1. Chapter 3 Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communication Organizations

2. Participants in the Integrated Marketing Communications Process
Advertisers or clients
Have the products, services, or causes to be marketed
Provide the funds that pay for advertising and promotions
Responsible for developing marketing program
Advertising agency
Specializes in the creation, production, and/or placement of the communications message
Facilitates the integrated marketing communications proess?
Relation to text: This slide relates to content found on page 69 of the text.
Summary Overview: This slide presents some of the participants in the integrated marketing communications process—advertisers or clients and advertising agency.
Use of this slide: This slide can be used to introduce some of the participants in the IMC process and provide a brief overview of their roles.
Advertiser (client) - The company or organization that has the product, service, or cause to be marketed and pays for the IMC program
Advertising agency - Specializes in the creation, production, and placement of communications messages. They may provide other services to facilitate the IMC process.

3. Participants in the Integrated Marketing Communications Process
Media organizations
Provide information, entertainment, or an environment for a firm’s marketing communications message
Specialized marketing communication services organizations
Direct-marketing agencies
Sales promotion agencies
Digital/Interactive agencies
Public relations firms
Relation to text: This slide relates to content found on page 70 of the text.
Summary Overview: This slide presents some of the participants in the integrated marketing communications process—media organizations, specialized marketing communication services organizations, and collateral services organization.
Use of this slide: This slide can be used to introduce some of the participants in the IMC process and provide a brief overview of their roles.
Media organizations provide information and entertainment to subscribers, viewers, listeners, and/or readers. Marketers can purchase time or space to deliver their advertising and promotion messages
Marketing communication specialist organizations provide specialized marketing communication services, including:
Direct response agencies
Sales promotion agencies
Public relations firms
Interactive agencies
Collateral services are companies that provide a wide array of support functions used by advertisers, agencies, media organizations, and specialist organizations such as marketing research, package design, photography, video production and so on.
Collateral services organizations
Collateral services: Support functions used by advertisers, agencies, media organizations, and specialized marketing communication firms

4. Factors Affecting How Companies Organize for IMC
Size of the organization
Number of products it markets
Role of advertising and promotion in the marketing mix
Allocated budget
Marketing organization structure
Relation to text: This slide relates to content found on pages of the text.
Summary Overview: This slide presents the factors affecting advertising and promotions: size of the organization, number of products it markets, role of advertising and promotion in the marketing mix, allocated budget, and marketing organization structure.
Use of this slide: This slide can be used to present the factors affecting advertising and promotions.

5. Figure 3.2 - The Advertising Department under a Centralized System
Relation to text: This slide relates to Figure 3-2 on page 71 of the text.
Summary Overview: This slide shows how a company would organize a marketing department under a centralized system.
Use of this slide: This slide can be used to explain how the marketing department would fit into a centralized organization. Under this system, various organizational activities are divided along functional lines. Within the marketing department itself, specialized activities are also divided along functional lines.

6. Centralized System
Marketing activities are divided along functional lines
Advertising manager: Responsible for:
Planning and budgeting
Administration and execution
Coordination with other departments
Coordination with outside agencies and services
Relation to text: This slide relates to content found on pages of the text.
Summary Overview: This slide presents the meaning of a centralized system and gives the responsibilities of an advertising manager.
Use of this slide: This slide can be used to explain centralized system and the responsibilities of an advertising manager. An advertising manager is responsible for planning and budgeting, administration and execution, coordination with other departments, and coordination with outside agencies and services.

7. Figure 3.3 - Decentralized Brand Management System
Relation to text: This slide relates to Figure 3-3 on page 74 of the text.
Summary Overview: This slide shows how responsibilities are divided in a company that has a decentralized advertising system.
Use of this slide: This slide can be used to show how a company would organize advertising and promotion under a decentralized brand management system, which is often used by large companies with multiple divisions, products, and brands.
Under this system, responsibility for the various IMC functions are assigned to a product or brand manager, who works closely with the outside advertising agency, as well as other marketing communication specialists.
The brand manager may also work with other areas of marketing within the firm, such as sales, marketing research, and the advertising/promotion department.

8. Decentralized System
Used by firms with multiple divisions and many different products
Each product or brand is assigned to a brand manager
Brand manager: Responsible for the total management of the brand, including planning, budgeting, sales, and profit performance
Category management system: Additional layer of management above the brand managers
Relation to text: This slide relates to content found on page 73 of the text.
Summary Overview: This slide presents the meaning of a decentralized system and category management system and discusses the responsibilities of a brand manager.
Use of this slide: This slide can be used to explain decentralized system, category management system, and the responsibilities of brand manager. A brand manager is responsible for the total management of the brand, including planning, budgeting, sales, and profit performance. Category management system is the additional layer of management above the brand managers.

9. In-House Agencies
Advertising agency that is set up, owned, and operated by the advertiser
Relation to text: This slide relates to content found on pages of the text.
Summary Overview: This slide presents the definition of in-house agencies.
Use of this slide: This slide can be used to define in-house agencies.

