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Page 1: 05 agencies

advertising agenciesadvertising agenciesadvertising agenciesadvertising agencies

Page 2: 05 agencies

what agencies do.what agencies do.what agencies do.what agencies do.

structure & organizationstructure & organizationstructure & organizationstructure & organization

and how they’re organizedand how they’re organizedand how they’re organizedand how they’re organizedto do it.to do it.to do it.to do it.

Page 3: 05 agencies

7 primary services:7 primary services:7 primary services:7 primary services:

complete acomplete a marketing analysis marketing analysis develop andevelop an advertising plan advertising plan prepare aprepare a creative strategy creative strategy create create advertising executionsadvertising executions develop and implement adevelop and implement a media plan media plan handle handle billingbilling and and paymentspayments integrate integrate other marketing communicationsother marketing communications

complete acomplete a marketing analysis marketing analysis develop andevelop an advertising plan advertising plan prepare aprepare a creative strategy creative strategy create create advertising executionsadvertising executions develop and implement adevelop and implement a media plan media plan handle handle billingbilling and and paymentspayments integrate integrate other marketing communicationsother marketing communications

Page 4: 05 agencies

4 functions of full-service agencies4 functions of full-service agencies

account managementaccount management creativecreative media planning and placementmedia planning and placement researchresearch

Page 5: 05 agencies

agency organization chartagency organization chartagency organization chartagency organization chart

Print

Traffic

Production ProductionBroadcast Analysts

Other MarketingCommunications

Services[PR, etc.]

Asst. AccountExecutive

AccountExecutive

ManagementSupervisor

Account Mgmt.Director

Copy Spvr. &Copywriters

Art Supervisor& Art Directors

CreativeGroup:

AssociateCreativeDirector

CreativeExec CD

ResearchAssistants

ProjectManagers

ResearchDirector

MediaPlanner

MediaBuyer

MediaSupervisor

AssociateMedia

Director

Media Dept.Director

StrategyReview Board[ManagmentCommittee]

Office Management[Personnel,Accounting,Legal, etc.]

President[COO]

Board ofDirectors

[Chairman/CEO]

Page 6: 05 agencies

liaison between agency and client liaison between agency and client responsible for understanding... responsible for understanding...

the client’s businessthe client’s business the client’s marketing needsthe client’s marketing needs strategy developmentstrategy development

representing client point of view representing client point of view within the agencywithin the agency

liaison between agency and client liaison between agency and client responsible for understanding... responsible for understanding...

the client’s businessthe client’s business the client’s marketing needsthe client’s marketing needs strategy developmentstrategy development

representing client point of view representing client point of view within the agencywithin the agency

account management account management account management account management

Page 7: 05 agencies

account management directoraccount management director management supervisormanagement supervisor account supervisorsaccount supervisors account executivesaccount executives assistant account execsassistant account execs account coordinators account coordinators traffictraffic

account management directoraccount management director management supervisormanagement supervisor account supervisorsaccount supervisors account executivesaccount executives assistant account execsassistant account execs account coordinators account coordinators traffictraffic

Traffic

Asst. AccountExecutive

AccountCoordinator

AccountExecutive

AccountSupervisor

Management.Supervisor

Account Mgmt.Director

account management account management account management account management

Page 8: 05 agencies

responsibilityresponsibility responsibilityresponsibility the creative department the creative department is responsible is responsible

for creating and producing the print and for creating and producing the print and broadcast advertisingbroadcast advertising

strategy is keystrategy is key good creative work good creative work is always guided by ais always guided by a

creative strategy creative strategy that sets forththat sets forth goals to goals to be accomplishedbe accomplished and and key message key message points points to be relayedto be relayed

the creative department the creative department is responsible is responsible for creating and producing the print and for creating and producing the print and broadcast advertisingbroadcast advertising

strategy is keystrategy is key good creative work good creative work is always guided by ais always guided by a

creative strategy creative strategy that sets forththat sets forth goals to goals to be accomplishedbe accomplished and and key message key message points points to be relayedto be relayed

creative departmentcreative departmentcreative departmentcreative department

Page 9: 05 agencies

creative departmentcreative departmentcreative departmentcreative department

executive & group creative executive & group creative directors directors

creative directorcreative director associate creative directorassociate creative director copywriterscopywriters art directorsart directors broadcast producersbroadcast producers print production managersprint production managers traffic coordinatorstraffic coordinators

executive & group creative executive & group creative directors directors

creative directorcreative director associate creative directorassociate creative director copywriterscopywriters art directorsart directors broadcast producersbroadcast producers print production managersprint production managers traffic coordinatorstraffic coordinatorsPrint

