MRP/IMC/M11 Integrated Marketing Communications Module 1: An introduction to IMC Concept 3: Role of advertising agencies

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Integrated Marketing Communications

Module 1: An introduction to IMC

Concept 3: Role of advertising agencies

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Integrated Marketing CommunicationsModule 1: An introduction to IMC


Development and implementation of IMC program is a complex process.

It requires the skills and efforts of many people and several specialized organizations/agencies.

Which are the participants in the IMC process..?

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Participants in the IMC process

Advertiser(client)

AdvertisingAgency

MediaOrganizations

MarketingCommunicationSpecialistOrganizations:

-Direct response agencies

-Sales promotion agencies

-Interactive agencies

-PR firms

CollateralServices

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Advertising Agency

It is an outside firm that specializes in the creation, production and placement of communications message and that may provide other services to facilitate the marketing and promotions process.

Eg. Grey Worldwide, Leo Burnett Worldwide, Ogilvy & Mather Worldwide, Saatchi & Saatchi

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Media Organizations

Primary objective is to provide information or entertainment to their subscribers, viewers or readers. Eg. TV channels, print media, radio etc are some of the media organizations.

A mediums primary objective is to sell itself as a way for companies to reach their target markets with their message effectively.

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Specialized MARCOM services

They include:

Direct marketing agencies – develops direct marketing programs

Sales promotion agencies – develop contests, sweepstakes, premium offers etc.

Interactive agencies – use of websites, internet

Public relations firms – communication and relationships with relevant publics

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Collateral Services

They include:

Marketing research company, package design firms, consultants, photographers, event marketing companies.

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Client side: Organization structure for promotion:

Centralized system

Decentralized system

In-house agency

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Centralized systemCEO

Production FInance Marketing R&D Human Resources

Marketing Research

Advertising

Sales

Product Planning

Advertising Manager

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In such a system, the basic functions of the advertising manager are as follows:

1. Planning and Budgeting

2. Administration and execution

3. Coordination with other departments – market research, sales dept

4. Coordination with outside agencies and services

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Decentralized systemCEO

Production FInance Marketing R&D Human Resources

Marketing Services

AdvertisingDepartment

SalesProduct Management

Brand Manager

Brand Manager

Brand Manager

Ad agency

Ad agency

Ad agency

Marketing Research

Product/brand Manager

Product Manager

Product Manager

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In-house agencies

It is an advertising agency that is set up, owned, and operated by the advertiser.

Sometimes they are little more than advertising departments only.

They result in cost saving, time saving and are better controlled by the management.

Eg. Calvin Klein, The Gap, Benetton

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Organizational Advantages Disadvantages

System

Centralized - Fewer persons - Longer response time

- More top-mgmt - Cannot handle multiple

involvement product lines

Decentralized - Rapid response - Ineffective decision

to problems making

- Increased flexibility - Internal conflicts

In-house agency - Cost savings - Less experience

- More control - Less objectivity

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The Ad agency’s role in IMC

Reasons for using an agency:

-Services of highly skilled individuals who are specialists in their chosen

fields.

- Industry specific offerings of agencies

-An outside agency can provide an objective viewpoint of the market and

is not subject to internal company policies, biases or other limitations

-It can draw on the broad range of experience

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Types of Ad agencies:

-Full service agencies

-Creative boutiques

-Media buying services

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Creating advertisingCreating

advertising

Planning advertisingPlanning

advertising

Producing advertisingProducing advertising

Performing research

Performing research

Selecting mediaSelecting media

Sales promotions

Sales promotions

Strategic market planning

Strategic market planning

Direct marketing

Direct marketing

Interactive capabilitiesInteractive capabilities

Package designPackage design

Full range of marketing

communication and promotion

services

Full range of marketing

communication and promotion

services

Nonadvertising services

Nonadvertising services

Public relations and publicity

Public relations and publicity

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Creative services

-Creation and execution of advertisements

-Copywriters write the message and art department takes care of how

the ad looks

-For TV ads, the layout is known as a storyboard

-Once the copy, layout, illustrations have been completed, the ad is

turned over to the production department

-Printers, photographers, typographers are hired to produce the ad

-A traffic department coordinates the phases of production

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Account services

-This is the link between the ad agency and its clients

-The account executive is responsible for understanding the advertiser’s marketing and promotions needs and interpreting them to the agency personnel

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Marketing Services

-It includes a marketing research department to gather, analyze and interpret information

-The media department analyzes, selects and contracts for space or time in the media

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Management and Finance

-The ad agency must be managed and perform basic operating and administrative functions such as accounting, finance and human resources.

-Large agencies employ administrative, managerial and clerical people to perform these functions.

-Almost 64% of an agencies income goes to salary and benefits for its employees

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WritersArt directors

TVproduction

Traffic

Printproduction

AccountExecutive

Accountsupervision

VP accountservices

Media

Research

SalesPromotion

VP marketingservices

Personnel

Accounting

FinanceOffice

management

VP managementand finance

President

Board ofdirectors

VP creativeservices

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Creative Boutiques

It is an agency that provides only creative services.

Full service agencies often subcontract work to creative boutiques when they are very busy or because its own employees do not have sufficient skills.

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Media buying services

They are independent companies that specialize in the buying of media time. Eg. Radio and television time

Since they purchase large amounts of time and space, they receive large discounts and can save the small agency or client money on media purchases.

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How agencies gain clients?

Through referrals – from existing clients, media and even other agencies Business Development

Solicitations – seeks and establish contact with new clients

Presentations – give a speculative presentation for prospective clients

Public relations – participation in events, work with charitable organizations or just engage in mass media publicity

Image and reputation – developed over the years working with big clients

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ReferralsReferrals

SolicitationsSolicitations

PresentationsPresentations

Public RelationsPublic Relations Image, ReputationImage, Reputation

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How agencies loose clients

Poorperformance

Poorcommunications

UnrealisticClient demands

Personalityconflicts

Personnelchanges

Changesin size of client

or agency

Conflicts ofInterest –

competition

Change in client’s strategy

Decliningsales

Paymentconflicts

Policy Changes

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Specialized Services

Directmail

Directmail

Databasemanagement

Databasemanagement

ResearchResearch

CreativeCreative

Media servicesMedia services

Direct-MarketingAgencies

Direct-MarketingAgencies

ProductionProduction

Database development, management

Database development, management

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Sales Promotion Agency

Catalog productionCatalog production

Promotional planningPromotional planning

Creative researchCreative research

Tie-in coordinationTie-in coordination

FulfillmentFulfillment

Premium design and manufacturing

Premium design and manufacturing

Contest/sweepstakes management

Contest/sweepstakes management

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PR Firms

Strategydevelopment

Generatingpublicity

Lobbying

Publicaffairs

News releases,communication

Research

Managingcrises

Coordinationwith promotional

areas

Special events

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Interactive Media Services

Webbanner ads

Webbanner ads

Search engine optimization

Search engine optimizationKiosksKiosks

Interactive Media Creation

Interactive Media Creation

CD-ROMsCD-ROMs

Web sitesWeb sites Text messagesText messages

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Collateral Services – Marketing Research Company

Quantitative studiesQuantitative studies

Qualitative researchQualitative research

Help clients under-stand target

audience

Help clients under-stand target

audience

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Documents

MRP/IMC/M11 Integrated Marketing Communications Module 1: An introduction to IMC Concept 3: Role of advertising agencies