10. Figure 3.4 - Comparison of Advertising Organizational Systems
Relation to text: This slide relates to Figure 3-4 on page 79 of the text.
Summary Overview: This slide presents the advantages and disadvantages of centralized organizational system, decentralized organizational systems, and in-house agencies.
Use of this slide: This slide can be used to discuss the advantages and disadvantages of centralized organizational system, decentralized organizational systems, and in-house agencies.

11. Advertising Agencies
Service organizations that specialize in planning and executing advertising programs for its clients
Superagencies: Large agencies that merged with or acquired other agencies and support organizations
Have now evolved into 4 major agency holding companies?
Relation to text: This slide relates to content found on pages of the text.
Summary Overview: This slide presents the meaning of advertising agencies and superagencies. Advertising agencies are service organizations that specialize in planning and executing advertising programs for is clients. Superagencies are large agencies that merged with or acquired other agencies and support organizations.
Use of this slide: This slide can be used to present the meaning of advertising agencies and superagencies.

12. Reasons for Using an Ad Agency
Highly skilled specialists
Specialization in a particular industry
Objective viewpoint of the market
Relation to text: This slide relates to content found on page 81 of the text.
Summary Overview: This slide presents the primary reasons for using an outside ad agency.
Use of this slide: This slide can be used to discuss why a company may choose to use an outside advertising agency.
Highly skilled specialists may include artists, writers, media analysts, researchers and so on.
Specialized markets can include travel, high-tech, e-commerce, bioscience, and so forth.
Because the outside agency is not subject to internal company policies, biases, or limitations, it has a more objective viewpoint of the market.
Ad agencies typically have multiple clients with a variety of products and services, so they have a broader range of experience.
Broad range of experience

13. Full-Service Agencies
Performing research
Selecting media
Full range of marketing communication and promotion services
Creating advertising
Planning advertising
Producing advertising
Interactive capabilities
Package design
Nonadvertising services
Public relations and publicity
Sales promotions
Strategic market planning
Direct marketing
Relation to text: This slide relates to content found on page 82 of the text.
Summary Overview: This slide introduces the wide array of activities performed by a full-service advertising agency.
Use of this slide: This slide can be used to discuss the various types of activities a full-service advertising agency can offer. These advertising services include:
Planning, creating, and producing advertising campaigns
Performing marketing and advertising research
Selecting media
Types of non-advertising services offered by full-service agencies:
Strategic market planning
Sales promotion
Direct marketing
Interactive capabilities
Package design
Public relations and publicity

14. Agency Organization and Structure
All agency functions are set up as a separate department
Departmental system
Individuals from each department work together in groups to service particular accounts
Group system
Relation to text: This slide relates to the content on page 86 of the text.
Summary Overview: This slide presents that most medium-size and large agencies are structured under either a departmental or a group system.
Use of this slide: This slide can be used to introduce the concept of agency organization and structure.
Under the departmental system, each of the agency functions is set up as a separate department. Many large agencies use the group system, in which individuals from each department work together in groups to service particular accounts.

15. Creative Boutiques
Small ad agencies that provide only creative services
Advantages
Turn out inventive creative work quickly
Provide more attention and better access to creative talent
Relation to text: This slide relates to the content on pages of the text.
Summary Overview: This slide presents the meaning and advantages of creative boutiques in an IMC program.
Use of this slide: This slide can be used to introduce the concept of creative boutiques and discuss the advantages.

16. Media Specialist Companies
Specialize in the buying of media
Agencies and clients develop media strategy
Media buying organizations implement strategies, and buy time and space
Relation to text: This slide relates to the content on page 87 of the text.
Summary Overview: This slide shows the role of media specialist companies.
Use of this slide: This slide can be used to present the role of companies that specialize in the buying of media, particularly radio and television time.
Agencies and clients develop their own media strategies, but purchasing advertising media has grown more complex as specialized media proliferate. This created a niche market for media specialist companies that specialize in the analysis and purchase of advertising time and space.
Some of the characteristics of media specialist companies:
They specialize in buying media time, particularly radio and television time
Because they purchase large amounts of time and space, they usually receive large discounts and can save the agency/company money on media purchases
They are paid a fee or commission for their work
The agency or client may often develop the media strategy
Media buying organizations may be used to implement the media strategy and buy broadcast time and/or space in print publications

17. Figure 3.9 - How Agencies Add Value to Client’s Business
Relation to text: This slide relates to Figure 3-9 on page 93 of the text.
Summary Overview: This slide presents the ways for agencies to add value to their client’s business.
Use of this slide: This slide can be used to present and discuss the ways for agencies to add value to their client’s business.
Source: “Report on the Agency–Advertiser Value Survey,” American Association of Advertising Agencies and Association of National Advertisers, August 2007

18. Why Agencies Lose Clients
Poor performance or service
Poor communication
Unrealistic demands by the client
Personality conflicts
Personnel changes
Changes in size of the client or agency
Changes in the client’s corporate and/or marketing strategy
Conflicts of interest
Declining sales
Conflicting compensation philosophies
Changes in policies
Disagreements over marketing and/or creative strategy
Lack of integrated marketing capabilities
Relation to text: This slide relates to the content on pages of the text.
Summary Overview: This slide presents some of the common reasons why agencies lose their clients.
Use of this slide: This slide can be used to present the various reasons why an agency might lose a client. Some of these are avoidable, while others may be beyond the agency’s control. Recognizing these warning signs promptly can give an agency the time it needs to adapt its programs and policies, with the objective of trying to keep the client satisfied.

