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Organizing for Advertising
and Promotion:
The Role of Ad Agencies and Other
Marketing Communications
Organizations


        © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Participants in the IMC Process


Advertiser (Client)
Advertiser (Client)

Advertising Agency
Advertising Agency

Media Organizations
Media Organizations                                     Direct
                                                        Direct                  Sales
                                                                                Sales
                                                      Response
                                                      Response                Promotion
                                                                              Promotion
Marketing
Marketing                                             Agencies
                                                       Agencies               Agencies
                                                                               Agencies
Communications
Communications
Specialist
Specialist
Organization
Organization                                            Public
                                                        Public                Interactive
                                                                               Interactive
                                                       Relations
                                                       Relations               Agencies
                                                                                Agencies
Collateral Services
Collateral Services                                     Firms
                                                        Firms


                      © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Advertising Department Under
   Centralized System


                               President
                               President



                                                                  Research
                                                                  Research
                                                                    and
                                                                     and         Human
                                                                                 Human
Production
Production   Finance
             Finance             Marketing
                                 Marketing                        Develop-
                                                                  Develop-      Resources
                                                                                Resources
                                                                    ment
                                                                    ment




                   Marketing
                   Marketing                                               Product
                                                                            Product
     Advertising
     Advertising                                       Sales
                                                       Sales
                   Research
                   Research                                                Planning
                                                                           Planning


                   © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Pros & Cons of Centralization


 + Positive                                                              - Negative

   Better
    Better                                                                  Less Goal
                                                                            Less Goal
Communications
Communications                                                            Involvement
                                                                          Involvement


                            The
                            The
    Fewer
    Fewer                                                                   Longer
                                                                             Longer
  Personnel
  Personnel
                        Centralized
                        Centralized                                      Response Time
                                                                         Response Time
                          System
                          System

                                                                            Can’t Do
                                                                             Can’t Do
  Continuity
  Continuity                                                             Multiple Product
                                                                         Multiple Product
   Of Staff
   Of Staff                                                                    Lines
                                                                               Lines


                 © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Decentralized Brand Management System
                                          Corporate

Production       Finance                  Marketing                       Research        Human
                                                                            and          Resources
                                                                         Development

         Sales         Product                                                     Marketing
                      Management                                                   Services

                  Brand                      Brand
                                                                           Advertising    Marketing
                 Manager                    Manager
                                                                           Department     Research
             Ad agency                    Ad agency

                                                            Sales                   Package
                                                          Promotion                 Design

                                                  Merchandising

                           © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Pros & Cons of Decentralization


+ Positive                                                               - Negative

                                                                             Lack of
                                                                              Lack of
Concentrated
Concentrated                                                               Experience
                                                                           Experience
  Attention
  Attention                                                                  in IMC
                                                                              in IMC


Rapid Problem                The
                             The                                         Competition for
Rapid Problem                                                            Competition for
  Response              Decentralized
                        Decentralized                                      Resources
  Response                                                                 Resources
                           System
                           System


  Increased
  Increased                                                                 Lack of
                                                                            Lack of
  Flexibility
   Flexibility                                                             Authority
                                                                           Authority



                 © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Pros & Cons of In-House Agencies


+ Positive                                                             - Negative

   Cost
    Cost                                                                   Less
                                                                           Less
  Savings
  Savings                                                               Experience
                                                                        Experience


                             The
                             The
   More
   More                                                                    Less
                                                                           Less
  Control
  Control
                          In-house
                          In-house                                      Objectivity
                                                                        Objectivity
                           Agency
                           Agency

   Better
   Better                                                                  Less
                                                                           Less
Coordination
Coordination                                                            Flexibility
                                                                        Flexibility



               © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Most No Fear advertising is done by their
in-house agency




            © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
                                                                    +
Ad Agencies Have Skilled Specialists




   Artists
   Artists                       Writers
                                 Writers                                Researchers
                                                                        Researchers




Photographers
Photographers          Media Analysts
                       Media Analysts                                   Other Skills
                                                                        Other Skills
                © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Full-Services Agencies

    Planning
    Planning
   advertising
   advertising        Full Range of
                       Full Range of                                         Performing
                                                                             Performing
                        Marketing
                        Marketing                                             research
                                                                              research
   Creating
   Creating          Communication
                     Communication
  advertising
  advertising        and Promotion
                      and Promotion
                         Services                                          Selecting media
                                                                           Selecting media
    Producing
    Producing            Services
   advertising
   advertising


