Chapter 3 - Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communication Organizations Flashcards
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?
Clients
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?
Advertising Agency
are another major participant in the advertising and promotions process?
Media organizations
Provide services in their areas of expertise
Specialized marketing communication services
Perform specialized functions the other participants use in planning and executing advertising and other promotional functions?
Collateral services
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?
Centralized system
Is responsible for all promotions activities except sales (in some companies this individual has the title of marketing communications manager?
Advertising manager
Basic functions the manager and staff perform include the following?
1) Administration and Execution
2) Coordination with Other Departments
3) Coordination with Outside Agencies and Services
Companies with separate manufacturing, research and development, sales, and marketing departments for various divisions, product lines, or businesses.
Decentralized system
Responsible for the total management of the brand, including planning, budgeting, sales, and profit performance?
Brand manager
includes category managers as well as brand and advertising managers.s as well as brand and advertising managers.
category management system
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?
Category manager
Is an advertising agency that is set up, owned, and operated by the advertiser.
In-house agency
Types of Ad Agencies?
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
Are small ad agencies that provide only creative services and have long been an important part of the advertising industry.
Creative boutiques
Are organizations that specialize in the buying of media, particularly for television and digital advertising.
Media specialist companies
Refers to wide range of technologies that are automating the buying, placement, and optimization of advertising media.
Programmatic buying
The agency receives a specified commission from the media on any advertising time or space it purchases for its client
Commission System
Whereby the commissions average from 8 to 10 percent or are based on a sliding scale?
Negotiated commission system
There are two basic types of fee arrangement systems?
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.
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)
Cost-plus system
Tying agency compensation to performance
incentive-based system
Whereby agencies are compensated above their basic costs, if they achieve or exceed results as measured by agreed-upon metrics.
value-based compensation
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?
Percentage Charges
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?
Financial audit
Focuses on the agency’s efforts in planning, developing, and implementing the client’s advertising programs and considers the results achieved?
Qualitative audit
How Agencies Gain Clients?
- Referrals
- Solicitations
- Presentations
- Public Relations
- Image and Reputation
Why Agencies Lose Clients?
- Poor performance or service
- Poor communication
- Unrealistic demands by the client
- Personality conflicts
- Personnel changes
SPECIALIZED SERVICES:
Provide a variety of services, including database analytics and management, direct mail, research, media services, and creative and production capabilities?
Direct-marketing agencies
SPECIALIZED SERVICES:
Develop and manage sales promotion programs such as contests, sweepstakes, refunds and rebates, premium and incentive offers, and sampling programs?
Sales promotion agency
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.
Public relations firm
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?
Digital/interactive agencies
They include marketing research companies, package design firms, consultants, photographers, graphic design companies, talent agencies, video production houses, and event marketing services?
Collateral Services
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.
Marketing research companies