19. How Agencies Gain Clients
Solicitations
Referrals
Presentations
Relation to text: This slide relates to the content on pages of the text.
Summary Overview: This slide shows the various ways an agency can gain new business.
Use of this slide: This slide can be used to explain that gaining new business is very important to advertising agencies, and competition for accounts intense. Here are some key ways in which an agency can gain new clients:
Referral - New clients come from the referrals of existing clients, media reps, and even other agencies.
Solicitations - Direct solicitation through letters, cold calls, and following-up on leads
Presentation - An invitation to make a presentation is an opportunity to describe the agencies experience, personnel, capabilities, operating procedures, and previous work.
Public relations - Participation in civic and social groups, and pro bono work with charitable organizations
Image and reputation - Word-of-mouth recommendations from satisfied clients, as well as industry awards
Public relations
Image and reputation

20. Direct-Marketing Agencies
Provide a variety of services
Database analytics and management
Direct mail
Research and media services
Creative and production capabilities
Has following departments
Account management
Creative
Media
Database development/management
Relation to text: This slide relates to the content on pages of the text.
Summary Overview: This slide presents some of the services offered by direct marketing agencies and the types of departments found in most ad agencies.
Use of this slide: This slide can be used to discuss the role of direct response agencies, the types of services they provide, and their role in the development of an IMC program. While direct mail is the primary weapon, many agencies are expanding into infomercial production and database management.
Database management is key to identifying new customers, and building relationships and loyalty among existing customers.
This slide can also be used to show the departments into which a typical direct-response ad agency is divided.
Account managers work with clients to plan direct-marketing programs and determine the agency’s role in the overall IMC process.
The creative department consists of copywriters, artists, and producers. They develop the direct-response message.
The media department is concerned with message placement.
If the agency has a database department, its function is to develop and manage databases for clients.

21. Sales Promotion Agency
Involved with the developing and managing of sales promotion programs
Provide following services
Promotional planning, creative research, and tie-in coordination
Fulfillment
Premium design and manufacturing
Catalog production
Contest/sweepstakes management
Relation to text: This slide relates to the content on page 100 of the text.
Summary Overview: This slide presents the role and types of services provided by large sales promotion agencies.
Use of this slide: This slide can be used to present and discuss the role and various types of sales promotion offered by agencies. It can be pointed out that many of these agencies are also developing direct/database marketing and telemarketing to expand their integrated marketing capabilities.

22. Public Relations Firm
Develops and implements programs to manage organization’s:
Publicity
Image
Affairs with consumers and other relevant publics
Employees, suppliers, stockholders, government, labor groups, citizen action groups, and the general public
Relation to text: This slide relates to the content on pages of the text.
Summary Overview: This slide discusses the role of public relations firm. The public relations firm develops and implements programs to manage the organization’s publicity, image, and affairs with consumers and other relevant publics, including employees, suppliers, stockholders, government, labor groups, citizen
action groups, and the general public.
Use of this slide: This slide can be used to discuss the role of public relations firm.

23. Functions Performed by Public Relations Firms
Strategy
development
Generating
publicity
Lobbying
Public
affairs
News releases, communication
Research
Relation to text: This slide relates to the content on page 101 of the text.
Summary Overview: This slide presents some of the functions commonly performed by a public relations firm.
Use of this slide: This slide can be used to show the services provided by most public relations firms. Many large companies use both an advertising agency and a public relations firm.
Managing crisis
Special events
Coordination w/promotional areas

24. Digital/Interactive Agencies
Specialize in the development and strategic use of various digital marketing tools
Websites for the Internet
Banner ads
Search engine optimization
Mobile marketing
Social media campaigns
Relation to text: This slide relates to the content on page 101 of the text.
Summary Overview: This slide presents the role of digital/interactive agencies and lists some of the tasks and products handled by them.
Use of this slide: This slide can be used to show how with the rapid growth of the Internet and other forms of interactive media, a new type of specialized marketing communications organizations has evolved—the interactive agency. This slide can also be used to illustrate that interactive agencies specialize in the development and strategic use of various interactive tools, such as web sites, banner ads, CD-ROMs, text messages, search engine optimization, and kiosks. They also have expertise in digital technology elements, such as audio, video, special effects, animation, and database marketing.