1. Chapter 4 The Scope of Advertising: From Local to Global

2. Introduces the people and groups who work in advertising
Chapter Overview
Introduces the people and groups
who work in advertising

3. 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

4. The Advertising Industry: Organizations
Advertisers
Agencies
Suppliers
Media

5. The Advertising Industry: People
Most often employed by advertisers, not clients:
Research
Artists
Sales
Writers
Management
Photographers
Accounting
Musicians
Computer science
Performers
Legal
Cinematographers

6. 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

7. An ad for Rubio’s Baja Grill showcases its unique products
Advertisers: Local
An ad for Rubio’s Baja Grill showcases its unique products

8. Typical structure of small advertisers with high volumes of work
Advertisers: Local
Typical structure of small advertisers with high volumes of work

9. 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

10. Local Advertisers: Integrators
Direct Marketing
Sales Promotion
Integrated Approach
Public Relations
Media Advertising

11. 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

12. Advertisers: Regional and National
Top 10 advertisers in the U.S. Ranked by total U.S. advertising in 2008

13. Advertisers: Regional and National
Regional: one or several states
National: several regions or entire country

14. Advertisers: Regional and National
Comparison of national and local advertising

15. Centralized Department Structure

16. Decentralized Department Structure

17. 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

18. 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

19. Agencies: Defined Develop marketing & ad plans Agency Roles
Develop ads & promotions
Purchase ad space and time

20. Agencies: Types Reach Full Service Specialty Local National Regional
Global
Internatl
Full Service
Consumer
BTB
Specialty
Boutiques
Media Buyers
Interactive

21. Research, Acct planning
Agencies: People
Traffic Control
Administration
Media Management
Account Management
Other Services
Creative Concepts
Research, Acct planning
Production

22. 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

23. 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)

24. Agencies: Compensation
Fees
Fee-
commission
combination
Incentive system
Straight-fee
(retainer)
method

25. 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

26. Agencies: Client Relationships
Finding and Attracting New Clients
Referrals
Presentations
Solicitation
Community relations & networking

27. Client-Agency Relationship Stages
Development
Maintenance
Pre- relationship
Termination

28. Client/Agency Relationship Factors
Chemistry
Communication
The Four Cs
Conduct
Changes

29. Suppliers Art studios & web designers Printers & related specialists
Film & video houses
Research companies

30. Media Print Out-of-home Electronic Direct mail Digital interactive
Other

31. McDonald’s honors an Islamic observance
Media Around the World
McDonald’s honors an Islamic observance