The Agency World

Chapter 2

The Agency World

The traditional agency New agency structures The growing range of specialists Selecting an agency Paying the agency

The agency world Objectives

Understand the role of advertising agencies and the relationship between agency and client Appreciate the factors that promote creative and effective advertising

Introduction
No

business needs an agency Can buy different services from separate specialists Most businesses find it easier to use an agency

Alternative ways to perform the advertising function

In-house advertising operation

Necessitates employing an advertising staff and absorbing the operation costs Unprofitable unless a company does a large and continuous advertising

Full-service advertising agency

Advantages In-depth knowledge and skills Obtaining negotiating muscle with the media Coordinating advertising and marketing efforts

Disadvantages Some control is lost Larger clients are favored over small clients Occasionally inefficient in media buying

A la carte

Advantages Use services only when they are needed Availability of high-caliber creative talent Potential cost efficiencies

Disadvantages Specialists approach client problems in a stereotyped fashion Lack of cost accountability Financial instability of smaller boutiques

Advertising Agency Organization

Creative Services

Media Services

Develop advertising copy and campaigns Copywriters, production people, and creative directors

Research Services

Account Management

Advertising Agency Organization

Creative Services

Media Services

Research Services

Selecting the best advertising media Media planners develop overall media strategy Media buyers procure the selected media

Account Management

Advertising Agency Organization

Creative Services

Media Services

Research Services

Study clients customers buying habits, purchase preferences, and responsiveness Focus groups, mall intercepts, acquisition of syndicated research data

Account Management

Advertising Agency Organization

Creative Services

Media Services

Research Services

Link the agency with the client Act as liaisons so that the client does not need to interact directly with several different service departments and specialists

Account Management

Memorable Advertising

Apple Computers 1984 TV Commercial

What Makes Effective Advertising?

Sound Strategy Consumers View

Persuasive

Effective Advertising

Break Clutter

Deliver on Promises

Doesnt Overwhelm

Creating Effective Advertising

The Role of Creativity

Being Creative
Characteristics of creative campaigns

Energizer Batteries

Differentiates itself Out-if-the-ordinary

Energizer Batteries

Energizer Batteries keep going, and going, and going Like the drum-beating bunny that reinforces the argument

Being Creative
Characteristics of creative campaigns

Energizer Batteries
Pepsi-Cola

Differentiates itself Out-if-the-ordinary

Pepsi-Cola
Pepsi-Cola commercial pokes fun at its competitor, Coca-cola and subtly conveys the message that perhaps Pepsi is better than Coke

Being Creative
Characteristics of creative campaigns

Energizer Batteries
Pepsi-Cola

Differentiates itself Out-if-the-ordinary

Volkswagen Golf

Being Creative
Characteristics of creative campaigns

Energizer Batteries
Pepsi-Cola

Differentiates itself Out-if-the-ordinary

Volkswagen Golf
Bud Light

Creating Effective Advertising

The Role of Creativity

Spuds MacKenzie campaign Budfrogs Louie and Frank Whassup?!

Little Caesars
The toga-clad Pizza, Pizza man captures and holds the viewers attention and provides Little Caesars with a unique image vis-a-vis its more laid-back competitors

Volkswagen Golf

This simple ad dramatizes that the Volkswagen Golf is a roomy car while holding the viewers attention in an entertaining manner

New agency structures

Three factors that influence the ways in which new agency formats have emerged

The new agency structures

Technological changes Growing importance of internationally held accounts for large agencies Recognition that different clients have diversified needs

Reorganizing the old

The account room approach Structure the agency around its clients - creates a focus for the account team - keeps them close to the brand

Reorganizing the old

The Virtual Account Group or Virtual agency Uses linked computers Intranet Video conferencing High tech connections

Reorganizing the old

hot desking First come first served offices

Results of reorganization
Gets agencies away from what they always criticized in their clients. - focus on products and production with less regard to customers needs - Allows for anyone on the team to be involved in the creative process.

Specialist Agencies

Media Buying agencies Creative boutiques Direct marketing Account planning Management consultants

Media Buying Agencies

Buy blocks of space or time from media business Effectively became media wholesalers An important source of advertising research

Creative Boutiques

Creative hot-shops Using briefs from clients create advertisements Often freelancers Assist full service agencies when under pressure

Direct Marketing

Nowadays full service agencies are merging or aquiring direct specialists Allows for common creative direction Also developing new skills necessary for the internet advertising market

Account Planning

Take over the planning role for an agency Act as supplementary source of ideas for agency or advertiser

Management consultants

Provide general consultancy on brand strategy

Selecting an agency

Have they fully understood the brief? Do they know how to use market research? Can they contribute to our thinking here? Is their strategic thinking sound? Is it imaginative? Have I learned anything useful from it?

Are they professional and businesslike? Can I work with their senior people? And will they be actually working on my business? Are their capabilities high in all key areas management, strategy, creative, media? Do they work well as a team both among themselves and with our people?

Selecting an agency

Is their creative work of a high quality? Is this confined to TV, or does it go across all media? Does this include belowthe-line? New media? Can they offer an integrated service?

Do they have real expertise in the specialist areas which we are looking at, egl direct marketing, new media? Can they work with us internationally (now or in the future) How do they propose to evaluate the effectiveness of the campaign?

Selecting an agency

What is their attitude to costs? Will they save us money? How will they relate to our media buying agency/other specialists? How important to them will our account be? Will we be one of their larger accounts, or simply a small fish in a very large pool?

Will they fit with our ways of working? Are they willing and able to be business partners, or will they simply be suppliers? (This depends of course on how we see our own style of dealing with agencies)

Agency Compensation
Commissions from media (15%) Reduced commission system(<15%)

Three Sources

Labor-based fee system

Outcome-based