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Organization of Advertising• Purpose is to communicate effectively• Five participants of IMC process1. Advertiser (Client)2. Agency3. Media organizers4. Marketing Communications Specialists
Direct Marketing AgenciesSales Promotion AgenciesInteractive AgenciesPublic Relations Firms
5. Collateral services providers
• One of the most important element
• Have product/services to offer
• Or some cause to market
• Is one of the final participant to decide about ad.
• Creates /produces/ place the ads. on media
• Different types of agencies
1. Full service agency
2. Account services
3. Marketing services
4. Creative services
• Basic Function is to provide
–Entertainment
–News
–Knowledge in such a way that it provides an environment to agency or advertisers to buy their time and place
•are • Direct marketing agencies
• Sales promotion agencies
• Contests/sweepstakes
• Interactive firms
• Develop websites
• Public relations firms
Services which are been provided to agencies and media organizers
Like vendors Printers etc.
Organizational Structure of Advertising • Three types of structures each have its own adv. &
disadv.– Central system – Decentralized system
• Separate marketing, sales, advertising and promotion departments for various product lines or businesses of the company. Often use product or brand management system
– In-house system
• Selection of system depends upon – Size of the orgz.– # of products – Role of ads in the whole process – budget
Procter & Gamble uses the brand management system
Basic function of manager in centralized system
• Planning and budgeting
• Administration and execution
• Coordination with other departments – Like makting research dept./sales dept./materials
regarding POP.
• Coordination with out side agencies and services– Media buying services/ collateral services agencies
etc.
• Advantages• Facilitated
communications• Fewer personnel required• Continuity in staff• Involvement of top
management/ experience is more
• Disadvantage• Some times lower level
staff can’t understand the over all mkting plan as the responsibility rests on top
• Longer response time• Inability to handle multiple
product line.
Client Organization For IMCThe Centralized System
Decentralized system or brand mangt. system
• Advantages• More flexible in term of
promotional programs• Centralized managerial
attention• Rapid response to the
problems.
• Disadvantage• Sometimes brand
mangers are at junior level lack of experience
• Brand manger may have less authority over the execution of plan which they have created.
• Misallocation of funds.
In-house system
Advantages
Cost saving
More control
Increased coordination
Disadvantage
Less experience
Less objectivity
Less flexible
No Fear uses an in-house agency
Source: Courtesy No Fear.
Role of Advertising Agency
Is a service organization that specializes in Developing Preparing and Executing the promotional programs
for its client.
Reasons for using an outside Agency
1. U get highly professional people to work for.
2. Artists /writers /singers/media analysis are normally attached with
3. Agencies are specialized in certain areas like consumer goods etc.
4. U can get an overall image of mkt. very easily against company policies /biases/limitations or we can say it provides us an insight to the industry. an agency may have personnel who have worked in some client related industries.
4 Types of Agencies
1. Full service agency• Involved in planning/creative
/producing/research/media selection and also in some non advertising services like
– Strategic mkting planning– Sales promotions– Sales training– Trade shows– Package design– Public relations programs – Publicity
Typical Full-Service Agency Organization
WritersArt Directors
Traffic
TVProduciton
Traffic
PrintProduction
VP CreativeServices
AccountExecutive
AccountSupervision
VP AccountServices
Media Research SalesPromotion
VP MarketingServices
Personnel Accounting Finance
OfficeManagement
VP Managementand Finance
President
Board ofDirectors
2.Account services
• Account management is to provide a link b/w client and agencies
• Normally a very experienced and professional person of marketing is involved in such type of arrangement.
3.Marketing services
• Have :• Research departments
– Who is the target audiences– Who is the ultimate consumers – Trends of industries – Consumers habits etc – Segment analysis etc.
• Media departments• Must have media profiles
4.Creative services
• Responsible for creating and executing ads.• Copy writers: r the personnel who
write ,headlines/subhead lines/body copy. May be involved in basic theme or the big selling idea of the promotional campaigns.
• May have diff. departments – Art department
• Prepare story board for TV
– Production dept.– Traffic dept.
Some more types of services
• Creative boutiques
– Provides only creative services. e.g. supreme with Shoaib Mansoor
• Media Buying Services– Some people only buy space in media and
sell to others
Agency Compensation • Diff. Forms of compensation• Commission from media
– 15% from media
• Fixed fee method • Fee-commission combination• Cost plus agreement
– Fee basis on the cost of its work
• Pay actual cost+profit margin• Incentive based • % charges normally 20-25 % when sub let or
purchase services from others.
Example of the Commission System
Why Agencies Lose Clients Poor performance Poor communication Unrealistic demands Personality conflicts Personnel changes Changes in size Conflict of interests Changes in strategy Declining sales Payment conflicts Policy changes
How Agencies Gain Clients
Referrals• Solicitations
– Making calls and following them• Presentation
– People ask agency to come and present itself.
Presentations
Public Relations
Image and Reputation
Awards competitions are a way for agencies to build their reputation
A promotional agency advertises its services