Strategic market
Strategic market
    planning
    planning                                                               Package design
                                                                           Package design
Sales promotion
Sales promotion    Non-Advertising
                   Non-Advertising
  and training
  and training        Services
                      Services                                             Public relations
                                                                           Public relations
   Trade show
   Trade show                                                               and publicity
                                                                            and publicity
    materials
    materials
                   © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Typical Full-Service Agency Organization



                                                                         Board of
                                                                         Directors

                                                                         President


                        VP Creative            VP Account                            VP Marketing                 VP Management
                         Services               Services                               Services                     and Finance

  Writers            TV            Print        Account               Media            Research        Sales          Office
Art Directors     Produciton    Production     Supervision                                           Promotion     Management

            Traffic       Traffic                Account                                              Personnel    Accounting     Finance
                                                 Executive




                                             © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Services Provided by Agencies


                    Agency Services
                    Agency Services

   Account
   Account                       Marketing
                                 Marketing                                      Creative
                                                                                Creative
   Service
   Service                       Services
                                  Services                                      Services
                                                                                Services

The link between
The link between            Research
                             Research                                        Creation and
                                                                             Creation and
agency and client
agency and client           department may
                             department may                                  execution of ads
                                                                             execution of ads
                            design and execute
                             design and execute
Managed by the
Managed by the              research programs                                Copywriters,
                                                                             Copywriters,
Account Executive            research programs                               artists, other
Account Executive                                                            artists, other
                            Media department
                             Media department                                specialists
                                                                             specialists
                            may analyze, select
                             may analyze, select
                            and contract media
                             and contract media
                            resources
                             resources

                     © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
The Role of Creative Boutiques



 Creative
 Creative                             Provide Only Creative Services
                                      Provide Only Creative Services
Boutiques
Boutiques


                                            Full-Service Agencies May
                                            Full-Service Agencies May
                                            Subcontract With Creative
                                            Subcontract With Creative
                                                    Boutiques
                                                     Boutiques



                                       Other Functions Provided by
                                        Other Functions Provided by
                                     the Internal Client Departments
                                      the Internal Client Departments



            © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Coca Cola’s in-house boutique
created this popular spot




           © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
                                                                   +
Media Buying Can Be Specialized


  Media
  Media                                   Specialize in Buying Media,
                                          Specialize in Buying Media,
 Buying
 Buying                                   Especially Broadcast Time
                                           Especially Broadcast Time
Services
Services


                                       Agencies and Clients Develop
                                       Agencies and Clients Develop
                                             Media Strategy
                                              Media Strategy



                                        Media Buying Organizations
                                         Media Buying Organizations
                                        Implement the Strategy and
                                        Implement the Strategy and
                                           Buy Time and Space
                                            Buy Time and Space


           © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Methods of Agency Compensation

                                                           Commissions
                                                           Commissions
                                                             Method
                                                             Method


                                                             Cost-Plus
                                                             Cost-Plus
                                                            Agreements
                                                            Agreements


Compensation
Compensation                                                  Percentage
                                                              Percentage
  Methods
  Methods                                                      Charges
                                                                Charges

                                                               Fee
                                                               Fee
                                                          Arrangements
                                                          Arrangements


                                                       Incentive-Based
                                                       Incentive-Based
                                                          Payment
                                                           Payment
          © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Young & Rubicam has handled
Dr. Pepper for over 30 years




           © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
                                                                   +
Foote, Cone & Belding was the agency
for Levi’s for 68 years




    *Click outside of the video screen to advance to the next slide

                   © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Why Agencies Lose Clients


                    Personnel
                     changes                                            Changes
    Poor                                                               in strategy
performance
                          Poor                                                Declining
                      communications                                           sales
Unrealistic
demands
                   Changes
                    in size                                            Payment
                                                                       conflicts
 Personality
  conflicts                                                                  Policy
                        Conflict of
                         interests                                          changes


               © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
How Agencies Gain Clients




   Referrals
   Referrals                                                                 Presentations
                                                                             Presentations




                                Solicitations
                                Solicitations




Public Relations
Public Relations                                                           Image, Reputation
                                                                           Image, Reputation

                   © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Gateway Changed Its Advertising
After Changing Agencies




    *Click outside of the video screen to advance to the next slide

                   © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
A Change in Strategy Led to a Change
in Gateway’s Advertising




    *Click outside of the video screen to advance to the next slide

                   © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Direct Response Agency Activities



 Data Base
 Data Base                                                           Media Services
                                                                     Media Services
Management
Management


  Direct                Direct
                         Direct
  Direct                                                                Creative
   Mail                Response
                       Response                                         Creative
   Mail
                       Agencies
                       Agencies


 Research
 Research                                                             Production
                                                                      Production



             © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Activities performed by Sales
Promotion Agencies

                                                   Promotion Planning
                                                   Promotion Planning

                                                           Creative Work
                                                           Creative Work

                                                                Research
                                                                Research
                                                                 Research

                                                     Coordination With
                                                     Coordination With
                                                        Advertising
                                                        Advertising

                                                       Premium Design
                                                       Premium Design

                                                Contest/Sweepstakes
                                                Contest/Sweepstakes
                                                   Development
                                                    Development

                                                  Data Base Marketing
                                                  Data Base Marketing
            © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Functions performed by Public Relations Firms



                           Damage
                           Control                                    Generating
  Strategy                                                             Publicity
Development


                                Program
                                Planning
                                                                        Image
                                                                       Portrayal
 Lobbying
                             Public
                             Affairs



              © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Functions performed by Interactive Agencies

   Web
   Web                  Web Sites
                        Web Sites
Banner Ads
Banner Ads

        Interactive
         Interactive
       Media Creation
       Media Creation

CD-ROMs
CD-ROMs                      Kiosks
                             Kiosks


                                       Audio
                                       Audio                               Video
                                                                           Video

                                                               Digital
                                                               Digital
                                                              Content
                                                              Content

                                 Animation
                                 Animation                             Special Effects
                                                                       Special Effects

               © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Marketing Research Companies

                                                             Planning and
                                                             Planning and
                                                            Implementing
                                                            Implementing
                                                               Research
                                                               Research

                                                              Information
                                                              Information
                                                               Application
                                                               Application


                                                             Analysis and
                                                             Analysis and
                                                            Interpretation
                                                            Interpretation

                                                             Primary Data
                                                             Primary Data
                                                               Collection
                                                               Collection
                                                   Qualitative & Quantitative
                                                   Qualitative & Quantitative


                                                         Secondary Data
                                                         Secondary Data
                                                            Collection
                                                            Collection
          © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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3. organizing for advertising and promotion the role of ad agencies and other mc os

