1. The Agency World Chapter 2

2. The Agency World The traditional agency The traditional agency New agency structures New agency structures The growing range of specialists The growing range of specialists Selecting an agency Selecting an agency Paying the agency Paying the agency

3. The agency world Objectives Understand the role of advertising agencies and the relationship between agency and client Understand the role of advertising agencies and the relationship between agency and client Appreciate the factors that promote creative and effective advertising Appreciate the factors that promote creative and effective advertising

4. Introduction No business needs an agency No business needs an agency Can buy different services from separate specialists Can buy different services from separate specialists Most businesses find it easier to use an agency Most businesses find it easier to use an agency

5. Alternative ways to perform the advertising function Necessitates employing an advertising staff and absorbing the operation costs Necessitates employing an advertising staff and absorbing the operation costs Unprofitable unless a company does a large and continuous advertising Unprofitable unless a company does a large and continuous advertising In-house advertising operation

6. Full-service advertising agency Advantages In-depth knowledge and skills In-depth knowledge and skills Obtaining negotiating muscle with the media Obtaining negotiating muscle with the media Coordinating advertising and marketing efforts Coordinating advertising and marketing efforts Disadvantages Some control is lost Larger clients are favored over small clients Occasionally inefficient in media buying

7. A la carte Advantages Use services only when they are needed Use services only when they are needed Availability of high-caliber creative talent Availability of high-caliber creative talent Potential cost efficiencies Potential cost efficiencies Disadvantages Specialists approach client problems in a stereotyped fashion Lack of cost accountability Financial instability of smaller boutiques

8. Advertising Agency Organization Develop advertising copy and campaigns Develop advertising copy and campaigns Copywriters, production people, and creative directors Copywriters, production people, and creative directors Creative Services Account Management Media Services Research Services

9. Advertising Agency Organization Selecting the best advertising media Selecting the best advertising media Media planners develop overall media strategy Media planners develop overall media strategy Media buyers procure the selected media Media buyers procure the selected media Creative Services Account Management Media Services Research Services

10. Advertising Agency Organization Study clients’ customers’ buying habits, purchase preferences, and responsiveness Study clients’ customers’ buying habits, purchase preferences, and responsiveness Focus groups, mall intercepts, acquisition of syndicated research data Focus groups, mall intercepts, acquisition of syndicated research data Creative Services Account Management Media Services Research Services

11. Advertising Agency Organization Link the agency with the client Link the agency with the client Act as liaisons so that the client does not need to interact directly with several different service departments and specialists Act as liaisons so that the client does not need to interact directly with several different service departments and specialists Creative Services Account Management Media Services Research Services

12. Memorable Advertising Apple Computer’s “1984” TV Commercial

13. What Makes Effective Advertising? Sound Strategy Consumer’s View Persuasive Doesn’t Overwhelm Deliver on Promises Break Clutter Effective Advertising

14. Creating Effective Advertising The Role of Creativity The Role of Creativity

15. Being Creative Characteristics of creative campaigns Differentiates itself Differentiates itself Out-if-the-ordinary Out-if-the-ordinary Y Energizer Batteries

16. Energizer Batteries Energizer Batteries keep going, and going, and going… Energizer Batteries keep going, and going, and going… Like the drum-beating bunny that reinforces the argument Like the drum-beating bunny that reinforces the argument

17. Being Creative Characteristics of creative campaigns Differentiates itself Differentiates itself Out-if-the-ordinary Out-if-the-ordinary Y Energizer Batteries Y Pepsi-Cola

18. Pepsi-Cola Pepsi-Cola commercial pokes fun at its competitor, Coca-cola and subtly conveys the message that perhaps Pepsi is better than Coke

19. Being Creative Characteristics of creative campaigns Differentiates itself Differentiates itself Out-if-the-ordinary Out-if-the-ordinary Y Energizer Batteries Y Pepsi-Cola Y Volkswagen Golf

20. Being Creative Characteristics of creative campaigns Differentiates itself Differentiates itself Out-if-the-ordinary Out-if-the-ordinary Y Energizer Batteries Y Pepsi-Cola Y Volkswagen Golf Y Bud Light

21. Creating Effective Advertising The Role of Creativity Spuds MacKenzie campaign Spuds MacKenzie campaign Budfrogs Budfrogs Louie and Frank Louie and Frank Whassup?! Whassup?!

