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  • The Advertising Business: Ad Agencies Roles, Structure & Functions Income Client Agency Relationship

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    Aiman
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    The document outlines the key players in advertising including advertisers, agencies, media, suppliers, and audiences. It describes the roles, structure, and functions of advertising agencies including account management, creative development, media planning, and studio production. The summary also discusses an agency's sources of income such as media commissions, other commissions, fee-commission combinations, and competency-based compensation systems.

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    218583144-Advertising-Business

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    The document outlines the key players in advertising including advertisers, agencies, media, suppliers, and audiences. It describes the roles, structure, and functions of advertising agencies including account management, creative development, media planning, and studio production. The summary also discusses an agency's sources of income such as media commissions, other commissions, fee-commission combinations, and competency-based compensation systems.

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    © All Rights Reserved
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    117 views21 pages

    The Advertising Business: Ad Agencies Roles, Structure & Functions Income Client Agency Relationship

    Uploaded by

    Aiman
    The document outlines the key players in advertising including advertisers, agencies, media, suppliers, and audiences. It describes the roles, structure, and functions of advertising agencies including account management, creative development, media planning, and studio production. The summary also discusses an agency's sources of income such as media commissions, other commissions, fee-commission combinations, and competency-based compensation systems.

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    © All Rights Reserved
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    of 21

    The Advertising Business

    Ad Agencies
    Roles, Structure & Functions
    Income
    Client Agency Relationship

    1
    The Key Players
    • Uses advertising to send
    • Advertiser out a message about its
    (client) products
    • Initiates the advertising
    • Agency effort by identifying a
    marketing problem
    • Media • Approves audience, plan
    and budget
    • Supplier • Hires the advertising
    • Audience agency
    The Key Players
    • Advertiser • Has strategic and
    creative expertise,
    (client) media knowledge,
    workforce talent, and
    • Agency negotiating abilities
    – Advertising
    • Media department
    – In-house agency
    • Supplier
    • Audience
    The Key Players
    • Advertiser • The channels of
    communication that carry
    (client) the message to the
    audience
    • Agency • Are also companies or
    huge conglomerates
    • Media • Mass media advertising
    can be cost effective
    • Supplier because the costs are
    spread over the large
    • Audience number of people the ad
    reaches
    The Key Players
    • Advertiser • Assist advertisers,
    agencies, and the
    (client) media in creating and
    placing the ads
    • Agency • Vendor services are
    • Media often cheaper than
    those in-house
    • Supplier
    • Audience
    The Key Players
    • Advertiser • The desired audience for
    the advertising message
    (client) • Data-gathering
    technology improves
    • Agency accuracy of information
    about customers
    • Media • Advertisers must
    recognize the various
    • Supplier target audiences they are
    talking to and know as
    • Audience much about them as
    possible
    Why an Ad Agency?
    • Branding as a concept developed
    • Brands are assets
    • Advertising function required specialized
    skill sets
    • Intra-organization bias could be reduced
    • Outsourcing was viewed as a cheaper
    option

    7
    Agencies:
    Roles

    Develop marketing & ad plans

    Agency
    Develop ads & promotions
    roles

    Purchase ad space and time

    8
    Structure of a decentralized department

    Corporate

    Consumer Products Industrial Products International


    Division Division Division

    R& D Manufacturing Marketing Marketing Services

    Sales Promotions
    Brand Mgr
    Package Design
    Ad Agency
    Merchandising
    Brand Mgr
    Ad Agency
    Brand Mgr 9
    Ad Agency
    Structure of an Ad Agency

    Agency Head

    Client Account Creative Media Studio/ HR Finance


    Servicing Planning
    Creative Production
    dir.
    Acc.Dir
    Traffic

    Art Copy
    Acc.
    Sup.

    Acc. Planners Buyers


    Exec
    10
    Functions of different roles

    • Account Management
    • Otherwise called client servicing department
    • Liaison between the client and the agency
    • Understand client needs and translate company briefs
    into creative briefs
    • Create advertising opportunities for the agency
    • Ability to manage tough timelines

    Brand Manager Acc. Ex/Mgr Creatives

    Media Planner Studio/Production 11


    Functions of different roles

    • Research & Account Planning


    • Finds out market trends, media trends
    • Provides insights consumer needs and lifestyles
    through primary research
    • Helps in better connecting the brand to its T.A.
    • Decides on how the tone and language should
    be

    12
    Account
    Planner’s
    research is
    involved
    - visual &
    headline

    13
    Functions of different roles

    • Creatives
    • Ideates and designs ad campaigns by
    interpreting Acc. Planners insights and client’s
    needs
    • Develops ideas on the positioning and makes it
    interesting, true, and simple
    • Produce print ads, TVCs, packaging designs,
    POP designs, direct mailers etc
    • Copywriters, art directors, and graphic designers
    14
    15
    Functions of different roles

    • Studio/Production
    • Buying for print ads: type, photos, illustrations,
    printers, engravers
    • Work on approved copy and visuals, scripts,
    storyboards, DM kits
    • Use actors, camera operators, and production
    specialists

    16
    Functions of different roles

    • Media Planning and Buying


    • Determine how a client’s message can most
    effectively and efficiently reach the T.A.
    • Building media plans and budget optimization
    • Tough negotiation and attention to details
    • In-depth knowledge of T.A. media habits,
    geographic market dynamics, and product
    market potentials

    17
    Agency’s income
    • Media Commissions

    Agency
    Ad rate bills client
    card full ad Rs.15,000
    price: Agency amount: difference
    Rs.100,000 buys ad Rs.100,000 Is kept
    at 15% By the
    discount: agency
    Rs.85,000

    18
    Agency’s income
    • Other Commissions
    • Markups – 17.65% on the invoice from
    outside suppliers

    Agency
    Agency
    bills for
    buys Agency
    materials
    materials Materials bills
    plus a
    for cost Rs.10,000
    17.65% which is
    campaign Rs.8,500
    markup costs plus
    markup
    19
    Agency’s income
    • Fee-commission combination
    • Basic monthly fee + media commissions
    • Straight-fee or retainer fee
    • Charges all services together on hourly or
    monthly basis
    • Incentive system
    • Compensation depends on campaign’s goal
    attainment
    • Eg: DDB Needham has a grade point scale to
    evaluate campaigns 20
    Agency’s income
    • Competency-based system
    • Followed by Leo Burnett, Lintas, and a few
    others, which links agency remuneration to
    sales figures
    • Can be a serious hindrance to brand-
    building advertising

    21

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