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2 The Ad Industry.

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Presentation on theme: "2 The Ad Industry."— Presentation transcript:

1 2 The Ad Industry

2 Objectives Know Current Intustry Trends Industry Structure
Role of Agencies/Compensation Identify External Players Role of Media Conglomerates

3 Trends Affecting the Advertising & Promotion Industry
The “Undoing” of Agency Consolidation & Globalization Media Proliferation & Consolidation Media Clutter & Fragmentation 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 Trade Resellers Government Social Organizations
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: Promotion 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
Account Services Marketing Research Services Creative & Production Services Media Planning & Buying Services Administrative Services

13 Agency Compensation Commissions: around 15% of airtime fees—in flux
Markup Charges: production cost + fixed % Fee Systems: hourly rates, or by project 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 Print Interactive Media Support Media
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 Know Current Industry Trends Industry Structure
Role of Agencies/Compensation Identify External Players Role of Media Conglomerates

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