Chapter 5 the advertising agency media services and other services
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Chapter 5 The Advertising Agency, Media Services, and Other Services. Objectives_1. Understand The agency The history of the agency business The full-service agency Global advertising agencies. Objectives_2. Understand Agency and client relationships Forms of agency compensation

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Chapter 5 the advertising agency media services and other services

Chapter 5 The Advertising Agency, Media Services, and Other Services


Objectives 1

Objectives_1

Understand

  • The agency

  • The history of the agency business

  • The full-service agency

  • Global advertising agencies


Objectives 2

Objectives_2

Understand

  • Agency and client relationships

  • Forms of agency compensation

  • Other advertising services


Agency challenge

Agency Challenge


Advertising red books directory of agencies

Advertising Red Books: Directory of Agencies

  • Company name

  • Annual billings

  • Company address

  • Breakdown of billings by media

  • New accounts

  • Key personnel

  • Number of employees

  • Branch offices

  • Specializations


How agencies developed

How Agencies Developed

The Early Age

The No-Rebate Age

The Age of Negotiation

The Reengineering Age

Media and the Digital Age


The early age colonial times to 1917

Space salesman

Space wholesalers

First rate directory

Shift to creative center

Agency-client relationship

Curtis No-Rebating rule

Standard commissions

AAAA founded

The Early Age (Colonial Times to 1917)


American association of advertising agencies founded 1917

American Association of Advertising Agencies founded 1917


The no rebate age 1918 to 1956

The No-Rebate Age (1918 to 1956)

  • Radio

  • Television

  • Electronic Data Processing


The age of negotiation 1956 to 1990

The Age of Negotiation (1956 to 1990)

  • Consent decrees stopped no-rebating provisions

  • 15% commissions remained but total compensation became an issue


The reengineering age 1990 to 2000

The Reengineering Age (1990 to 2000)

  • Mergers created giant communication

  • Integrated services became a buzz phrase

    • Advertising

    • Public relations

    • Package design

    • Web design

    • Sponsorship

    • And more….


Media and the digital age since 2000

Media and the Digital Age (Since 2000)

  • Agency holding companies

  • Media services agencies

  • Global clients

  • Interactive agencies


The full service agency

The Full Service Agency

A full-service agency is one that handles planning, creation, production, and placement of advertising (and other aspects of IMC) for its clients.


The agency process for new clients

The Agency Process for New Clients

Diagnosing the Marketing and Brand Strategy

Setting Objectives and Developing Strategy

Creating the Communication

Notify Trade of Forthcoming Campaign

Billing and Payments


Creating the communication

Creating the Communication

  • The Media Plan

  • The Total Plan

  • Evaluation Plan


Exhibit 5 4 organizational structure

Exhibit 5.4 Organizational Structure


Exhibit 5 5 typical team responsibilities

Exhibit 5.5 Typical Team Responsibilities


Jay chiat on agency reengineering

Jay Chiat on Agency Reengineering…

“We believe the hierarchical structure [of the traditional agency], if not obsolete at present, is on its way. The traditional pyramid is about personal power and focuses on how to run a business. Most of the decisions are about the organization’s needs—fiscal and administrative issues. An agency is a service organization whose sole existence depends on satisfying client needs.”


Agency life

Evolution of agencies

Specialization

Size

Competing accounts

Client-agency relationship length

Agency of record

Multiple offices

Global representation

Agency networks

Agency Life


Jwt s global agency network

JWT’s Global Agency Network


Coca cola creates a global dialogue

Coca-Cola Creates a Global Dialogue


Mega agency holding companies

Mega-Agency Holding Companies

Interpublic’s network includes 33 full-service advertising agencies from 87 agencies in the communications and marketing industries.


Top 5 mega conglomerates

Omnicom Group

WPP Group

Interpublic Group

Publicis Groupe

Dentsu

Top 5 Mega Conglomerates


Other advertising services

Other Advertising Services

  • Talent and production agencies creating creative

  • Independent creative services

  • A la carte agencies

  • In-house agency

  • Rolodex agency

  • Media buying services

  • In-house media services


Exhibit 5 10 created by broyhill s in house agency

Exhibit 5.10 Created by Broyhill’s In-House Agency


Forms of agency compensation

Forms of Agency Compensation

  • Media commissions

  • Production commissions or markups

  • Fee arrangements

  • Performance fees


Other services

Other Services

Research

Barter

Managing

integration


For discussion

For Discussion

  • What is a full-service agency?

  • Explain the organization of a global agency network.

  • What is an agency of record?


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