Chapter 4 The Scope of Advertising: From Local to Global
Introduces the people and groups who work in advertising Chapter Overview Introduces the people and groups who work in advertising
Chapter Objectives Describe the various groups in advertising and their relationships Examine factors that affect agency-client relationships Define the main types of ad agencies Explain how advertisers organize Discuss how agencies get clients, make money Explain what people do in ad agencies Debate the pros/cons of an in-house agency Explain how the media and suppliers help
The Advertising Industry: Organizations Advertisers Agencies Suppliers Media
The Advertising Industry: People Most often employed by advertisers, not clients: Research Artists Sales Writers Management Photographers Accounting Musicians Computer science Performers Legal Cinematographers
Directed to customers in the same geographic area Advertisers: Local Directed to customers in the same geographic area Franchisees and dealers Chain retailers Independent businesses Govt. & nonprofits
An ad for Rubio’s Baja Grill showcases its unique products Advertisers: Local An ad for Rubio’s Baja Grill showcases its unique products
Typical structure of small advertisers with high volumes of work Advertisers: Local Typical structure of small advertisers with high volumes of work
Types of Local Advertising Product Institutional Classified Regular price-line, sale, or clearance Create favorable image, increase awareness, foster goodwill Recruit employees, offer services, sell merchandise
Local Advertisers: Integrators Direct Marketing Sales Promotion Integrated Approach Public Relations Media Advertising
Advertisers: Cooperative Vertical Co-op Horizontal Co-op Manufacturer provides complete ad & shares costs Firms in the same business or part of town advertise jointly National brand association Expands advertising budget Professional quality ads
Advertisers: Regional and National Top 10 advertisers in the U.S. Ranked by total U.S. advertising in 2008
Advertisers: Regional and National Regional: one or several states National: several regions or entire country
Advertisers: Regional and National Comparison of national and local advertising
Centralized Department Structure
Decentralized Department Structure
Decentralized International Structure Divisions are responsible for their own product lines, marketing, and profits Each division has an advertising dept. to coordinate sales and promotion across brands The corporate advertising dept. provides information and guidance
Centralized Global Structure Assumption that product use and needs are universal Standardized approach in all countries Extensive research to ensure ad is basic and universal
Agencies: Defined Develop marketing & ad plans Agency Roles Develop ads & promotions Purchase ad space and time
Agencies: Types Reach Full Service Specialty Local National Regional Global Internatl Full Service Consumer BTB Specialty Boutiques Media Buyers Interactive
Research, Acct planning Agencies: People Traffic Control Administration Media Management Account Management Other Services Creative Concepts Research, Acct planning Production
Agencies: Compensation Media Commissions 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
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)
Agencies: Compensation Fees Fee- commission combination Incentive system Straight-fee (retainer) method
Allows tighter control Agencies: In-House Pros Cons May save money Lower creative quality Allows tighter control Less experience and talent May allow greater attention to the brand Loss of objectivity
Agencies: Client Relationships Finding and Attracting New Clients Referrals Presentations Solicitation Community relations & networking
Client-Agency Relationship Stages Development Maintenance Pre- relationship Termination
Client/Agency Relationship Factors Chemistry Communication The Four Cs Conduct Changes
Suppliers Art studios & web designers Printers & related specialists Film & video houses Research companies
Media Print Out-of-home Electronic Direct mail Digital interactive Other
McDonald’s honors an Islamic observance Media Around the World McDonald’s honors an Islamic observance