  • 1. Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communications Organizations © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 2. Participants in the IMC Process Advertiser (Client) Advertiser (Client) Advertising Agency Advertising Agency Media Organizations Media Organizations Direct Direct Sales Sales Response Response Promotion Promotion Marketing Marketing Agencies Agencies Agencies Agencies Communications Communications Specialist Specialist Organization Organization Public Public Interactive Interactive Relations Relations Agencies Agencies Collateral Services Collateral Services Firms Firms © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 3. Advertising Department Under Centralized System President President Research Research and and Human Human Production Production Finance Finance Marketing Marketing Develop- Develop- Resources Resources ment ment Marketing Marketing Product Product Advertising Advertising Sales Sales Research Research Planning Planning © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 4. Pros & Cons of Centralization + Positive - Negative Better Better Less Goal Less Goal Communications Communications Involvement Involvement The The Fewer Fewer Longer Longer Personnel Personnel Centralized Centralized Response Time Response Time System System Can’t Do Can’t Do Continuity Continuity Multiple Product Multiple Product Of Staff Of Staff Lines Lines © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 5. Decentralized Brand Management System Corporate Production Finance Marketing Research Human and Resources Development Sales Product Marketing Management Services Brand Brand Advertising Marketing Manager Manager Department Research Ad agency Ad agency Sales Package Promotion Design Merchandising © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 6. Pros & Cons of Decentralization + Positive - Negative Lack of Lack of Concentrated Concentrated Experience Experience Attention Attention in IMC in IMC Rapid Problem The The Competition for Rapid Problem Competition for Response Decentralized Decentralized Resources Response Resources System System Increased Increased Lack of Lack of Flexibility Flexibility Authority Authority © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 7. Pros & Cons of In-House Agencies + Positive - Negative Cost Cost Less Less Savings Savings Experience Experience The The More More Less Less Control Control In-house In-house Objectivity Objectivity Agency Agency Better Better Less Less Coordination Coordination Flexibility Flexibility © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 8. Most No Fear advertising is done by their in-house agency © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin +
  • 9. Ad Agencies Have Skilled Specialists Artists Artists Writers Writers Researchers Researchers Photographers Photographers Media Analysts Media Analysts Other Skills Other Skills © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 10. Full-Services Agencies Planning Planning advertising advertising Full Range of Full Range of Performing Performing Marketing Marketing research research Creating Creating Communication Communication advertising advertising and Promotion and Promotion Services Selecting media Selecting media Producing Producing Services advertising advertising Strategic market Strategic market planning planning Package design Package design Sales promotion Sales promotion Non-Advertising Non-Advertising and training and training Services Services Public relations Public relations Trade show Trade show and publicity and publicity materials materials © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 11. Typical Full-Service Agency Organization Board of Directors President VP Creative VP Account VP Marketing VP Management Services Services Services and Finance Writers TV Print Account Media Research Sales Office Art Directors Produciton Production Supervision Promotion Management Traffic Traffic Account Personnel Accounting Finance Executive © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 12. Services Provided by Agencies Agency Services Agency Services Account Account Marketing Marketing Creative Creative Service Service Services Services Services Services The link between The link between Research Research Creation and Creation and agency and client agency and client department may department may execution of ads execution of ads design and execute design and execute Managed by the Managed by the research programs Copywriters, Copywriters, Account Executive research programs artists, other Account Executive artists, other Media department Media department specialists specialists may analyze, select may analyze, select and contract media and contract media resources resources © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 13. The Role of Creative Boutiques Creative Creative Provide Only Creative Services Provide Only Creative Services Boutiques Boutiques Full-Service Agencies May Full-Service Agencies May Subcontract With Creative Subcontract With Creative Boutiques Boutiques Other Functions Provided by Other Functions Provided by the Internal Client Departments the Internal Client Departments © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 14. Coca Cola’s in-house boutique created this popular spot © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin +
  • 15. Media Buying Can Be Specialized Media Media Specialize in Buying Media, Specialize in Buying Media, Buying Buying Especially Broadcast Time Especially Broadcast Time Services Services Agencies and Clients Develop Agencies and Clients Develop Media Strategy Media Strategy Media Buying Organizations Media Buying Organizations Implement the Strategy and Implement the Strategy and Buy Time and Space Buy Time and Space © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 16. Methods of Agency Compensation Commissions Commissions Method Method Cost-Plus Cost-Plus Agreements Agreements Compensation Compensation Percentage Percentage Methods Methods Charges Charges Fee Fee Arrangements Arrangements Incentive-Based Incentive-Based Payment Payment © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 17. Young & Rubicam has handled Dr. Pepper for over 30 years © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin +
  • 18. Foote, Cone & Belding was the agency for Levi’s for 68 years *Click outside of the video screen to advance to the next slide © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 19. Why Agencies Lose Clients Personnel changes Changes Poor in strategy performance Poor Declining communications sales Unrealistic demands Changes in size Payment conflicts Personality conflicts Policy Conflict of interests changes © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 20. How Agencies Gain Clients Referrals Referrals Presentations Presentations Solicitations Solicitations Public Relations Public Relations Image, Reputation Image, Reputation © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 21. Gateway Changed Its Advertising After Changing Agencies *Click outside of the video screen to advance to the next slide © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 22. A Change in Strategy Led to a Change in Gateway’s Advertising *Click outside of the video screen to advance to the next slide © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 23. Direct Response Agency Activities Data Base Data Base Media Services Media Services Management Management Direct Direct Direct Direct Creative Mail Response Response Creative Mail Agencies Agencies Research Research Production Production © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 24. Activities performed by Sales Promotion Agencies Promotion Planning Promotion Planning Creative Work Creative Work Research Research Research Coordination With Coordination With Advertising Advertising Premium Design Premium Design Contest/Sweepstakes Contest/Sweepstakes Development Development Data Base Marketing Data Base Marketing © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 25. Functions performed by Public Relations Firms Damage Control Generating Strategy Publicity Development Program Planning Image Portrayal Lobbying Public Affairs © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 26. Functions performed by Interactive Agencies Web Web Web Sites Web Sites Banner Ads Banner Ads Interactive Interactive Media Creation Media Creation CD-ROMs CD-ROMs Kiosks Kiosks Audio Audio Video Video Digital Digital Content Content Animation Animation Special Effects Special Effects © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 27. Marketing Research Companies Planning and Planning and Implementing Implementing Research Research Information Information Application Application Analysis and Analysis and Interpretation Interpretation Primary Data Primary Data Collection Collection Qualitative & Quantitative Qualitative & Quantitative Secondary Data Secondary Data Collection Collection © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Hinweis der Redaktion

