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2. The Ad Industry. Objectives. Know Current Intustry Trends Industry Structure Role of Agencies/Compensation Identify External Players Role of Media Conglomerates. Trends Affecting the Advertising & Promotion Industry. The “Undoing” of Agency Consolidation & Globalization

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The Ad Industry

objectives
Objectives
  • Know Current Intustry Trends
  • Industry Structure
  • Role of Agencies/Compensation
  • Identify External Players
  • Role of Media Conglomerates
trends affecting the advertising promotion industry
Trends Affecting the Advertising & Promotion Industry
  • The “Undoing” of Agency Consolidation & Globalization
  • Media Proliferation & Consolidation
  • Media Clutter & Fragmentation
  • Consumer Control: e-Search, Blogs & DVRs (e.g.,TiVo)
the worldwide advertising industry
The Worldwide Advertising Industry

U.S expenditures:

  • >$250 billion

Global expenditures:

  • $550 billion
advertisers
Advertisers

Manufacturers & Service Firms

  • Procter & Gamble, MCI
  • Trade Resellers
  • Sears, McDonald’s
  • Government
  • Federal, State, Local
  • Social Organizations
  • United Way, Nature Conservancy
the role of the advertiser in ibp
The Role of the Advertiser in IBP
  • Describe the value that the firm’s brand provides
  • Describe the brand’s position in the market Describe the firm’s objectives for the brand in the near-term & long-term
  • Identify the target market(s) that are most likely to respond favorable to the brand
  • Identify & manage the supply chain/distribution system that will most effectively reach the targets
  • Be committed to using advertising & other promotional tools to grow the brand
agencies
Advertising Agencies:

Full-Service

Creative Boutique

Interactive

In-House

Media Specialists

Promotion Agencies

Direct Marketing

Promotion Agencies:

Direct Marketing/ Database

E-commerce

Sales Promotion

Event Planning

Design Firms

Public Relations Firms

Agencies
full service agency services
Full Service Agency Services
  • Account Services
  • Marketing Research Services
  • Creative & Production Services
  • Media Planning & Buying Services
  • Administrative Services
agency compensation
Agency Compensation
  • Commissions: around 15% of airtime fees—in flux
  • Markup Charges: production cost + fixed %
  • Fee Systems: hourly rates, or by project
  • Pay-for-Results: tightly-specified objectives
external facilitators
External Facilitators
  • Marketing & Advertising Research Firms
  • Consultants: Creative, Media, Database
  • Production Facilitators
  • Software Firms: web tracking, fulfillment
media organizations
Media Organizations
  • Broadcast
    • TV, radio
  • Print
    • Magazines, direct mail, newspapers
  • Interactive Media
    • CD-ROMs, online shopping
  • Support Media
    • Outdoor, directories, Sponsorship
  • Media Conglomerates
    • AOL Time Warner, Viacom, AT&T
target audiences
Target Audiences
  • Household consumers
  • Businesses
  • Professionals
  • Government Organizations
review s
Review/?s
  • Know Current Industry Trends
  • Industry Structure
  • Role of Agencies/Compensation
  • Identify External Players
  • Role of Media Conglomerates