Traffic

ProductionBroadcast

Production

Copy Spvr. &Copywriters

Art Supervisor& Art Directors

CreativeGroup:

AssociateCreative

Director (ACD)

CreativeDirector (CD)

ExecutiveCreative

Director (ECD)

StrategyReviewBoard

Page 10: 05 agencies

media departmentmedia departmentmedia departmentmedia department

The The media departmentmedia department has two main has two main functions - functions - planningplanning and and buying.buying.

The The media departmentmedia department has two main has two main functions - functions - planningplanning and and buying.buying.

The planning groupThe planning group handles more handles more strategic marketing and media issues. strategic marketing and media issues.

The buying groupThe buying group handles media handles media negotiations and implementation.negotiations and implementation.

The planning groupThe planning group handles more handles more strategic marketing and media issues. strategic marketing and media issues.

The buying groupThe buying group handles media handles media negotiations and implementation.negotiations and implementation.

Page 11: 05 agencies

media directormedia director

associate media directorsassociate media directors

media supervisorsmedia supervisors

media plannersmedia planners

media buyersmedia buyers

media analystsmedia analysts

media directormedia director

associate media directorsassociate media directors

media supervisorsmedia supervisors

media plannersmedia planners

media buyersmedia buyers

media analystsmedia analysts

Analysts

MediaPlanner

MediaBuyer

MediaSupervisor

AssociateMedia

Director

MediaDirector

MediaMediaPlanPlan

media departmentmedia departmentmedia departmentmedia department

Page 12: 05 agencies

mega-agency media departments mega-agency media departments have now becomehave now become profit centersprofit centers

agencies have set up their media agencies have set up their media departments asdepartments as free-standing unitsfree-standing units

many large clients now look at media many large clients now look at media as aas a separate serviceseparate service

mega-agency media departments mega-agency media departments have now becomehave now become profit centersprofit centers

agencies have set up their media agencies have set up their media departments asdepartments as free-standing unitsfree-standing units

many large clients now look at media many large clients now look at media as aas a separate serviceseparate service

big changes in thebig changes in thebig changes in thebig changes in themedia departmentmedia departmentmedia departmentmedia department

Page 13: 05 agencies

research departmentresearch departmentresearch departmentresearch department

interpret market environmentinterpret market environment gather and analyze research data. gather and analyze research data. primary and secondary techniquesprimary and secondary techniques

determine consumer needs/perceptionsdetermine consumer needs/perceptions understand problemsunderstand problems

advise how ads can meet advise how ads can meet strategic goalsstrategic goals

help find solutionshelp find solutions

interpret market environmentinterpret market environment gather and analyze research data. gather and analyze research data. primary and secondary techniquesprimary and secondary techniques

determine consumer needs/perceptionsdetermine consumer needs/perceptions understand problemsunderstand problems

advise how ads can meet advise how ads can meet strategic goalsstrategic goals

help find solutionshelp find solutionsResearchResearch

ReportReport

Page 14: 05 agencies

research directorresearch director research project managersresearch project managers research assistantsresearch assistants outside research outside research specialistsspecialists

research directorresearch director research project managersresearch project managers research assistantsresearch assistants outside research outside research specialistsspecialists

research departmentresearch departmentresearch departmentresearch department

ResearchSuppliers

Outside

ResearchAssistants

ProjectManagers

ResearchDirector

ResearchResearchReportReport

Page 15: 05 agencies

auxiliary agency functionsauxiliary agency functionsauxiliary agency functionsauxiliary agency functions

account planningaccount planning strategy/creative review boardstrategy/creative review board office managementoffice management

human resourceshuman resources legal serviceslegal services accountingaccounting recruitmentrecruitment

account planningaccount planning strategy/creative review boardstrategy/creative review board office managementoffice management

human resourceshuman resources legal serviceslegal services accountingaccounting recruitmentrecruitment