  1. Chapter Three Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communications Organizations © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  2. Relation to text This slide relates to material on pp. 69-71 of the text and Figure 1-3. Summary Overview The various participants in the IMC process are shown on this slide. These include: Advertiser (client) – the company or organization that has the product, service or cause to be marketed and provides the funds to pay for the IMC program Advertising Agency – a firm that specializes in the creation, production, and often the placement of the communications messages and may provide other services to facilitate the IMC process Media Organizations – companies that provide information and entertainment to subscribers, viewers, listeners and/or readers and in which marketers can purchase time or space to deliver their advertising and promotion messages Marketing Communication Specialist Organizations – companies that provide specialized marketing communication services that are used as part of the IMC process. These include Direct response agencies Sales promotion agencies Public Relations Firms Interactive Agencies Collateral Services – companies that provide a wide array of support functions used by advertisers, agencies, media organizations, and specialist organizations such as marketing research, package design, photography, video production and other services Use of this slide This slide can be used to introduce the various participants in the IMC process and provide a brief overview of their roles. More detailed discussion of the role and responsibilities of each participant will follow.
  3. Relation to text This slide relates to the material on pp. 71-72 of the text and Figure 3-2. Summary Overview Companies have several options as to how they choose to organize for advertising including the centralized, decentralized and in-house systems. This slide shows how companies often organize for advertising under a centralized system. Under this system various organizational activities are divided along functional lines with marketing being a key area along with production, finance research and development and human resources. Within marketing, activities are also divided along functional lines with advertising placed alongside other areas including marketing research, sales, and product planning. Use of this slide This slide can be to show how companies often organize under a centralized system whereby an advertising or marketing communications manager assumes responsibility for supervising all promotion activities. The various activities of an advertising or marketing communications manager should be discussed including: Planning and budgeting Administration and Execution Coordination with other departments Coordination with outside agencies and services
  4. Relation to text This slide relates to the material on pp. 71-72 of the text and Figure 3-5. Summary Overview This slide presents the pros and cons of using a centralized system to organize for advertising and promotion. The positive aspects of this system include: Better communications as developing and coordinating the advertising and promotional program from one central office facilitates communication Fewer personnel are needed as fewer people are involved in advertising and promotion program decisions which facilitates decision making Continuity of staff often results as there may be less turnover and more experience among those involved in managing the advertising and promotion program The negative aspects of centralization include: Less goal involvement as it may be difficult for the advertising manager to become involved with the marketing strategy and goals for the company or brand Longer response time as the advertising department may be slow in responding to the specific marketing problems or needs of the company or brand Inability to do multiple product lines as the company becomes larger and adds more products, services and/or brands and there is more demand on the department Use of this slide The text discusses the pros and cons of the various systems used to organize for advertising and promotion. This slide summarizes the pros and cons of the centralized system.
  5. Relation to text This slide relates to the material on pp. 72-75 of the text and Figure 3-3. Summary Overview This slide shows how companies often organize for advertising and promotion under a decentralized brand management system, which is often used by large companies with multiple divisions and many different products and brands. Under this system responsibility for responsibility for the various functions associated with IMC are assigned to a product or brand manager who works closely with the outside advertising agency as well as other marketing communication specialists. The brand manager may also work with other areas of marketing within the firm such as sales, marketing research and the advertising/promotion department. Use of this slide Companies have several options as to how they choose to organize for advertising including the centralized, decentralized and in-house systems. This slide can be to show how companies often organize under a decentralized system whereby a brand manager assumes responsibility for supervising all promotion activities and works closely with the company’s marketing services group as well as an outside advertising agency and other marketing communication specialist organizations.
  6. Relation to text This slide relates to the material on pp. 72 to 75 of the text and Figure 3-5. Summary Overview This slide presents the pros and cons of using a decentralized system to organize for advertising and promotion. The positive aspects of this system include: Concentrated managerial attention for a product or brand Rapid response to problems and opportunities facing a brand Increased flexibility allowing for adjustments to various aspects of the advertising and promotional program The negative aspects of decentralization include: Ineffective decisions since brand managers often lack training and experience in advertising and promotion Internal conflict as brand managers compete for top management attention and marketing resources Lack of authority by brand managers over the functions needed to implement and control the plans they develop Use of this slide The text discusses the pros and cons of the various systems used to organize for advertising and promotion. This slide summarizes the pros and cons of the decentralized brand manger system. Brand management is very common among many large companies and attention should be given to issue involved with the use of this system for effective management of the IMC function.
