Transcript Chapter 4
Chapter 4 The Scope of Advertising: From Local to Global McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Overview Introduces the people and groups who work in advertising 4-2 Chapter Objectives Describe the various groups in advertising and their relationships Define the main types of ad agencies Examine factors that affect agency-client relationships Explain how advertisers organize Discuss how agencies get clients, make money Explain what people do in ad agencies Explain how the media and suppliers help Debate the pros/cons of an in-house agency 4-3 The Advertising Industry: Organizations Advertisers Agencies Suppliers Media 4-4 The Advertising Industry: People Most often employed by advertisers, not clients: Research Artists Sales Writers Management Photographers Accounting Musicians Computer science Performers Legal Cinematographers 4-5 Advertisers: Local Directed to customers in the same geographic area Franchisees and dealers Chain retailers Independent businesses Govt. & nonprofits 4-6 Advertisers: Local An ad for Rubio’s Baja Grill showcases its unique products 4-7 Advertisers: Local Typical structure of small advertisers with high volumes of work 4-8 Types of Local Advertising Product Institutional Classified Regular priceline, sale, or clearance Create favorable image, increase awareness, foster goodwill Recruit employees, offer services, sell merchandise 4-9 Local Advertisers: Integrators Direct Marketing Sales Promotion Integrated Approach Media Advertising Public Relations 4-10 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 4-11 Advertisers: Regional and National Top 10 advertisers in the U.S. Ranked by total U.S. advertising in 2008 4-12 Advertisers: Regional and National Regional: one or several states National: several regions or entire country 4-13 Advertisers: Regional and National Comparison of national and local advertising 4-14 Centralized Department Structure 4-15 Decentralized Department Structure 4-16 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 4-17 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 4-18 Agencies: Defined Develop marketing & ad plans Agency Roles Develop ads & promotions Purchase ad space and time 4-19 Agencies: Types Local National Regional International Global Reach Full Service Consumer BTB Boutiques Specialty Media Buyers Interactive 4-20 Agencies: People Account Management Traffic Control Administration Media Management Production Creative Concepts Research, Acct planning Other Services 4-21 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 4-22 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) 4-23 Agencies: Compensation Fees Feecommission combination Straight-fee (retainer) method Incentive system 4-24 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 4-25 Agencies: Client Relationships Finding and Attracting New Clients Presentations Solicitation Referrals Community relations & networking 4-26 Client-Agency Relationship Stages PreDevelopment Maintenance Termination relationship 4-27 Client/Agency Relationship Factors Chemistry Communication The Four Cs Conduct Changes 4-28 Suppliers Art studios & web designers Printers & related specialists Film & video houses Research companies 4-29 Media Print Out-of-home Electronic Direct mail Digital interactive Other 4-30 Media Around the World McDonald’s honors an Islamic observance 4-31