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Advertising and Marketing Process: The Role of Ad Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin KSR Business School/KSRCAS Dr. K V Kannan M.B.A., M.F.T. Ph.D. Senior Lecturer KSR Business School K.S.R. College of Arts & Science Tiruchengode

Advertising and Marketing Process: The Role of Ad Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin KSR Business School/KSRCAS Dr. K V Kannan

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Page 1: Advertising and Marketing Process: The Role of Ad Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin KSR Business School/KSRCAS Dr. K V Kannan

Advertising and Marketing Process: The Role of Ad AgenciesAdvertising and Marketing Process: The Role of Ad Agencies

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinKSR Business School/KSRCAS

Dr. K V Kannan M.B.A., M.F.T. Ph.D.

Senior Lecturer

KSR Business School

K.S.R. College of Arts & Science

Tiruchengode

Page 2: Advertising and Marketing Process: The Role of Ad Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin KSR Business School/KSRCAS Dr. K V Kannan

Ad Agency

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinKSR Business School/KSRCAS

An agency that designs advertisement to call public attention to its clients

Page 3: Advertising and Marketing Process: The Role of Ad Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin KSR Business School/KSRCAS Dr. K V Kannan

Advertising Department UnderCentralized System

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

PresidentPresident

ProductionProduction FinanceFinance MarketingMarketingResearch

and Develop-

ment

Research and

Develop-ment

Human ResourcesHuman

Resources

AdvertisingAdvertising Marketing Research

Marketing Research SalesSales Product

PlanningProduct Planning

KSR Business School/KSRCAS

Page 4: Advertising and Marketing Process: The Role of Ad Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin KSR Business School/KSRCAS Dr. K V Kannan

Decentralized System

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Production Finance

Sales

BrandManager

Ad agency

BrandManager

Ad agency

ProductManagement

SalesPromotion

PackageDesign

AdvertisingDepartment

MarketingResearch

MarketingServices

Marketing Researchand

Development

HumanResources

Corporate

KSR Business School/KSRCAS

Page 5: Advertising and Marketing Process: The Role of Ad Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin KSR Business School/KSRCAS Dr. K V Kannan

In-house Agency

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

KSR Business School/KSRCAS

• An in-house agency is a group of advertising specialists that operates its own profit centre and handles all the advertising work for its primary client – the company with which it is affiliated. Sometimes, in-house agencies may also handle outside work.

Page 6: Advertising and Marketing Process: The Role of Ad Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin KSR Business School/KSRCAS Dr. K V Kannan

Planning advertisingPlanning

advertising

Producing advertisingProducing advertising

Performing research

Performing research

Selecting mediaSelecting media

Sales promotion and training

Sales promotion and training

Strategic market planning

Strategic market planning

Trade show materials

Trade show materials

Package designPackage design

Account Management

Account Management

Creative ServicesCreative Services

Media Planning and Buying

Media Planning and Buying

Account Planning/Research

Account Planning/Research

Strategic market planning

Strategic market planning

Sales promotion and training

Sales promotion and training

Road show materials

Road show materials

Package designPackage design

Full-Services Agencies

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Full Range of Marketing

Communication and Promotion

Services

Full Range of Marketing

Communication and Promotion

Services

Non-Advertising Services

Non-Advertising Services

Public relations and publicity

Public relations and publicity

KSR Business School/KSRCAS

Page 7: Advertising and Marketing Process: The Role of Ad Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin KSR Business School/KSRCAS Dr. K V Kannan

Typical Full-Service Agency Organization

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

WritersArt Directors

TVProduciton

PrintProduction

VP CreativeServices

AccountExecutive

AccountSupervision

VP AccountServices

Media Research SalesPromotion

VP MarketingServices

Personnel Accounting Finance

OfficeManagement

VP Managementand Finance

President

Board ofDirectors

KSR Business School/KSRCAS

Page 8: Advertising and Marketing Process: The Role of Ad Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin KSR Business School/KSRCAS Dr. K V Kannan

Specialized Agencies

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

KSR Business School/KSRCAS

Planning advertisingPlanning

advertising

Producing advertisingProducing advertising

Specialize in certain

functions

Specialize in certain

functions

Target specific audience

Target specific audience

Cover specific industries

Cover specific industries

Do not follow traditional full-service agency

approach

Do not follow traditional full-service agency

approach

Page 9: Advertising and Marketing Process: The Role of Ad Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin KSR Business School/KSRCAS Dr. K V Kannan

