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Advertising Agencies and their Functions. Why do I need their help?. Why Employ an Advertising Agency?. Specialized Services and Help i.e., professionals Negotiation Skills with the Media Coordination of Advertising and Marketing Efforts.

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Presentation Transcript
why employ an advertising agency
Why Employ an Advertising Agency?
  • Specialized Services and Help i.e., professionals
  • Negotiation Skills with the Media
  • Coordination of Advertising and Marketing Efforts
what are the negatives of going outside the firm for ad support
What are the Negatives of Going Outside the Firm for Ad Support?
  • lack of control
  • small company size may yield neglect
  • agencies can be inefficient in buying media
  • agencies are often compensated through a commission system the rewards high cost purchases
role of the advertising agency
Role of the Advertising Agency
  • creative services
  • media services
  • research services
  • account management
agency compensation
Agency Compensation
  • Commissions from Media Purchases
    • 15% initially
    • can be lowered to 10% after first $10 million is spent
  • Hourly Fees
  • Markups on Cost of Services and Media
media functions
Media Functions
  • Media Planners
    • perform strategic functions: when, where, frequency
  • Media Buyers
    • negotiate best prices, keep up to date info on audience profiles
    • availability and costs researched
vehicles vs media
Vehicles vs. Media
  • Media
    • general channels of communication
    • i.e., newspapers, magazines, TV, radio
  • Vehicles
    • specific placement choices
    • i.e., Roseanne, ER, Seinfeld, Vogue, NPR programming
major media categories
Major Media Categories
  • TV
  • Radio
  • Newspapers
  • Magazines
  • Out-of-Home
the print media

The Print Media

Why Should I Spend My Money Here?

what are my options
What Are My Options?
  • Magazines
    • examples: Good Housekeeping, Time, Life
  • Newspapers
    • Local: The Tennessean
    • National: The Wall Street Journal
magazines advantages
Magazines- Advantages
  • Flexibility in readership- regional, national interest areas
  • Color - excellent reproduction of high quality
  • Authority and Credibility - can include alot of information as well as glitter
  • Permanence - longest shelf life of all outlets
  • Prestige - image of the magazine rubs off on the product!
more advantages
More Advantages
  • Audience Selectivity - most targeted option available to marketers
  • Selling Power - results have been documented
  • Cost Efficiency - minimized wasted coverage
  • Reader Loyalty
  • Pass-Along Circulation
magazines disadvantages
Magazines - Disadvantages
  • Inability to deliver mass audiences
  • Long Lead Times
  • Clutter
  • High CPM
  • Declining Circulations
  • Frequency Problems
  • Shallow Geographic Coverage
circulation factors
Circulation Factors
  • Guaranteed Circulation - number expect to circulate
  • Primary Circulation - number people buy through subscription or newsstand
  • Secondary or Pass along - give it away!
circulation
Circulation
  • Paid Circulation
    • must pay the subscription price to receive the magazine
  • Controlled Circulation
    • receive if can have an influential role for the advertised products
newspaper advertising
Pros

Mass Medium

Comprehensive Scope

Geographic Selectivity

Timeliness

Credibility

Selective Attention

Creative Flexibility

Active Medium

Cons

Lack of Selectivity

Short Life Span

Low Production Quality

Clutter

Must pay for preferred position to guarantee placement

Overlapping Circulation

Newspaper Advertising
types of newspaper ads
Display Advertising

includes copy, illustrations, photographs, graphics, etc.

Classified Ads

copy only

Co-op Advertising

share responsibility between channel members

Public Notices

Preprinted Inserts

sales promotions, coupons, contests, etc.

Types of Newspaper Ads
out of home
Out-of-Home
  • Oldest Form of Advertising - often referred to as ‘outdoor advertising’
  • Delivery Modes include: billboards, blimps, transit ads, etc.
  • Expenditures are approaching $1.7 billion
billboards
Pros

Poster Panels vs. Painted Bulletins

Panels are silk screened - ranging in size from 6’2” by 12’’2” to 12’3” by 24’6”

Painteds- directly painted and leased for 1-3 years

broad reach/high frequency

Geographic Flexibility

Low CPM

Can be a last reminder for products like fast food, shopping venues, etc.

product identification is easy!

Billboards
out of home negatives
Out-of-Home Negatives
  • nonselectivity
  • minimal exposure time
  • difficulty in measuring audience
  • environmental concerns
  • limited use of copy
the broadcast mediums
The Broadcast Mediums
  • Television
    • cable
    • network
    • National vs. Local
  • Radio
    • FM
    • AM
    • National vs. Local
television
Television
  • Broadcast TV (Network) - 1100 Stations
    • UHF
    • VHF
  • Cable TV
    • Examples: BET, CNN, MTV, superstations
  • Who’s Advertising Here?
    • Proctor and Gamble
    • GM, Philip Morris
television advantages
Television Advantages
  • reach the masses
  • can be both local or national
  • most dramatic form of advertising
  • best suited for products that require demonstration or stimulation of emotion
more tv advantages
More TV Advantages
  • Prestige
    • highly visible firms use this medium
  • Impact
    • immediacy, demos, sound and color interaction
  • Creativity
  • Some Selectivity
  • Low Cost
disadvantages of tv
Disadvantages of TV
  • Very High Cost of Production
  • Media Time at a Premium
  • Selectivity and targeting Difficult
  • Brevity of Message
  • Clutter
  • Zipping and Zapping
pros and cons of cable tv
Selectivity

Younger, more affluence audience, more innovative

Very low cost

Flexibility

time for infomercials

Testability

Limited Reach

Fragmentation

Quality

Zipping and Zapping

Pros and Cons of Cable TV
types of tv advertisements
Types of TV Advertisements
  • Network Advertising
    • 4 major networks, erosion of audiences
    • convenient and efficient coverage
    • can buy spots , participations or sponsor
  • Cable Advertising
    • interconnect for regional coverage
    • syndicated programs, infomercials
  • Local TV Spots
how do i buy tv
How Do I Buy TV?
  • Dayparts
    • decide on the time of day to air commercial
    • viewing highest during primetime
    • must choose vehicle
  • Dayparts
    • Daytime 9 a.m. - 4 p.m..
    • Late Fringe 11:00p.m. - 1:00 a.m.
    • Remainder Early Fringe
radio
Radio
  • Who Listens? 96% of U.S. population
    • Youth the greatest audience!
    • Often a distraction or background noise
  • FM or AM
    • AM audiences growing faster than FM
    • Talk Radio!
pros and cons of radio
Image Transfer

Selectivity

Cost Efficient

Timely Medium

Geographically Flexible

Reach and Frequency

listen average 3x a day

No Visuals!

Segmented Audiences over Stations with Similar Formats

Distraction

Clutter

Push Button!

Pros and Cons of Radio
buying radio time
Buying Radio Time
  • Networks
    • lack of flexibility and choice of stations
    • national coverage
  • Local Radio
    • spots: live or taped
    • local personalities can assist in credibility
    • Dayparts: Morning and Evening Drive Time Desirable (6-10 a.m.; 3-7 p.m.)
interactive advertising media
Interactive Advertising Media
  • Entails reciprocal behavior
  • CD-Rom
  • Virtual Reality
  • The Internet
  • Interactive 800 numbers
  • Kiosks
alternatives for the interactive soul
Alternatives for the Interactive Soul
  • CD-Rom - limited by households with the PC capability great for tourism
  • Virtual Reality - can visualize the product and its demonstration in 3D
  • Internet - growing access to the WEB - can promote products, catalogs, firms here to catch surfers
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