public.

Contd MONITORING FEEDBACK : By monitoring consumer feedback, a decision on whether to revise the message, the medium, the target audience or all of them can be made.

CONTD OTHER SERVICES : MerchandisingPublic relationsOrganizing exhibitions and fairsPreparing all kinds of publicity materialPlanning and organizing special events (event management)Direct marketing

IMPORTANCE OF AD AGENCY OBJECTIVITY & PROFESSIONALISM : Advertising agencies are highly professional. Objectivity is a major virtue of ad agency. They operate in a strange way. While they take up advertising for others, agencies hardly advertise themselves. Ad agencies being outside intermediaries can be objective.

Cost effective : If an organization wants to hire people to do its advertising, it can not provide them work all through the year. Also most experts in the fields of advertising like directors, musicians, photographers, charge huge amounts and are often not affordable..

2003 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinAgency ServicesMarketing ServicesAccount Service

PRIMARY SERVICES complete a marketing analysis develop an advertising plan prepare a creative strategy create advertising executions develop and implement a media plan handle billing and payments integrate other marketing communications

TOP 5 AD AGENCIES IN INDIAAdbur Pvt LtdAkshara AdvertisingMudra Communications LtdChaitra Leo Burnett Pvt ltdCrayons Advertising and Marketing Pvt. Ltd

TOP 5 AD AGENCIES IN THE WORLD

RankAgencyHeadquartersRevenue (US$millions)1Omnicom GroupNew York City10,481.12WPP GroupLONDON10,032.23Interpublic Group of CompaniesNew York City6,700.04Publicis GroupeParis 5,107.25Dentsu*Tokyo2,887.8

agency organization chart

creative department responsibility the creative department is responsible for creating and producing the print and broadcast advertising strategy is key good creative work is always guided by a creative strategy that sets forth goals to be accomplished and key message points to be relayed

media department The media department has two main functions - planning and buying. The planning group handles more strategic marketing and media issues. The buying group handles media negotiations and implementation.

research department interpret market environment gather and analyze research data. primary and secondary techniques determine consumer needs/perceptions understand problems advise how ads can meet strategic goals help find solutions

ResearchReport

TYPES OF AD AGENCYGeneralized Advertising AgenciesCreative agencies specialize in "creative" or design-based business models: their basic interest is in the creation of the advertisement or branding. Other ("full-service") agencies offer design in conjunction withmedia buying.Media agenciesconcentrate on media buying. (In the 1990s, media and creative were often unbundled in the interests of economies of scale in buying media.)The client who chooses to use a design only based advertising agency must assume some of the advertising purchasing. These are activities that are routinely handled by an agency with a media buying option.

Specialist Advertising Agencies

In addition to the full-service, general-line advertising agencies, there are also agencies that specialize in particular kinds of advertising: recruitment, help-wanted, medical, classified, industrial, financial, direct-response, retail, yellow pages, theatrical/entertainment, investment,

In-House Advertising Agencies

Some advertisers believe that they can provide such advertising services to themselves at a lower cost than would be charged by an outside agency.

Interactive agencies

Interactive agenciesmay differentiate themselves by offering a mix ofweb design/development,search engine marketing,internetadvertising/marketing, ore-business/e-commerceconsulting. Interactive agencies rose to prominence before the traditional advertising agencies fully embraced the Internet. Offering a wide range of services, some of the interactive agencies grew very rapidly, although some have downsized just as rapidly due to changing market conditions. Today, the most successful interactive agencies are defined as companies that provide specialized advertising and marketing services for the digital space

Search engine agencies

Lately,pay per click(PPC) andsearch engine optimization(SEO) firms have been classified by some as 'agencies' because they create media and implement media purchases of text based ads. This relatively young industry has been slow to adopt the term 'agency', however with the creation of ads (either text or image) and media purchases, they do technically qualify as 'advertising agencies'.

