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The Ad Industry 2. Objectives 1.Know Current Intustry Trends 2.Industry Structure 3.Role of Agencies/Compensation 4.Identify External Players 5.Role of.

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Presentation on theme: "The Ad Industry 2. Objectives 1.Know Current Intustry Trends 2.Industry Structure 3.Role of Agencies/Compensation 4.Identify External Players 5.Role of."— Presentation transcript:

1 The Ad Industry 2

2 Objectives 1.Know Current Intustry Trends 2.Industry Structure 3.Role of Agencies/Compensation 4.Identify External Players 5.Role of Media Conglomerates

3 Trends Affecting the Advertising & Promotion Industry 1.The “Undoing” of Agency Consolidation & Globalization 2.Media Proliferation & Consolidation 3.Media Clutter & Fragmentation 4.Consumer Control: e-Search, Blogs & DVRs (e.g.,TiVo)

4 Google Gives us Power?

5 The Worldwide Advertising Industry U.S expenditures: >$250 billion Global expenditures: $550 billion

6 Structure of the Advertising Industry

7 Advertisers Manufacturers & Service Firms Procter & Gamble, MCI Trade Resellers Sears, McDonald’s Government Federal, State, Local Social Organizations United Way, Nature Conservancy

8 In addition to companies, the Government Makes extensive use of advertising

9 The Role of the Advertiser in IBP Describe the value that the firm’s brand provides Describe the brand’s position in the market Describe the firm’s objectives for the brand in the near-term & long-term Identify the target market(s) that are most likely to respond favorable to the brand Identify & manage the supply chain/distribution system that will most effectively reach the targets Be committed to using advertising & other promotional tools to grow the brand

10 Agencies Advertising Agencies: Full-Service Creative Boutique Interactive In-House Media Specialists Promotion Agencies Direct Marketing Promotion Agencies: Direct Marketing/ Database E-commerce Sales Promotion Event Planning Design Firms Public Relations Firms

11 Advertising agencies make extensive use of advertising to acquire new clients

12 Full Service Agency Services 1.Account Services 2.Marketing Research Services 3.Creative & Production Services 4.Media Planning & Buying Services 5.Administrative Services

13 Agency Compensation 1.Commissions: around 15% of airtime fees—in flux 2.Markup Charges: production cost + fixed % 3.Fee Systems: hourly rates, or by project 4.Pay-for-Results: tightly-specified objectives

14 External Facilitators Marketing & Advertising Research Firms Consultants: Creative, Media, Database Production Facilitators Software Firms: web tracking, fulfillment

15 Media Organizations Broadcast – TV, radio Print – Magazines, direct mail, newspapers Interactive Media – CD-ROMs, online shopping Support Media – Outdoor, directories, Sponsorship Media Conglomerates – AOL Time Warner, Viacom, AT&T

16 Target Audiences Household consumers Businesses Professionals Government Organizations

17 Review/?s 1.Know Current Industry Trends 2.Industry Structure 3.Role of Agencies/Compensation 4.Identify External Players 5.Role of Media Conglomerates


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