22. Little Caesar’s The toga-clad “Pizza, Pizza” man captures and holds the viewer’s attention and provides Little Caesar’s with a unique image vis-a-vis its more laid-back competitors

23. Volkswagen Golf This simple ad dramatizes that the Volkswagen Golf is a roomy car while holding the viewer’s attention in an entertaining manner

24. New agency structures Three factors that influence the ways in which new agency formats have emerged Three factors that influence the ways in which new agency formats have emerged

25. The new agency structures Technological changes Technological changes Growing importance of internationally held accounts for large agencies Growing importance of internationally held accounts for large agencies Recognition that different clients have diversified needs Recognition that different clients have diversified needs

26. Reorganizing the old The ‘account room’ approach The ‘account room’ approach Structure the agency around its clients Structure the agency around its clients - creates a focus for the account team - creates a focus for the account team - keeps them close to the brand - keeps them close to the brand

27. Reorganizing the old The “Virtual Account Group” or “Virtual agency” The “Virtual Account Group” or “Virtual agency” Uses linked computers Uses linked computers Intranet Intranet Video conferencing Video conferencing High tech connections High tech connections

28. Reorganizing the old “hot desking” “hot desking” First come first served offices First come first served offices

29. Results of reorganization Gets agencies away from what they always criticized in their clients. Gets agencies away from what they always criticized in their clients. - focus on products and production with less regard to customers needs - focus on products and production with less regard to customers needs - Allows for anyone on the team to be involved in the creative process.

30. Specialist Agencies Media Buying agencies Media Buying agencies Creative boutiques Creative boutiques Direct marketing Direct marketing Account planning Account planning Management consultants Management consultants

31. Media Buying Agencies Buy blocks of space or time from media business Buy blocks of space or time from media business Effectively became media wholesalers Effectively became media wholesalers An important source of advertising research An important source of advertising research

32. Creative Boutiques Creative hot-shops Creative hot-shops Using briefs from clients – create advertisements Using briefs from clients – create advertisements Often freelancers Often freelancers Assist full service agencies when under pressure Assist full service agencies when under pressure

33. Direct Marketing Nowadays full service agencies are merging or aquiring direct specialists Nowadays full service agencies are merging or aquiring direct specialists Allows for common creative direction Allows for common creative direction Also developing new skills necessary for the internet advertising market Also developing new skills necessary for the internet advertising market

34. Account Planning Take over the planning role for an agency Take over the planning role for an agency Act as supplementary source of ideas for agency or advertiser Act as supplementary source of ideas for agency or advertiser

35. Management consultants Provide general consultancy on brand strategy Provide general consultancy on brand strategy

36. Selecting an agency Have they fully understood the brief? Have they fully understood the brief? Do they know how to use market research? Can they contribute to our thinking here? Do they know how to use market research? Can they contribute to our thinking here? Is their strategic thinking sound? Is their strategic thinking sound? Is it imaginative? Have I learned anything useful from it? Is it imaginative? Have I learned anything useful from it? Are they professional and businesslike? Can I work with their senior people? And will they be actually working on my business? Are their capabilities high in all key areas – management, strategy, creative, media? Do they work well as a team – both among themselves and with our people?

37. Selecting an agency Is their creative work of a high quality? Is their creative work of a high quality? Is this confined to TV, or does it go across all media? Is this confined to TV, or does it go across all media? Does this include below- the-line? New media? Can they offer an integrated service? Does this include below- the-line? New media? Can they offer an integrated service? Do they have real expertise in the specialist areas which we are looking at, egl direct marketing, new media? Can they work with us internationally (now or in the future) How do they propose to evaluate the effectiveness of the campaign?

38. Selecting an agency What is their attitude to costs? Will they save us money? What is their attitude to costs? Will they save us money? How will they relate to our media buying agency/other specialists? How will they relate to our media buying agency/other specialists? How important to them will our account be? Will we be one of their larger accounts, or simply a small fish in a very large pool? How important to them will our account be? Will we be one of their larger accounts, or simply a small fish in a very large pool? Will they fit with our ways of working? Are they willing and able to be business partners, or will they simply be suppliers? (This depends – of course – on how we see our own style of dealing with agencies)

39. Agency Compensation Commissions from media (15%) Reduced commission system(<15%) Labor-based fee system Outcome-based Three Sources