  7. Relation to text This slide relates to the material on pp. 75-76 and Figure 3-5 Summary Overview This slide presents the pros and cons of using an in house agency to organize for and handle a company’s advertising and promotion. Advantages of this system include: Cost savings that result since media commissions that would go to an outside agency go to the in- house agency More control over the advertising function since it is handled within the company rather than by an outside agency Better coordination of advertising and promotion with the firm’s other marketing activities Negative aspects of this system include: Less advertising experience than is available from an outside agency with has a variety of specialists in various areas of advertising Less objectivity since those working for an in-house agency are part of the company rather than an outside agency Less flexibility as outside agencies can be changed much more easily whereas changes among in-house agency personnel are slower and more disruptive Use of this slide The text discusses the pros and cons of the various systems used to organize for advertising and promotion. This slide summarizes the pros and cons of using in-house agencies. Examples of companies that use in-house agencies should be provided such as Calvin Klein and Radio Shack.
  8. Relation to text This slide relates to material on pp. 75-76 and Exhibit 3-3 of the text. Summary Overview This slide shows an ad for sports apparel company No Fear which is an example of a company that handles most of its advertising and promotion in-house. No Fear does use an outside agency to handle some of its creative work but is an example of a company that continues to create effective IMC programs while maintaining their advertising in-house. Use of this slide This slide can be used to show that despite some of the drawbacks of using in-house agencies as stated in the previous slide, many companies such as No Fear have been successful in creating quality and meaningful advertising that has a positive impact on sales and revenue.
  9. Relation to text This slide relates to material on pp. 78-79 of the text. Summary Overview One of the main reasons outside advertising agencies are used is that they provide the client with the services of highly skilled individuals who are specialists in their fields. A list of these specialists is provided in the slide and includes: Artists Writers Researchers Photographers Media Analysts Specialists with other skills Use of this slide This slide can be used to introduce the various services and specialists of an advertising agency. The expertise and skills of outside advertising agencies is only one reason for choosing to use them. Other reasons are they provide a more objective viewpoint and they have a broad range of experience with a variety of products, companies, and industries.
  10. Relation to text This slide relates to material on pp.79-82 of the text. Summary Overview This slide defines and summarizes the activities of a full service advertising agency. A full service agency offers a full range of marketing, communications, and promotions services. These advertising services include: Planning, creating, and producing advertising campaigns Performing marketing and advertising research Selecting media The non-advertising services performed by a full service agency are: Strategic market planning Sales promotion Trade show materials Package design Public relations and publicity Use of this slide This slide can be used to introduce the wide array of activities performed by a full service advertising agency.
  11. Relation to text This slide relates to Figure 3-7 on p.79 of the text. Summary Overview This slide shows how a full service adverting agency is organized. A full service agency is made up of departments that provide the activities needed to perform the various advertising functions and serve the client. These departments are shown in the slide and include creative services, account services, marketing services, and management and finance. Use of slide This slide can be used to introduce the activities of a full service advertising agency and how it is organized. The activities of these various departments should be discussed.
  12. Relation to text This slide relates to material on pp.79-82 of the text Summary Overview The slide shows the various services of a full service advertising agency. These agency services consist of: Account services – this is the link between the agency and its clients. The account executive is the liaison and focal point of the agency-client relationship. They are responsible for understanding the advertiser’s marketing and promotions needs and interpreting them to agency personnel. Marketing services – includes marketing research and media planning. Marketing research is growing in importance as advertisers realize they need a good understanding of the target audience if they are to effectively communicate. Media departments analyze, select, and contract media sources. Creative services – is responsible for the creation and execution of advertisements. Copywriters and artists are specialists in this department. Additionally there is a production department that coordinates all phases of production of advertising and other creative work. Use of slide This slide can be used to discuss the roles of the various departments in a full service ad agency. There are many activities and many personnel involved in the planning, creating and producing of ads. The coordination of their effort is critical to the success of an IMC program.
  13. Relation to text This slide relates to material on p.83 of the text. Summary Overview Creative boutiques have developed in response to some client’s desire to use only the creative talent of an outside agency while maintaining the other functions internally. Clients seek the help of creative boutiques when an extra creative effort is required or because its own employees do not have sufficient skills in this regard. They can be used: By client companies for creative services only Full service agencies may subcontract for their creative services when busy or when not wanting to add permanent employees Other functions such as advertising planning, research and media buying may be done internally within the company or contracted out Use of slide This slide can be used to explain the role of creative boutiques in planning an IMC program. They usually are hired for their creative talent and are paid on a fee basis. They can be hired directly by a company for their specialized services or by a full service agency when they are very busy or do not want to hire full time employees.
