2. the first advertising agents
1843 volney palmer
agent for media, not advertisers
1864 - george p. rowell
“the johnny appleseed
of advertising”
Rowell’s American
Newspaper Directory
space wholesaler
shared his “secret”
1888 - “Printer’s Ink”
3. the first advertising agency
n.w. ayer & son
founded in 1864 by
francis w. ayer, 20
“& son” made the
business seem more
established
worked for advertiser
slogan - “keeping
everlastingly at it
brings success.”
4. 4 full-service agency functions:
today, “full-service” agencies
provide the following:
account management
creative
media planning and media
placement (media buying)
research
many adding “below the line”
services - PR, sales promotion,
Interactive
5. major types of agency:
mega-agency groups
independent agencies
national, regional, and local
specialized/niche agencies
agency service suppliers
media buying, creative services
6. mega-agency groups
prompted by mergers and
client globalization
financial pressures
service multinational
accounts
subsidiaries provide
“IMC” (integrated marketing
communication) services
7. Some mega-agency groups:
OmniCom Group $4.15 billion
WPP Group $3.64 billion
Interpublic Group $3.38 billion
Dentsu (Japan) $1.98 billion
Young & Rubicam $1.49 billion
8. mega-agency groups:
WPP Group $6.69 billion
(including Y&R)
Omnicom Group 5.74 billion
Interpublic Group $5.08 billion
Havas $2.39 billion
Publicis $2.17 billion
(including Saatchi)
9. mega-agency pros & cons
positives: negatives:
larger talent pool people vs. profit
negotiating clout creativity vs. size
financial rewards conflict of
account security interests
competitive edge people business
strong partnerships
more services
international link
10. national, regional & local
these are independent agencies
there are now fewer national
agencies which are not part of
mega-agency groups
regional and local agencies work
with smaller clients who are usually
located nearby
11. Famous ad agencies
1. J. Walter Thompson
2. Leo Burnett Worldwide
3. McCann-Erickson Worldwide
4. BBDO Worldwide
5. Grey Advertising
6. DDB Worldwide
7. Ogilvy & Mather Worldwide
8. FCB Worldwide
9. Y&R Advertising
10. Publicis Worldwide
12. specialized/niche agencies
industry specialists
ethnic agencies
internet agencies
business-to-business agencies
creative boutiques and
design houses
13. other suppliers
provide “unbundled” services
one part of what an agency does
media buying services
freelancers & consultants
production companies
in-house or “house” agencies
agencies owned by clients
18. idea generation
manufacture ideas
ideas are lifeblood of the agency
create intellectual capital
create and sell different
kinds of ideas
marketing strategies
promotional opportunities
even new product ideas...
19. brand-building
“The agency’s purpose is to create
and direct communication about a
product or service so that the brand
is perceived to have a unique
value or brand personality.”
Let’s look at some examples...
26. brand-building
means integration
more and more, agencies are being
involved in all areas of marketers’
brand-building activities
today, it’s more than advertising
it’s integrated marketing
communications (IMC)
29. 7 primary services:
complete a marketing analysis
develop an advertising plan
prepare a creative strategy
create advertising executions
develop and implement a media plan
handle billing and payments
integrate other marketing
communications
30. 4 functions of full-service agencies
account management
creative
media planning and placement
research
31. agency organization chart
B a do
or f
D et r
i co s
r
[ h i mnC O
C ar a / E ]
Pe i e t
r sd n
[ O ]
C O
O e Mr e i g
t r a k tn
h Sr t g
t ae y O i eMn g mn
f c
f a ae e t
C m u i ai n
o m nc t o s Rve B a d
ei w or [ e s n e,
Pr o n l
Sr i e
e vc s [ a a mn
Mn g e t Ac u t n ,
c o ni g
[ R e c]
P , t. Cm i t e
o m e]
t L g l e c]
e a, t .
