ad agency

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what is it ??what is it ??what is it ??what is it ??

Ad Agency is a service organised which provides Ad Agency is a service organised which provides specialized services in the field of advertising. It:specialized services in the field of advertising. It:

PlansPlansDesignsDesignsExecutes,andExecutes,andPromtes Promtes

the ad campaingns in return of [mainly]:the ad campaingns in return of [mainly]:Fee by clientsFee by clientsCommission by ad vehiclesCommission by ad vehicles

Ad Agency is a service organised which provides Ad Agency is a service organised which provides specialized services in the field of advertising. It:specialized services in the field of advertising. It:

PlansPlansDesignsDesignsExecutes,andExecutes,andPromtes Promtes

the ad campaingns in return of [mainly]:the ad campaingns in return of [mainly]:Fee by clientsFee by clientsCommission by ad vehiclesCommission by ad vehicles

the first advertising agentsthe first advertising agentsthe first advertising agentsthe first advertising agents

1843 volney palmer1843 volney palmer agent for agent for mediamedia, not advertisers, not advertisers

1864 - george p. rowell1864 - george p. rowell

1843 volney palmer1843 volney palmer agent for agent for mediamedia, not advertisers, not advertisers

1864 - george p. rowell1864 - george p. rowell “ “the johnny appleseed the johnny appleseed

of advertising”of advertising” Rowell’s American Rowell’s American

Newspaper DirectoryNewspaper Directory space wholesaler space wholesaler shared his “secret”shared his “secret” 1888 - 1888 - “Printer’s Ink”“Printer’s Ink”

“ “the johnny appleseed the johnny appleseed of advertising”of advertising”

Rowell’s American Rowell’s American Newspaper DirectoryNewspaper Directory

space wholesaler space wholesaler shared his “secret”shared his “secret” 1888 - 1888 - “Printer’s Ink”“Printer’s Ink”

founded in 1864 by founded in 1864 by francis w. ayer, 20francis w. ayer, 20

founded in 1864 by founded in 1864 by francis w. ayer, 20francis w. ayer, 20

the first advertising agencythe first advertising agencythe first advertising agencythe first advertising agency

“ “& son” made the & son” made the business seem more business seem more establishedestablished

worked for worked for advertiseradvertiser slogan - slogan - “keeping “keeping

everlastingly at it everlastingly at it brings success.”brings success.”

“ “& son” made the & son” made the business seem more business seem more establishedestablished

worked for worked for advertiseradvertiser slogan - slogan - “keeping “keeping

everlastingly at it everlastingly at it brings success.”brings success.”

n.w. ayer n.w. ayer & son& son n.w. ayer n.w. ayer & son& son

major types of agency:major types of agency:major types of agency:major types of agency: mega-agency groupsmega-agency groups independent agenciesindependent agencies

national, regional, and local national, regional, and local

specialized/niche agenciesspecialized/niche agencies agency service suppliersagency service suppliers

media buying, creative servicesmedia buying, creative services

mega-agency groupsmega-agency groups independent agenciesindependent agencies

national, regional, and local national, regional, and local

specialized/niche agenciesspecialized/niche agencies agency service suppliersagency service suppliers

media buying, creative servicesmedia buying, creative services

mega-agency groupsmega-agency groupsmega-agency groupsmega-agency groups

prompted by mergers and prompted by mergers and client globalizationclient globalization

financial pressures financial pressures

prompted by mergers and prompted by mergers and client globalizationclient globalization

financial pressures financial pressures

martin sorrell,chairman WPP

service multinational service multinational accountsaccounts

subsidiaries provide subsidiaries provide “IMC” (integrated marketing “IMC” (integrated marketing communication) services communication) services

service multinational service multinational accountsaccounts

subsidiaries provide subsidiaries provide “IMC” (integrated marketing “IMC” (integrated marketing communication) services communication) services

mega-agency pros & consmega-agency pros & consmega-agency pros & consmega-agency pros & cons

positives:positives: larger talent poollarger talent pool negotiating cloutnegotiating clout financial rewardsfinancial rewards account securityaccount security competitive edgecompetitive edge strong partnershipsstrong partnerships more servicesmore services international linkinternational link

positives:positives: larger talent poollarger talent pool negotiating cloutnegotiating clout financial rewardsfinancial rewards account securityaccount security competitive edgecompetitive edge strong partnershipsstrong partnerships more servicesmore services international linkinternational link

negatives:negatives: people vs. profitpeople vs. profit creativity vs. sizecreativity vs. size conflict of conflict of

interestsinterests people businesspeople business

negatives:negatives: people vs. profitpeople vs. profit creativity vs. sizecreativity vs. size conflict of conflict of

interestsinterests people businesspeople business

national, regional & localnational, regional & localnational, regional & localnational, regional & local

these arethese are independent agencies independent agencies

there are nowthere are now fewer national agencies fewer national agencies which are not part of mega-agency groupswhich are not part of mega-agency groups

regionalregional and and local agencies local agencies work with work with smaller clients who are usually located nearbysmaller clients who are usually located nearby

these arethese are independent agencies independent agencies

there are nowthere are now fewer national agencies fewer national agencies which are not part of mega-agency groupswhich are not part of mega-agency groups