Minority Agencies

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

KSR Business School/KSRCAS

• Target at the minorities prevailing in a country/area

Page 10: Advertising and Marketing Process: The Role of Ad Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin KSR Business School/KSRCAS Dr. K V Kannan

The Role of Creative Boutiques

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

CreativeBoutiquesCreative

Boutiques Provide Only Creative ServicesProvide Only Creative Services

Full-Service Agencies May Subcontract With Creative

Boutiques

Full-Service Agencies May Subcontract With Creative

Boutiques

Provide Only Creative ServicesProvide Only Creative Services

Full-Service Agencies May Subcontract With Creative

Boutiques

Full-Service Agencies May Subcontract With Creative

Boutiques

There may not be any staff for media, research or strategic planning

There may not be any staff for media, research or strategic planning

KSR Business School/KSRCAS

Page 11: Advertising and Marketing Process: The Role of Ad Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin KSR Business School/KSRCAS Dr. K V Kannan

Coca Cola’s in-house boutique created this popular spot

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinKSR Business School/KSRCAS

Page 12: Advertising and Marketing Process: The Role of Ad Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin KSR Business School/KSRCAS Dr. K V Kannan

Specialize in Buying Media, Especially Broadcast Time

Specialize in Buying Media, Especially Broadcast Time

Agencies and Clients Develop Media Strategy

Agencies and Clients Develop Media Strategy

Agencies and Clients Develop Media Strategy

Agencies and Clients Develop Media Strategy

Specialize in Buying MediaSpecialize in Buying Media

Media Buying Can Be Specialized

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Media Buying

Services

Media Buying

Services

Media Buying Organizations Implement the Strategy and

Buy Time and Space

Media Buying Organizations Implement the Strategy and

Buy Time and Space

KSR Business School/KSRCAS

Page 13: Advertising and Marketing Process: The Role of Ad Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin KSR Business School/KSRCAS Dr. K V Kannan

Virtual Agencies

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

KSR Business School/KSRCAS

Specialize in Buying Media, Especially Broadcast Time

Specialize in Buying Media, Especially Broadcast Time

Agencies and Clients Develop Media Strategy

Agencies and Clients Develop Media Strategy

May not have conventional offices

May not have conventional offices

Operates as a group of freelancers and is paid

accordingly

Operates as a group of freelancers and is paid

accordingly

Virtual AgenciesVirtual

Agencies

They work at home or in their cars or at their clients’ officesThey work at home or in their cars or at their clients’ offices

Page 14: Advertising and Marketing Process: The Role of Ad Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin KSR Business School/KSRCAS Dr. K V Kannan

Data BaseManagementData Base

Management

ResearchResearch

Media ServicesMedia ServicesMedia Planning and Buying

Media Planning and Buying

Creative Development

and Production

Creative Development

and Production

Account Management

Account Management

How Agencies are Organized

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Organisation of Ad

Agencies

Organisation of Ad

Agencies

Account Planning and

Research

Account Planning and

Research

KSR Business School/KSRCAS

Page 15: Advertising and Marketing Process: The Role of Ad Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin KSR Business School/KSRCAS Dr. K V Kannan

CommissionsMethod

CommissionsMethod

Cost-PlusAgreementsCost-Plus

Agreements

FeeArrangements

FeeArrangements

Incentive-BasedPayment

Incentive-BasedPayment

CommissionsMethod

CommissionsMethod

Cost-PlusAgreementsCost-Plus

Agreements

FeeArrangements

FeeArrangements

Methods of Agency Compensation

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

CompensationMethods

CompensationMethods

KSR Business School/KSRCAS

Page 16: Advertising and Marketing Process: The Role of Ad Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin KSR Business School/KSRCAS Dr. K V Kannan

ReferralsReferrals

How Agencies Gain Clients

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Sometimes cold calls

Sometimes cold calls

PresentationsPresentations

Image, ReputationImage, Reputation

KSR Business School/KSRCAS

Page 17: Advertising and Marketing Process: The Role of Ad Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin KSR Business School/KSRCAS Dr. K V Kannan

?

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinKSR Business School/KSRCAS


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