Ac u t Mm
co n g t. Ce t v
r ai e Rs a c
ee r h M i Dp.
e a e t
d
D et r
i co
r Ee C
xc D D et r
i co
r D et r
i co
r
Mn g mn
a ae e t As ca e
soi t P oe t
rjc As cae
soi t
S pr i o
u e vs r Ce t v
r ai e Mn g r
a aes M i
e a
d
D et r
i co
r D et r
i co
r
Ac u t
co n Ce t v
r ai e Rs a c
ee r h M i
e a
d
E e ui e
x c tv Go p
ru: As s a t
s i t ns S pr i o
u e vs r
As . Ac u t
st co n Cp S v . &
o y pr At S p r i o
r u e vs r M ie a
d M i
e a
d
E e ui e
x c tv C p wi e s
o y rt r & r D et r
At i c o s
r Pa n r
l ne Byr
ue
Broadcast Print Analysts
Production Production
Traffic
32. account management
liaison between agency and client
responsible for understanding...
the client’s business
the client’s marketing needs
strategy development
representing client point of view
within the agency
33. account management
A c c o u n t M g m t.
D ir e c to r
account management
director
M a n a g e m en t.
S u p e r v is o r
management supervisor
A ccount
S u p e r v is o r account supervisors
A ccount account executives
E x e c u tiv e
assistant account execs
A sst. A c c o u n t A ccoun t
E x e c u tiv e C o o r d in a to r
account coordinators
Traffic
traffic
34. creative department
responsibility
the creative department is responsible
for creating and producing the print and
broadcast advertising
strategy is key
good creative work is always guided by a
creative strategy that sets forth goals to
be accomplished and key message
points to be relayed
35. creative department
S tr a te g y
R e v ie w
B oard
executive & group creative
E x e c u tiv e
directors
creative director
C r e a tiv e
D ir e c to r (E C D )
C r e a tiv e
D ir e c to r (C D ) associate creative director
A s s o c ia te
C r e a tiv e
D ir e c to r (A C D )
copywriters
C r e a tiv e
art directors
G roup:
C opy Spvr. & A r t S u p e r v is o r
broadcast producers
print production managers
C o p y w r ite r s & A r t D ir e c to r s
Broadcast Print
Production Production
Traffic
traffic coordinators
36. media department
The media department has two main
functions - planning and buying.
The planning group handles more
strategic marketing and media issues.
The buying group handles media
negotiations and implementation.
37. media department
media director
M e d ia
D ir e c to r
A s s o c ia te
M e d ia
associate media directors
D ir e c to r
media supervisors
M e d ia
media planners
S u p e r v is o r
Media
M e d ia M e d ia Plan
P la n n e r B uyer media buyers
Analysts
media analysts
38. big changes in the
media department
mega-agency media departments
have now become profit centers
agencies have set up their media
departments as free-standing units
many large clients now look at media
as a separate service
39. research department
interpret market environment
gather and analyze research data.
primary and secondary techniques
determine consumer needs/perceptions
understand problems
advise how ads can meet Research
strategic goals Report
help find solutions
40. research department
R esea rch
D ir e c to r research director
P r o je c t
M anagers research project managers
R esea rch research assistants
A s s is ta n ts
Research
Outside outside research Report
Research
Suppliers specialists
42. 3 ways agencies make money
commissions
usually 15% of gross costs
fees
usually based on negotiated hourly rate
incentives
still relatively new and problematic
usually based on performance goals
43. agency commissions
media commission system
15% media commission
adjustable commission rates
negotiate to match client budget
sliding scale
markups-production & service
add a percentage markup to costs
17.65% of net = 15% of gross
44. 4 types of fee systems
fixed fee (retainer)
cost-plus fee
performance fee
hybrid fee &
commission
46. agency trends
clutter, overload, “overchoice”
increased media options
increasing audience fragmentation
more messages everywhere
doing more with less
economic pressures, “downsizing”
ongoing client budget pressures
managing size
more mergers and mega-agencies
47. agency trends
managing technology
interactive marketing
e-mail, web sites
improving internal systems
account planning
re-engineering agency organization
improving delivery of imc services
48. in conclusion...
as long as marketers need
ideas to build their brands,
they’re going to need
advertising agencies