  14. Relation to text This slide relates to material on p. 83 and Exhibit 3-5 of the text. Summary Overview This slide shows an ad from the popular Always campaign that was used by Coca Cola for a number of years and was developed by a creative boutique rather than a traditional full service agency. Edge Creative, the boutique that created this campaign, was a joint venture between Coca Cola, the Disney Company, and three former employees of Creative Artists Agency (a Hollywood talent agency). Use of slide This slide can be used to show the use of creative boutiques in the advertising agency industry. It also can be used as part of a discussion of how some advertisers have been bypassing traditional agencies and tapping into the entertainment industry for creative ideas.
  15. Relation to text This slide relates to material on pp.83-84 of the text. Summary Overview The task of purchasing advertising media has grown more complex as specialized media proliferate. As such, media buying services have found a niche by specializing in the analysis and purchase of advertising time and space. Agencies and clients usually develop their own media strategies and hire independent buying services to execute them. Some of the characteristics of media buying services include: They specialize in buying media time, particularly radio and television time Because the purchase large amounts of time and space, they usually receive large discounts and can save the agency/company money on media purchases. They are paid a fee or commission for their work The agency or client may often develop the media strategy Media buying organizations may be used to implement the media strategy and buy broadcast time and/or space in print publications Use of slide This slide can be used to show the role of media buying services. Their use is growing as more companies look for ways to get more clout from their advertising budgets.
  16. Relation to text This slide relates to material on pp. 85-88 of the text. Summary Overview Because the type and amount of service an agency performs can vary from one client to another, a variety of methods are used to compensate them for their services. Various ways for compensating agencies are shown in this slide and include: Commission method – traditional method whereby the agency receives a specified commission (usually 15%) from the media on any advertising time or space it purchases for its client. Cost-plus agreement – the client pays a fee based on the costs of its work plus some agreed-on profit margin (a percentage of total costs). This method requires careful accounting and detailed records of agency costs Percentage Charges – adding a markup to the various services the agency purchases from outside providers. These may include market research, artwork, printing, photography, etc. and range from 17.65 to 20 per cent. Fee arrangement – the agency charges a basic monthly fee for all of its services. Agency and client agree on work to be done and the amount to be paid. This is the primary method accounting for 68 percent of the compensation plans. Incentive-based – fee is based on how well the agency meets its performance goals such as sales or market share. There is a general movement toward the use of this method by many companies. Use of slide This slide can be used to discuss how advertising agencies are compensated for their work. Changes in the compensation systems have been a result of many companies moving away from traditional mass media in favor of a wider array of marketing tools and an effort to make their agencies more accountable for their work.
  17. Relation to text This slide relates to material on pp.90-92 and Exhibit 3-8 in the text. Summary Overview Many advertising agencies have had a very long relationship with their clients. This slide shows an ad run by Dr. Pepper/Seven Up celebrating its long-term relationship with Young & Rubicam, the agency that has handled Dr. Pepper advertising for over three decades. Use of this slide This slide can be used to show that long-term relationships between client and agency are still found in the advertising industry. However, the industry is changing and long-term relationships are becoming less common.
  18. Relation to text This slide relates to the material on p. 90 which discusses how some companies have terminated their long-term relationships with their agencies. Summary Overview In Chapter 3 we discuss how advertising agencies gain and lose clients and some of the long-standing client/agency relationships that have been terminated in recent years. One of these occurred in 1998 when Levi Straus & Co. terminated its 68 year relationship with Foote, Cone & Belding, San Francisco and transferred its advertising to TBWA/Chiat/Day. This move surprised many people in the advertising industry as FCB had created a number of award-winning and popular campaigns for Levi’s jeans during the ‘80s and ‘90s. The “Elevator Fantasy” spot show here is an example of the excellent creative work done by FCB. Use of this slide This commercial can be used as part of a discussion as to why companies might terminate a long-term relationship with an agency. In this situation, Levi Strauss & Co. had lost market share to other brands and felt that a change in agencies was needed.
  19. Relation to text This slide relates to material on pp. 90-92 of the text which discusses reasons why agencies lose clients. Summary Overview While many successful client-agency relationships last for years, long-term relationships are becoming less common. The various reasons an agency might lose clients are shown on this slide. Some of these are avoidable while others may be beyond the agency’s control. Use of this slide This slide can be used to show reasons why an agency can lose its clients. Understanding these problems can help agencies avoid them.
  20. Relation to text This slide relates to material on pp. 92-93 in the text that discusses how agencies gain new clients. Summary Overview Competition for accounts in the agency business is intense. For most large agencies, most new business comes from clients who already have an agency but decide to change their relationships. Thus, agencies must constantly search and compete for new clients. Some of the ways they do this are through Referrals Solicitations Presentations Public relations efforts Image or reputation Use of this slide Gaining new business is very important to advertising agencies. This slide can be used to show the various ways an agency can gain new business.