Social media agencies

Social mediaagencies specialize in promotion of brands in the various social media platforms like blogs, social networking sites, Q&A sites, discussion forums, microblogs etc. The two key services of social media agencies are:social media marketingonline reputation management

Healthcare communications agencies

Healthcarecommunications agencies specialize in strategic communications and marketing services for the Healthcare andLife Scienceindustries. These agencies distinguish themselves through an understanding of the strict labeling and marketing guidelines mandated by theU.S. Food and Drug Administration(FDA) and industry group guidelines, most notablyADVAMEDandPHARMA.

Medical education agenciesMedical education agencies specialize in creating educational content for the Healthcare and Life Science industries. These agencies typically specialize in one of two areas:Promotional education- education and training materials tied to the promotion of a given product or therapyContinuing medical education-accreditededucation and training materials created for continuing physician and medical professional education.

Planning The Best MessageA I D AA - AttentionI - InterestD - DesireA - Action

PoorperformancePoorcommunicationsUnrealisticdemandsPersonalityconflictsPersonnelchangesChangesin sizeConflict ofinterestsChangesin strategyDecliningsalesPaymentconflicts

Advertising StrategyTarget AudienceAdvertising ObjectivesAdvertising BudgetCreative StrategyAdvertising Media and Programming SchedulesEvaluate the Effectiveness of the Strategy

Advertising AgencyRole of the Advertising AgencyTarget AudienceAdvertising ObjectivesAdvertising BudgetCreative StrategyAdvertising Media and ProgrammingEvaluate the Effectiveness of the Strategy

Advertising Agencies in PerspectiveFast change has come to the advertising industry.Huge, integrated agencies face a challenging future.Do clients want a full-service agency?The business model is in need of change.The basis of compensation continues to be debated and altered.Specialists (e.g. media buying services) are being used.Importantly, the core of the creative process is the agency.Several methods are available to evaluate advertising results.

LessObjectivityLessExperienceBetterCoordinationMoreControlCostSavings 2003 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinTheIn-houseAgency+ Positive- Negative

In 1983, Apple computer was planning the introduction of macintosh pc :- to take on IBM. Apples strategy called for the introduction of the macintosh to be a major event that would generate immediate support for the new product. The ad agency, chiat/ days, was given the creative challenge of coming up with a blockbuster idea that would result in a dramatic commercial to introduce the mac. Chiat/days team developed a commercial based on the concept of Big Brother.(purportedly symbolizing IBM) from George Orwells classic novel 1984.Who castigated communism with Big Brother attitude. The ad. Used stark images of orwells dystopia (life is extremley bad because of deprivation or oppression or terror due to communism) and a dramatic scene of a young women throwing a mallet (wooden hammer) through a movie screen to desteroy the controling force. More than $ 500000 was spent to the produce the 1984 commercial.when the commercial was first shown at annual sales meeting in october 1983, there was stunned silence followed by a 15 minutes standing ovation. Apple was ready to showcase the 60 second commercial in two spots during the 1984 super bowl that was cost $ 500000 each. But there was one problem getting approval from apples board for the avant-garde ad and the million dollar media purchase. The board thought the commercial was too

Cont.Controversial and might be detrimental to apples image, particularly in the business market. The cost-consious board also thought the super bowl rates were too expensive and asked the agency to sell off the two spot. The agency could sell one spot, and the offer for the second spot was not attractive. Two days before the game , apple board reluctantly approved airing the commercial after a great deal of persuasion by the agency for the second spot. The Super bowl is the biggest football game of the year, in USA, a premier marketing event. It draws the largest TV audience, its appeal spans various age groups, regions and it is seen in more than 60 countris. It is one occasion where as much attention is paid to commercials as to the program and the spots receive enormus amount of hype and publicity and its exorbitant cost could be matched by huge viewing audience.The super bowl showing of 1984 was the only time it ever appeared as a commercial spot on network TV. The impact of the ad was tremendous. Most importantly, the ad. Helped Apple achieve a very ambitious sales goal. Apple projected sales of 50,000 macs in the first 100 years: actual sales surpassed 72,000 units.

Questions:-

Advertising New macintosh on a super bowl was indeed a famous cutting edge creative work and a bold initiative. Critically evaluate the role and contribution of the agency and the Apples board.