regionalregional and and local agencies local agencies work with work with smaller clients who are usually located nearbysmaller clients who are usually located nearby

specialized/niche agenciesspecialized/niche agenciesspecialized/niche agenciesspecialized/niche agencies

industry specialistsindustry specialists ethnic agenciesethnic agencies




industry specialistsindustry specialists ethnic agenciesethnic agencies internet agencies internet agencies internet agencies internet agencies



industry specialistsindustry specialists ethnic agenciesethnic agencies internet agenciesinternet agencies internet agenciesinternet agencies

business-to-business agenciesbusiness-to-business agencies business-to-business agenciesbusiness-to-business agencies creative boutiques and creative boutiques and

design housesdesign houses

creative boutiques and creative boutiques and design housesdesign houses

other suppliersother suppliersother suppliersother suppliers provide “unbundled” servicesprovide “unbundled” services

one part of what an agency doesone part of what an agency does

media buying servicesmedia buying services freelancers & consultantsfreelancers & consultants production companies production companies in-house or “house” agenciesin-house or “house” agencies

agencies owned by clients agencies owned by clients

provide “unbundled” servicesprovide “unbundled” services one part of what an agency doesone part of what an agency does

media buying servicesmedia buying services freelancers & consultantsfreelancers & consultants production companies production companies in-house or “house” agenciesin-house or “house” agencies

agencies owned by clients agencies owned by clients

primary roles of agenciesprimary roles of agencies primary roles of agenciesprimary roles of agencies

idea generationidea generation brand-buildingbrand-building

idea generationidea generation brand-buildingbrand-building

primary services:primary services: primary services: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

integrated marketing communicationintegrated marketing communicationintegrated marketing communicationintegrated marketing communication

““done right,done right, IMC IMC is theis the planningplanning and and implementation implementation of the of the various various communications communications disciplinesdisciplines as a as a single, overall single, overall communications communications system --system -- making all making all the channels work.”the channels work.”

““done right,done right, IMC IMC is theis the planningplanning and and implementation implementation of the of the various various communications communications disciplinesdisciplines as a as a single, overall single, overall communications communications system --system -- making all making all the channels work.”the channels work.”

integrated marketing communicationintegrated marketing communicationintegrated marketing communicationintegrated marketing communication

advertising advertising public relationspublic relations direct response direct response sales promotionsales promotion personal sellingpersonal selling

advertising advertising public relationspublic relations direct response direct response sales promotionsales promotion personal sellingpersonal selling

the imc promotion mixthe imc promotion mix the imc promotion mixthe imc promotion mix

ad agency departmentalizationad agency departmentalization

Following are the types of department in a normalized ad agency:Accounts managementCreative managementMedia departmentResearch department

Following are the types of department in a normalized ad agency:Accounts managementCreative managementMedia departmentResearch department

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

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

account management account management account management account management

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

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 coordinators

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.

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

media departmentmedia departmentmedia departmentmedia department

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

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 solutions

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

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

ways agencies make moneyways agencies make money ways agencies make moneyways 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

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

types of fee systemstypes of fee systems types of fee systemstypes 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

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

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.”

beyond 2K10”beyond 2K10”beyond 2K10”beyond 2K10”

advertising advertising agency trendsagency trends

advertising advertising agency trendsagency trends

agency trendsagency trendsagency trendsagency trends clutter, overloadclutter, overload, , “overchoice”“overchoice”

increasedincreased media options media options increasing increasing audience fragmentationaudience fragmentation more messages more messages everywhereeverywhere

doing more with lessdoing more with less economic pressures, economic pressures, “downsizing”“downsizing” ongoing ongoing client budget pressuresclient budget pressures

managing sizemanaging size more more mergersmergers and and mega-agenciesmega-agencies

clutter, overloadclutter, overload, , “overchoice”“overchoice” increasedincreased media options media options increasing increasing audience fragmentationaudience fragmentation more messages more messages everywhereeverywhere

doing more with lessdoing more with less economic pressures, economic pressures, “downsizing”“downsizing” ongoing ongoing client budget pressuresclient budget pressures

managing sizemanaging size more more mergersmergers and and mega-agenciesmega-agencies

agency trendsagency trendsagency trendsagency trends managingmanaging technology technology

interactive marketinginteractive marketing e-mail, web sitese-mail, web sites

improving improving internal systems internal systems account planning account planning re-engineeringre-engineering agency organization agency organization improving delivery ofimproving delivery of imc services imc services

managingmanaging technology technology interactive marketinginteractive marketing e-mail, web sitese-mail, web sites

improving improving internal systems internal systems account planning account planning re-engineeringre-engineering agency organization agency organization improving delivery ofimproving delivery of imc services imc services

as long as marketers need as long as marketers need ideasideas to build their to build their brands,brands, they’re going to needthey’re going to need

as long as marketers need as long as marketers need ideasideas to build their to build their brands,brands, they’re going to needthey’re going to need

in conclusion...in conclusion...in conclusion...in conclusion...

advertising agenciesadvertising agenciesadvertising agenciesadvertising agencies

thanxthanxthanxthanx

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