1. Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communication Organizations
McGraw-Hill/Irwin

2. Participants in the IMC Process
Advertiser (Client)
Advertising agency
Direct-response agencies
Sales promotion agencies
Media organizations
Marketing communications specialist organizations
Public relations firms
Interactive agencies
Collateral services

3. Organizing for Advertising and Promotion
The way a company (the client) organizes depends on
Its size
The number of products it markets
The role of advertising and promotion in the marketing mix
The budget
Its marketing organization structure

4. Advertising Dept. Under Centralized System
President
Production
Finance
Marketing
Research and develop-ment
Human resources
Marketing research
Advertising
Sales
Product planning

5. Pros & Cons of a Centralized System
+ Positive
- Negative
Better
communications
Less goal
involvement
The
Centralized
System
Fewer
personnel
Longer
response time
Continuity
More top management involvement
Impractical for
multiple brands, products, divisions

6. Decentralized Advertising System
Corporate
Human Resources
Production
Finance
Marketing
R & D
Product Management
Marketing services
Sales
Brand Manager
Ad agency
Advertising Dept
Marketing Research
Sales promotion
Brand Manager
Ad agency
Package design
Merchandising

7. Pros & Cons of Decentralization
+ Positive
- Negative
Ineffective decision making
Concentrated
attention
Internal conflicts
The
Decentralized
System
Rapid problem
response
Unequal distribution of funds
Increased
flexibility
Lack of
Authority

8. Pros & Cons of In-House Agencies
+ Positive
- Negative
Cost
savings
Less
experience
The
In-house
Agency
More
control
Less
objectivity
Better
coordination
Less
flexibility

9. Reasons for using an ad agency
The Ad Agency’s Role
Reasons for using an ad agency
Highly skilled specialists
Specialization in a particular industry
Objective viewpoint of the market
Broad range of experience

10. Ad Agencies Have Skilled Specialists
Artists
Writers
Researchers
Photographers
Media Analysts
Other Skills

11. Full-Service Agencies
Planning advertising
Full range of marketing communication and promotion services
Performing research
Creating advertising
Selecting media
Producing advertising
Interactive capabilities
Strategic market planning
Nonadvertising services
Sales promotions
Package design
Direct marketing
Public relations and publicity

12. Typical Full-Service Agency Organization
Writers
Art directors
TV production
Traffic
Print
production
Account Executive
Account supervision
VP account
services
Media
Research
Sales Promotion
VP marketing
Personnel
Accounting
Finance
Office
management
VP management
and finance
President
Board of
directors
VP creative services

13. Services Provided by Agencies
Agency Services
Research department
May include account planners
Media dept. obtains media space, time
Marketing Services
The link between agency and client
Managed by the account executive
Account Services
Creation, execution of ads
Copywriter artists, other specialists
Creative Services
Accounting
Finance
Human resources
New business generation
Mgmt & Finance

14. The Role of Creative Boutiques
Provide only creative services
Full-service agencies may subcontract with creative boutiques
Creative boutiques developed in response to some clients’ desire to use only the creative talent of an outside agency while maintaining other functions internally. Clients seek the help of creative boutiques when an extra creative effort is required, or because its own employees do not have sufficient skills. They can be used in these ways:
By client companies for creative services only
Full service agencies may subcontract for their creative services when busy or when not wanting to add permanent employees
Other functions such as advertising planning, research and media buying may be done internally within the company or contracted out
Use of slide This slide can be used to explain the role of creative boutiques in planning an IMC program. They usually are hired for their creative talent and are paid on a fee basis. They can be hired directly by a company for their specialized services, or by a full service agency when they are very busy or do not want to hire full-time employees.
Ability to turn out inventive creative work quickly

15. Media Buying Can be Specialized
Media Specialist Companies
Specialize in buying media, especially broadcast time
Agencies and clients develop media strategy
The task of purchasing advertising media has grown more complex as specialized media proliferate. Media buying services have found a niche by specializing in the analysis and purchase of advertising time and space. Agencies and clients usually develop their own media strategies and hire independent buying services to execute them. Some of the characteristics of media specialist companies include:
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
Use of slide This slide can be used to show the role of media buying services. Their use is growing as more companies look for ways to get more clout from their advertising budgets.
Media buying organizations implement the strategy and buy time and space

16. Methods of Agency Compensation
Commissions
from media
Compensation
Methods
Fee, cost, and incentive-based systems
Percentage
charges

17. Personnel hours charged
Evaluating Agencies
Financial Audit
Qualitative Audit
Verify costs, expenses
Personnel hours charged
Payments to media
Payments to suppliers
Planning
Program development
Implementation
Results achieved

18. Top Agency Value-Add Activities
Integrated disciplines & functions
New media guidance, solutions
Creative ideas
Brand driver evaluation
Collaboration
Talented people
Ideas/programs for multi comm. programs

19. Why Agencies Lose Clients
Poor
performance
communications
Unrealistic
Client demands
Personality
conflicts
Declining
sales
Payment
conflicts
Policy Changes
Personnel
changes
Changes
in size of client or agency
Conflicts of
interest
Change in client’s strategy

20. How Agencies Gain Clients
Referrals
Presentations
Solicitations
Public Relations
Image, Reputation

21. Direct-Marketing Agency Activities
Agencies
Database
management
Media services
Direct
mail
Creative
Database development, management
Research
Production

22. Direct-Marketing Agency
Departments in a typical direct-marketing agency
Account management
Creative
Media
Database development and management

23. Sales Promotion Agencies
Promotional planning
Creative research
Tie-in coordination
Fulfillment
Premium design and manufacturing
Catalog production
Contest/sweepstakes management

24. Functions Performed by Public Relations Firms
Strategy
development
Generating
publicity
Lobbying
Public
affairs
News releases, communication
Research
Managing crises
Coordination with promotional areas
Special events

25. Functions Performed by Interactive Agencies
Web
banner ads
CD-ROMs
Interactive Media Creation
Web sites
Text messages
Kiosks
Search engine optimization

26. Marketing Research Companies
Help clients under- stand target audience
Qualitative research
Quantitative studies

27. Pros and Cons of Integrated Services
+ Positive
- Negative
Greater synergy
Budget politics
Integrated Services
Convenience
Poor communication
Single image for product or service
No synergy

28. Obstacles to Implementing IMC
Key obstacles
Lack of people with the broad perspective and skills to make it work
Internal turf battles
Agency egos
Fear of budget reductions
Ensuring consistent execution
Measuring success
Compensation