How did Apples bold 1984 commercial score on all fronts?

1984 commercial was perhaps the beginning of integrated marketing communications. Elaborate.

****Relation to text This slide relates to material on pp.79-82 of the textSummary Overview The slide shows the various services of a full service advertising agency. These agency services consist of:Account services this is the link between the agency and its clients. The account executive is the liaison and focal point of the agency-client relationship. They are responsible for understanding the advertisers marketing and promotions needs and interpreting them to agency personnel. Marketing services includes marketing research and media planning. Marketing research is growing in importance as advertisers realize they need a good understanding of the target audience if they are to effectively communicate. Media departments analyze, select, and contract media sources.Creative services is responsible for the creation and execution of advertisements. Copywriters and artists are specialists in this department. Additionally there is a production department that coordinates all phases of production of advertising and other creative work.Use of slide This slide can be used to discuss the roles of the various departments in a full service ad agency. There are many activities and many personnel involved in the planning, creating and producing of ads. The coordination of their effort is critical to the success of an IMC program.*Relation to text This slide relates to material on pp. 92-93 in the text that discusses how agencies gain new clients. Summary Overview Competition for accounts in the agency business is intense. For most large agencies, most new business comes from clients who already have an agency but decide to change their relationships. Thus, agencies must constantly search and compete for new clients. Some of the ways they do this are through Referrals SolicitationsPresentationsPublic relations efforts Image or reputationUse of this slide Gaining new business is very important to advertising agencies. This slide can be used to show the various ways an agency can gain new business. *Relation to text This slide relates to material on pp. 90-92 of the text which discusses reasons why agencies lose clients.Summary Overview While many successful client-agency relationships last for years, long-term relationships are becoming less common. The various reasons an agency might lose clients are shown on this slide. Some of these are avoidable while others may be beyond the agencys control. Use of this slide This slide can be used to show reasons why an agency can lose its clients. Understanding these problems can help agencies avoid them.*Relation to text This slide relates to the material on pp. 75-76 and Figure 3-5Summary Overview This slide presents the pros and cons of using an in house agency to organize for and handle a companys advertising and promotion.Advantages of this system include: Cost savings that result since media commissions that would go to an outside agency go to the in- house agency More control over the advertising function since it is handled within the company rather than by an outside agency Better coordination of advertising and promotion with the firms other marketing activitiesNegative aspects of this system include: Less advertising experience than is available from an outside agency with has a variety of specialists in various areas of advertising Less objectivity since those working for an in-house agency are part of the company rather than an outside agency Less flexibility as outside agencies can be changed much more easily whereas changes among in-house agency personnel are slower and more disruptiveUse of this slide The text discusses the pros and cons of the various systems used to organize for advertising and promotion. This slide summarizes the pros and cons of using in-house agencies. Examples of companies that use in-house agencies should be provided such as Calvin Klein and Radio Shack.*Relation to text This slide relates to material on p. 83 and Exhibit 3-5 of the text.Summary Overview This slide shows an ad from the popular Always campaign that was used by Coca Cola for a number of years and was developed by a creative boutique rather than a traditional full service agency. Edge Creative, the boutique that created this campaign, was a joint venture between Coca Cola, the Disney Company, and three former employees of Creative Artists Agency (a Hollywood talent agency). Use of slide This slide can be used to show the use of creative boutiques in the advertising agency industry. It also can be used as part of a discussion of how some advertisers have been bypassing traditional agencies and tapping into the entertainment industry for creative ideas. *Relation to text This slide relates to material on pp.90-92 and Exhibit 3-8 in the text.Summary Overview Many advertising agencies have had a very long relationship with their clients. This slide shows an ad run by Dr. Pepper/Seven Up celebrating its long-term relationship with Young & Rubicam, the agency that has handled Dr. Pepper advertising for over three decades. Use of this slide This slide can be used to show that long-term relationships between client and agency are still found in the advertising industry. However, the industry is changing and long-term relationships are becoming less common.