  21. Relation to text This slide relates to IMC Perspective 3-3 on pp. 91-92 which discusses Gateway’s search for the right ad agency. Summary Overview IMC Perspective 3-3 discusses how Gateway has changed advertising agencies numerous times in recent years. This slide shows a commercial created by Siltanen/Keehn during its brief tenure as Gateway’s agency in 2001-02. The campaign created by S/K featured Gateway founder and CEO Ted Waitt and a talking Holstein cow. This particular spot is called “Whip It” and features Waitt and the cow cruising down a highway in a tractor trailer singing along to a CD playing Devo's classic song from the early ‘80s. The commercial was designed to promote Gateway’s music lovers’ special which included 500X computer with a CD burner, music software package, speakers, and blank CDs. Use of this slide This slide can be used as part of a discussion as to why companies such as Gateway sometime change agencies very frequently. The advertising developed by S/K was considered to be very good. However, Gateway hired a new agency when a decision was made to position the company as more modern, cool and hip.
  22. Relation to text This slide related to IMC Perspective 3-3 on pp. 91-92 which discusses Gateway’s search for the right ad agency. Summary Overview This slide shows another Gateway commercial created by the Siltanen/Keehn agency for the company. This spot is called “Profile 4” and is a comparative ad that was used by Gateway to take on the highly successful Apple iMac PC. The computer animated spot shows an iMac alongside a feisty Gateway Profile PC and emphasizes the similar look o the two machines. However, at each point of comparison the Profile leapfrogs over the iMac and then does a back flip and issues a raspberry to the iMac as the voice-over notes its lower prices. Use of this slide This slide can be used to show how advertisers often develop new types of ads after changing agencies. This comparative ad was developed by Gateway in response to the success of the iMac and to promote the company’s own new Profile PC featuring an all-in-one design.
  23. Relation to text This slide relates to material on p. 94 of the text which discusses direct response agencies. Summary Overview One of the fastest growing areas of IMC is direct marketing. As the industry has grown, numerous direct response agencies have evolved that offer companies their specialized skills in both consumer and business markets. This slide shows the various services and departments of a direct response agency. Services include: Database management Direct mail Research Departments of a direct response agency include: Media services Creative Production Use of slide This slide can be used to discuss the role of direct response agencies, the types of services they provide and their role in the development of an IMC program.
  24. Relation to text This slide relates to material on pp. 94-95 of the text which discusses Sales Promotion agencies Summary Overview The sales promotion agency is another specialized service used by many marketers. Most companies use sales promotion agencies to develop and administer their sales promotional programs. These firms often work with the client’s advertising and/or direct response agencies to coordinate their efforts with the advertising and direct marketing programs. Services provided by sales promotion agencies include: promotion planning creative work research coordination with advertising premium design contest/sweepstakes development database marketing Use of this slide This slide can be used to discuss the role of sales promotion agencies. These agencies play an important role in the development and implementation of IMC programs, particularly for consumer packaged goods companies that make extensive use of sales promotion.
  25. Relation to text This slide relates to material on p. 95 of the text that discusses Pubic Relations firms. Summary Overview Most large companies use public relations firm. A public relations firm develops and implements programs to manage the organization’s publicity, image, and affairs with consumer and other relevant publics. This slide shows the activities of the PR firm. These include: Strategy development Generating publicity Lobbying Public affairs activities Damage control Image portrayal Program planning Use of slide This slide can be used to show the services provided by public relations firms. As companies adopt an IMC approach to promotional planning, they are coordinating their PR activities with advertising and other promotional areas. They are also integrating PR and publicity into the marketing communications mix to increase message credibility and save media costs.
  26. Relation to text This slide relates to material on pp. 95-96 of the text. Summary Overview With the rapid growth of the Internet and other forms of interactive media, a new type of specialized marketing communications organizations has evolved, the interactive agency. This various functions performed by an interactive agency are shown on this slide. Interactive agencies specialize in development and strategy of the various interactive tools such as web banner ads, web sites, CD-ROMs, and kiosks. They also have expertise in digital technology elements such as audio, video, special effects and animation. Use of slide This slide can be used as part of a discussion of the role of interactive agencies. Many companies are using interactive agencies to take advantage of their expertise in designing, managing, and supporting interactive media.
  27. Relation to text This slide relates to material on pp. 96-97 of the text. Summary Overview The final participants in the promotional process are those that provide various collateral services. These services include marketing research, package design firms, photographers, printer, video production houses, and event marketing services companies. The marketing research companies are widely used to help companies understand their target audiences and gather information that will be of value in designing and evaluating their advertising and promotions programs. The activities provided by marketing research companies include: Program implementation Information application Analysis and interpretation Primary data collection (qualitative and quantitative) Secondary data collection Use of slide This slide can be used to introduce the marketing research agency as a collateral service in the promotional process. The marketing research agency continues to be a valuable resource as companies try to better understand their targeted consumer and how best to meet their needs.