Transcript Chapter 1
Advertising Agencies 1 EXH 2-24 2 Ad Agencies: Combining Marketing and Advertising Giving Product a Personality Setting Product Apart from Competition Ad Agency Add Perceived Value to Product of Client by: Creating Image of Product Communicating Basic Information 3 How Agencies are Organized Internal Service Account Planning & Research Account Management 5 Areas of Importance Creative Development & Production Media Planning & Buying * Departmental system vs. Group system 4 Agency Department System President Vice President Account Services Account Supervisor Account Executive Account Executive Account Supervisor Vice President Creative Services Vice President Marketing Services Vice President Management Services Art / Copy Media Accounting Production Research Purchasing Personnel 5 Agency Group System Agency Management Group 1 Management Director Account Service Group 2 Management Director Creative Director Media Planning Group 3 Management Director Market Research 6 EXH 2-20 7 Why Agencies Lose Clients Poor performance or service Poor communication Unrealistic demands by client Personality conflicts Personnel changes Changes in size of client or agency Conflicts of interest 8 Perceptions of Involvement: Who Set Strategy? Agency Marketer 6% 17% 10% 15% 84% Marketer Agency Both Marketer Agency 68% Both 9 Perceptions: What Is the Agency’s Role? Marketer 30% 23% 5% Partner Creative Leader Architect Agency 11% 4% Teammate 24% 9% Teammate Integrator Integrator 15% Creative Leader Architect Specialist Specialist 3% Partner 25% 29% 22% 10 How Clients Compensate Agencies 80% 70% 60% 50% Commissions 40% 30% 20% 10% Fees 0% Commissions 1982 Combination Combination Fees 1997 11 Trends in Methods of Agency Compensation (in percentages) Year 1986 1989 1992 1994 1997 Commission Traditional 15% Not 15% 43 24 35 29 33 26 14 45 9 26 Labor-Based Fee 30 24 32 35 53 Other Systems 3 12 9 7 12 SOURCE: Data from the Association of National Advertisers. 12 10 Principles for Building a Better Relationship with Your Agency Inculcate a spirit of partnership. Be wary of change for change’s sake. Make sure your agency is making a fair profit on your account. Make the agency totally absorbed in the company’s product, the people, and the corporate culture. Create an environment of experimentation and be prepared to pay for failure. 13 10 Principles for Building a Better Relationship with Your Agency Treat the agency people well. Agree on a clearly defined obj. for adv. Keep approvals simple, disapprovals kind. Make the agency responsible for the advertising and give it the authority it needs to be responsible. Give the agency a formal evaluation every year. 14