4-2 Chapter Overview Introduces the people and groups who work in advertising
4-3 Chapter Objectives Describe stages in agency/client relationship Define the main types of ad agencies Discuss how agencies get clients, make money Explain what people do in ad agencies Describe factors that affect agency/client relationship Describe what advertisers do and detail org structure Identify the various groups in advertising and their relationships Explain how the media and suppliers help
Q. 1. What are the four distinct groups in the advertising business?
4-5 The Advertising Industry: Organizations Advertisers Agencies Media Suppliers
4-6 The Advertising Industry: People Sales personnel Researchers Accountants Managers Most often employed by advertisers, not clients: Computer scientists Writers Artists Musicians Photographers Performers AttorneysCinematographers
Q. 2. What is Local Advertising?
4-8 Advertisers: Local Advertising done by local businesses in a particular city or county targeting customers in their geographic area
4-9 Advertisers: Local An ad for Rubio’s Baja Grill showcases its unique products
4-10 Advertisers: Local Typical structure of small advertisers with high volumes of work
Q. 3. What are the four types of Local Advertisers?
4-12 Advertisers: Local Specialty businesses Government and nonprofits Franchisees and dealers Sellers of branded merchandise
Q. 4. What are the three types of Local Advertising?
4-14 Regular price- line, sale, or clearance Types of Local Advertising Create favorable image, increase awareness, foster goodwill Recruit employees, offer services, sell merchandise ClassifiedInstitutional Product Ads can be created locally using local experts or ads can be created cooperatively
Q. 5. What are the two kinds of Cooperative Advertising?
4-16 Advertisers: Cooperative Vertical Co-opHorizontal Co-op Firms in the same business or part of town advertise jointly National brand association Manufacturer provides complete ad & shares costs Professional quality ads Expands advertising budget
Q. 6. Define Regional Advertisers and National Advertisers.
4-18 Advertisers: Regional and National Regional: one or several states National: several regions or entire country
Advertisers: Regional and National Top 10 advertisers in the U.S. by total U.S. advertising in acenter/datapopup.p hp?article_id= Insert ex. 4-2, p. 103 Top 10 U.S. Advertisers Position = 2.9” horiz, 1.5” vertical Size = 5.7” WIDE Resolution = 300 dpi
4-20 Advertisers: Regional and National Top 10 advertisers in the U.S. Ranked by total U.S. advertising in 2006
4-21 Advertisers: Regional and National
Q. 7. What are the differences between Regional and National Advertisers?
4-23 Advertisers: Regional and National
4-24 Centralized Department Structure
4-25 Decentralized Department Structure
4-26 Transnational Advertising Structure Divisions are responsible for their own product lines, marketing, and profits Each division has an advertising department to coordinate sales and promotion across brands The corporate advertising department provides information and guidance
4-27 Global Advertising Strategy Assumption that product use and needs are universal Standardized approach in all countries Extensive research to ensure ad is basic and universal Appeal to basic human emotions and interests
Q. 8. Define an Advertising Agency.
4-29 Advertising Agency An independent organization of creative people and businesspeople who specialize in developing and preparing marketing and advertising plans, advertisements and other promotional tools.
4-30 Roles of Ad Agencies Ad Agency Independent Business staff; creative staff Contracts for media space and time Client oriented Understands global marketing
Q. 9. What are the different types of agencies?
4-32 Agencies: Types Specialty Boutiques Media Buyers Interactive Range of Services Consumer BTB Reach LocalNational Regional Global International
Q. 10. What are the various departments in an agency?
4-34 Agencies: People Account Research and Planning Traffic ManagementAdministration Account Management Other Services Advertising Production Media Planning and Buying Creative Concepts
4-35 Ad Agency Structure
Q. 11. What is the compensation structure in an ad agency?
4-37 Agencies: Compensation Ad rate card price: $100,000 Agency buys ad at 15% discount: $85,000 Agency bills client full ad amount: $100,000 Agency keeps $15,000 difference Media Commissions
4-38 Agencies: Compensation Markups Agency buys materials for campaign Materials cost $85,000 Agency bills for materials plus a 17.65% markup Agency bills $100,000 (cost plus markup)