Role of Advertising Agency
Role of Advertising Agency
The major role as advertising agency is to work alongside the clients to develop and sustain the
brands that they mutually serve, through consumer understanding and insight and through creative
and media delivery skills to provide best advice and the best execution thereof to those clients for
the advertising of those brands.
Buildings age and become dilapidated. Machines wear out. People die. But what live on
are the brands.
Brands are much more than mere products and services. Brands, if successful, are clearly
differentiated entities with which consumers can and do form a mutually beneficial relationship over
time, because of the values rational and emotional, physical and aesthetic that consumers
derive from them. The importance can be summed up as follows:
A product is something that is made, in a factory: a brand is something that is bought, by
a customer. A competitor can copy a product; a brand is unique. A product can be quickly
out-dated; a successful brand is timeless.
The role of advertising and the advertising agency is to help effect this transformation from product
or service to brand by clearly positioning the offering to the consumer its role and its benefits
and by communicating the brands own personality. In short its role is to provide meaningful
differentiation via the consumer connection.
As one wise head in advertising once said, nothing kills a bad product faster than good
advertising. Typically advertising is playing this role, along with other parts of what we call the
marketing mix, in highly competitive market places.
Most advertisers assign this job of informing the target audience and creating images to advertising
agencies. Thus, the advertising agencies plan, prepare and place ads in the media. But even an
advertiser can do all these things. The management can do planning of ad campaigns. For
preparing ads, creative personal can be hires. And the advertiser for placing the ads can buy media
space or time. So, why hire an advertising agency?
The reason can be enlisted as follows:
Expertise and experience- An advertising agency brings together people with the
required expertise and experience of the various sub-disciplines of advertising. Thus, it has
the copywriters, visualizes, researchers, photographers, directors, planners and people
who get business and deal with clients working in ad agencies. An agency moulds all these
people into a team and gives them a highly conducive work atmosphere. The agency
makes the best use of their talents and experience to deliver rapidly, efficiently and in
greater depth than a company or organization could do on its own.
Objectivity and professionalism- Advertising agencies are highly professional.
Objectivity is a major virtue of ad agency. They operate in a strange way. While they take
up advertising for others, agencies hardly advertise themselves. Ad agencies being outside
intermediaries can be objective. They thus will offer independent and detached viewpoints
and suggestions based on objective analysis.
Cost effective- If an organization wants to hire people to do its advertising, it can not
provide them work all through the year. Also most experts in the fields of advertising like
directors, musicians, photographers, charge huge amounts and are often not affordable.
Moreover, hiring, organizing and managing all talents required to produce advertising
campaigns is not an easy thing. And the fact that 98% of advertisers the worlds over hire
as agencies is proof enough about the cost effectiveness of the agencies. Also the kind of
consistent, powerful and compelling advertising that can be created by using the expertise,
experience, objectivity and professionalism of ad agencies cannot be measured
economically.
Talent & Creative productions: The basic function of an Ad Agency is providing talent.
The creative efforts of the art director, the detailed analysis of the research director and the
political understanding of the campaign director, are just a few examples of the many
abilities of Ad Agency personal have to offer. A business organization or person will
contract the services of an ad agency to help market a product. This function involves
processing the information collected from the client and through research and designing
communication material in the form of advertisements and other publicity material. This
also includes planning creative strategies, copy or script writing, visualization, designing,
layout, shooting of films, editing, giving music, etc.
Research: The second function of an Ad agency is research. In order to distribute the
message to the public successfully, the agency must first know all that it can about the
product. One of the first jobs is to research the product and the company, one must learn,
one possibly can about both. The research must even take one close to the heart of the
firms inner operations. Ad agencies use research as a tool to test consumer reactions to
products and services.
Distribution & Media planning: The third important function of an ad agency is
distribution. Here you decide what type of message you will create for the company and
what media will be most helpful in sending this message to the public. On the basis of the
media habits (access and exposure) of the target audience, agency people prepare a
media plan. This plan includes which media to be used, which part of the media to be
used, when to place the ads and for how long to place the ads, etc. media planners keep
track of the viewer ship, listener ship and readership of all kinds of media.
Monitoring Feedback: By monitoring consumer feedback, a decision on whether to revise
the message, the medium, the target audience or all of them can be made. Ad agencies
are developing to reach the target audience. As information is the backbone of all
advertising, to prepare ads, one requires information about the product, its competitors, the
market situation and trends, information about the audiences (their likes and dislikes and
media habits) also need to be collected. Some of the most effective advertising includes
advertisement written in their native language. All of these specialized campaigns are
creating new demands on agencies and are requiring new talents for people who work in
advertising.
In addition, many agencies also offer a variety of allied services. These include:
Merchandising
Public relations
Organizing exhibitions and fairs
Typical ad agency clients include businesses and corporations, non-profit organizations and
government agencies. Agencies may be hired to produce television commercials and radio
commercials as part of an advertising campaign.
electronic channel that an advertiser's message can be seen or heard from. The 'digital space'
translates to the Internet, kiosks, CD-ROMs, DVDs, and lifestyle devices (iPod, PSP, and mobile).
Interactive agencies function similarly to advertising agencies, although they focus solely on
interactive advertising services.
The recent boost in the interactive agencies can also be attributed to the rising popularity of webbased social networking and community sites. The creation of sites such as MySpace, Facebook
and YouTube have sparked market interest, as some interactive agencies have started offering
personal and corporate community site development as one of their service offerings. It still may be
too early to tell how agencies will use this type of marketing to monetize client ROI, but all signs
point to online networking as the future of brand marketing and Interactive being the core of
Brand's Communication and Marketing Strategy.
Search engine agencies
Lately, pay per click (PPC) and search engine optimization (SEO) firms have been classified by
some as 'agencies' because they create media and implement media purchases of text based (or
image based, in some instances of search marketing) ads. This relatively young industry has been
slow to adopt the term 'agency', however with the creation of ads (either text or image) and media
purchases, they do technically qualify as 'advertising agencies'.
Social media agencies
Social media agencies specialize in promotion of brands in the various social media platforms like
blogs, social networking sites, Q&A sites, discussion forums, microblogs etc. The two key services
of social media agencies are:
Promotional education - education and training materials tied to the promotion of a given
product or therapy
Continuing medical education - accredited education and training materials created for
continuing physician and medical professional education.
AGENCY COMPENSATION
Agency agencies may be compensated in diverse ways including:
B. Fee, Cost and Incentive-based Systemsin situations where on earth billings are low,
and/or the client does not wish to recompense a direct commission, an agreement may be reached
within which the agency is compensated in the opening of a fee, cost-plus or incentive-based
compensation system.
1. Fee arrangements are of two types: a fixed-fee method where on earth the agency
charges a basic monthly allowance for all of its services and credits to the client any medium
commissions earned. Under a fee-commission combination the medium commissions received by
the agency are credited against the fee. If commissions are smaller number than the agreed-on
fee, client must label up the difference.
2. Cost-plus agreementunder this compensation method the client agrees to pay the
agency a
payment based on costs of its work plus some agreed-on profit side-line. This system requires the
agency to keep detailed store of costs incurred in working on a clients tale.
C. Percentage Chargeswhen agencies purchase services from other outside agencies they
typically supply a percentage in the form of a markup charge as their compensation. These
markups usually list from 17.65 to 20 percent.
Agency compensation is the amount that an insurance company pays the agency to "write/sale" its
product.
The amount of commission varies from company to company and product to product. This
compensation is determined by your company contract.