Page 16: 05 agencies

3 ways agencies make money3 ways agencies make money3 ways agencies make money3 ways agencies make money

commissionscommissions usually 15% of gross costsusually 15% of gross costs

feesfees usually based on negotiated hourly rateusually based on negotiated hourly rate

incentivesincentives still relatively new and problematicstill relatively new and problematic usually based on performance goalsusually based on performance goals

commissionscommissions usually 15% of gross costsusually 15% of gross costs

feesfees usually based on negotiated hourly rateusually based on negotiated hourly rate

incentivesincentives still relatively new and problematicstill relatively new and problematic usually based on performance goalsusually based on performance goals

Page 17: 05 agencies

agency commissionsagency commissionsagency commissionsagency commissions

media commission systemmedia commission system 15% media commission15% media commission

adjustable commission ratesadjustable commission rates negotiate to match client budgetnegotiate to match client budget sliding scalesliding scale

markups-production & servicemarkups-production & service add a percentage markup to costsadd a percentage markup to costs 17.65% of net = 15% of gross17.65% of net = 15% of gross

media commission systemmedia commission system 15% media commission15% media commission

adjustable commission ratesadjustable commission rates negotiate to match client budgetnegotiate to match client budget sliding scalesliding scale

markups-production & servicemarkups-production & service add a percentage markup to costsadd a percentage markup to costs 17.65% of net = 15% of gross17.65% of net = 15% of gross

Page 18: 05 agencies

4 types of fee systems4 types of fee systems4 types of fee systems4 types of fee systems

fixed fee (retainer)fixed fee (retainer) cost-plus feecost-plus fee performance feeperformance fee hybrid fee & hybrid fee &

commissioncommission

fixed fee (retainer)fixed fee (retainer) cost-plus feecost-plus fee performance feeperformance fee hybrid fee & hybrid fee &

commissioncommission

Page 19: 05 agencies

incentivesincentivesincentivesincentives

in theory, a good way to workin theory, a good way to work get paid based on how well you do, not get paid based on how well you do, not

how much you billhow much you bill in practice, difficult to implementin practice, difficult to implement if client makes final decision (instead of if client makes final decision (instead of

agency), how can agency be responsible agency), how can agency be responsible for final results?for final results?

results based on many factors, such as results based on many factors, such as competitive efforts, not just advertisingcompetitive efforts, not just advertising

in theory, a good way to workin theory, a good way to work get paid based on how well you do, not get paid based on how well you do, not

how much you billhow much you bill in practice, difficult to implementin practice, difficult to implement if client makes final decision (instead of if client makes final decision (instead of

agency), how can agency be responsible agency), how can agency be responsible for final results?for final results?

results based on many factors, such as results based on many factors, such as competitive efforts, not just advertisingcompetitive efforts, not just advertising

Page 20: 05 agencies

new businessnew businessnew businessnew business

three primary sourcesthree primary sources build existing client’s businessbuild existing client’s business add and sell new IMC servicesadd and sell new IMC services solicit new accountssolicit new accounts

two ongoing problemstwo ongoing problems “ “spec” workspec” work teams “walking” with accountsteams “walking” with accounts

three primary sourcesthree primary sources build existing client’s businessbuild existing client’s business add and sell new IMC servicesadd and sell new IMC services solicit new accountssolicit new accounts

two ongoing problemstwo ongoing problems “ “spec” workspec” work teams “walking” with accountsteams “walking” with accounts

““The critical objective and role The critical objective and role of any ad agency is gaining new of any ad agency is gaining new

business.”business.”

““The critical objective and role The critical objective and role of any ad agency is gaining new of any ad agency is gaining new

business.”business.”

Page 21: 05 agencies

things to think about:things to think about:things to think about:things to think about:

why might you be interested in why might you be interested in going into the agency business?going into the agency business?

what might keep you from choosing what might keep you from choosing a career in the agency business? a career in the agency business?

why might you be interested in why might you be interested in going into the agency business?going into the agency business?

what might keep you from choosing what might keep you from choosing a career in the agency business? a career in the agency business?