Chapter 3 - Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communication Organizations

Question 1

Are the key participants in the process. They have the products, services, or causes to be marketed, and they provide the funds that pay for the IMC program?

Answer 1

Clients

Question 2

An outside firm that specializes in the creation, production, and/or placement of the communications message and that may provide other services to facilitate the marketing and promotions process?

Answer 2

Advertising Agency

Question 3

are another major participant in the advertising and promotions process?

Answer 3

Media organizations

Question 4

Provide services in their areas of expertise

Answer 4

Specialized marketing communication services

Question 5

Perform specialized functions the other participants use in planning and executing advertising and other promotional functions?

Answer 5

Collateral services

Question 6

The advertising or marcom manager controls the entire promotions operation, including budgeting, coordinating creation and production of ads, planning media schedules, and monitoring and administering the sales promotions programs for all the company’s products or services?

Answer 6

Centralized system

Question 7

Is responsible for all promotions activities except sales (in some companies this individual has the title of marketing communications manager?

Answer 7

Advertising manager

Question 8

Basic functions the manager and staff perform include the following?

Answer 8

1) Administration and Execution
2) Coordination with Other Departments
3) Coordination with Outside Agencies and Services

Question 9

Companies with separate manufacturing, research and development, sales, and marketing departments for various divisions, product lines, or businesses.

Answer 9

Decentralized system

Question 10

Responsible for the total management of the brand, including planning, budgeting, sales, and profit performance?

Answer 10

Brand manager

Question 11

includes category managers as well as brand and advertising managers.s as well as brand and advertising managers.

Answer 11

category management system

Question 12

Oversees management of the entire product category and focuses on the strategic role of the various brands in order to build profits and market share?

Answer 12

Category manager

Question 13

Is an advertising agency that is set up, owned, and operated by the advertiser.

Answer 13

In-house agency

Question 14

Types of Ad Agencies?

Answer 14

Full-Service Agencies - Offers its clients a full range of marketing, communications, and promotions services, including planning, creating, and producing the advertising; performing research; and selecting media

Account Services - Account services, or account management, is the link between the ad agency and its clients. Depending on the size of the client and its advertising budget, one or more account executives serve as liaison.

Account executive - responsible for understanding the advertiser’s marketing and promotions needs and interpreting them to agency personnel

Marketing Services - One service gaining increased attention is research, as agencies realize that to communicate effectively with their clients’ customers, they must have a good understanding of the target audience.

Creative Services - The creative services department is responsible for the creation and execution of advertisements.

Management and Finance - an advertising agency must be managed and perform basic operating and administrative functions such as accounting, finance, and human resources.

Agency Organization and Structure - Group system - individuals from each department work together in groups to service particular accounts

Question 15

Are small ad agencies that provide only creative services and have long been an important part of the advertising industry.

Answer 15

Creative boutiques

Question 16

Are organizations that specialize in the buying of media, particularly for television and digital advertising.

Answer 16

Media specialist companies

Question 17

Refers to wide range of technologies that are automating the buying, placement, and optimization of advertising media.

Answer 17

Programmatic buying

Question 18

The agency receives a specified commission from the media on any advertising time or space it purchases for its client

Answer 18

Commission System

Question 19

Whereby the commissions average from 8 to 10 percent or are based on a sliding scale?

Answer 19

Negotiated commission system

Question 20

There are two basic types of fee arrangement systems?

Answer 20

Fixed-fee method - the agency charges a basic monthly fee for all of its services and credits to the client any media commissions earned.

Fee–commission combination - the media commissions received by the agency are credited against the fee.

Question 21

The client agrees to pay the agency a fee based on the costs of its work plus some agreed-on profit margin (often a percentage of total costs)

Answer 21

Cost-plus system

Question 22

Tying agency compensation to performance

Answer 22

incentive-based system

Question 23

Whereby agencies are compensated above their basic costs, if they achieve or exceed results as measured by agreed-upon metrics.

Answer 23

value-based compensation

Question 24

These may include market research, artwork, printing, photography, and other services or materials. Markups usually range
from 17.65 to 20 percent and are added to the client’s overall bill?

Answer 24

Percentage Charges

Question 25

Focuses on how the agency conducts its business. It is designed to verify costs and expenses, the number of personnel hours charged to an account, and payments to media and outside suppliers?

Answer 25

Financial audit

Question 26

Focuses on the agency’s efforts in planning, developing, and implementing the client’s advertising programs and considers the results achieved?

Answer 26

Qualitative audit

Question 27

How Agencies Gain Clients?

Answer 27

• Referrals
• Solicitations
• Presentations
• Public Relations
• Image and Reputation

Question 28

Why Agencies Lose Clients?

Answer 28

• Poor performance or service
• Poor communication
• Unrealistic demands by the client
• Personality conflicts
• Personnel changes

Question 29

SPECIALIZED SERVICES:

Provide a variety of services, including database analytics and management, direct mail, research, media services, and creative and production capabilities?

Answer 29

Direct-marketing agencies

Question 30

SPECIALIZED SERVICES:

Develop and manage sales promotion programs such as contests, sweepstakes, refunds and rebates, premium and incentive offers, and sampling programs?

Answer 30

Sales promotion agency

Question 31

Develops and implements programs to manage the organization’s publicity, image, and affairs with consumers and other relevant publics, including employees, suppliers, stockholders, government, labor groups, citizen action groups, and the general public.

Answer 31

Public relations firm

Question 32

Specialize in the development and strategic use of various digital marketing tools such as websites for the Internet, banner ads, search engine optimization, mobile marketing, and social media campaigns?

Answer 32

Digital/interactive agencies

Question 33

They include marketing research companies, package design firms, consultants, photographers, graphic design companies, talent agencies, video production houses, and event marketing services?

Answer 33

Collateral Services

Question 34

Offer specialized services and can gather objective information that is valuable to the advertiser’s promotional programs?

They conduct qualitative research such as in-depth interviews and focus groups, as well as quantitative studies such as market surveys.

Answer 34

Marketing research companies