Four Types ofAdvertising Agencies

Here are basically four types of ad agencies. They are:

In-house agencies
Creative boutiques
Media buying agencies
Full service agencies
In- house agencies
Some companies, in an effort to reduce costs and maintain greater control over agency activities, have set up their
own advertising agencies internally. An in-house agency is an ad agency set up, owned and operated by the
advertiser. Many companies use in-house agencies exclusively; others combine in-house efforts with those of outside
agencies.
A major reason for using in-house agency is to reduce advertising and promotional costs. Companies with very large
advertising budgets pay a substantial amount to outside agencies in the form of media commissions. With an internal
structure, these commissions go to the in-house ad agency. An in-house ad agency can also provide related work
such as sales presentations and sales force material, package design, and public relations at a lower cost than the
outside agencies.
Saving money is not the only reason companies use in-house ad agencies. Time savings, bad experience with
outside agencies, and the increased knowledge and understanding of the market that come from working advertising
and promotion for the product or service day by day are also reasons. Companies can also maintain a tighter control
over the process and more easily coordinate promotions with the firms overall marketing programmes.
Opponents of the in-house agencies say that they can give the advertiser neither the experience nor the objectivity of
the outside agency and nor the range of services. They argue that the outside agencies have a more specialized staff
and attract the best creative staff. Also flexibility is higher since if the company is not satisfied with the agency it can
be dismissed, whereas changes in an in-house agency could be slower and more disruptive.
Thus we can summarize by saying that
Ad agency Advantages Disadvantages
In house
agency
Cost saving
More control
Increased coordination
Less experience
Less objectivity
Less flexibility
In-house agencies in India are:

Levers - Lintas (previously)
Videocon Confidence
Reliance Mudra (when Mudra started out)
Normal 0 MicrosoftInternetExplorer4
Creative boutiques
Creative boutique is an agency that provides only creative services. These specialized companies have developed in
response to some clients desires to use only the creative talent of an outside provider while maintaining the other
functions internally.
The client may seek outside creative talent for two reasons:
Because he wants an extra creative effort
May be because its own employees of the in-house agency or the agency that he has appointed do not have
sufficient skills in this regard.
The full-service agencies also sub-contract work creative boutiques when they are very busy or want to avoid adding
full time employees to their pay roll. Creative boutiques are usually found by members of the creative departments of
full service agencies who leave the firm and take with them clients who want to retain their creative talents. These
boutiques generally perform creative function on a fee basis.
Few creative boutiques in India:

RMG David
Vyas Gianetti Creatives
Chlorophyll
Media buying agencies
Media buying agencies are independent companies that specialize in the buying of media, particularly radio and
television. The task of purchasing advertising media has grown more complex as specialized media proliferate, so
media buying services have found a niche by specializing in the analysis and purchase of the advertising time and
space. Agencies and clients generally develop their own media plans and then hire the buying services to execute
them.
Some media buying agencies do help advertisers plan their media strategies. Because media buying agencies
purchase such large amounts of time and space, they receive large discounts and can save the small agenys or
clients money on media buying. Media buying agencies are paid a fee or commission for their work.
Mindshare
Initiative Media (LOWE)
Zenith Media (Bates, Saatchi & Saatchi)
Optimedia (Publicis)
Starcom (Leo Burnett)
Fulcrum (HTA) Normal 0 MicrosoftInternetExplorer4
Full service agency
The function of an advertising agency is to see to it that its clients advertising leads to greater profits in the long run
than could be achieved without the ad agency. Most such agencies are large in size and offer their clients a full range
of services in the area of marketing, communications and promotions. These include planning, creating and
producing the advertisement, media selection and research. Other services offered include strategic marketing
planning, sales training, package design, sales promotion, event management, trade shows, publicity and public
relations.
The full service agency is composed of various departments; each is responsible to provide required inputs to
perform various functions to serve the client.