| 4500+ Great Links | Kleppners Advertising Procedure Ch. 5 |
My Related Pages | All rights reserved. This is my personal summary of Kleppner's Advertising Procedure.
Chapters 5: Agencies and ServicesThere are 10,000 agencies of various sorts related to advertising in the USA.About 8,000 are listed in the Agency Red Book. Most agencies have between 1 and 10 people. It was in the 1870s that agencies began doing the creative part of writing ads, pioneered by Charles Austin Bates. In 1875 Ayer devise the ageny-client exclusive relationship idea. In 1917 the standard agency commission of 15% was set. Media mergers led agencies to merge as well, in order to get bigger clients. Integrated services combines advertising with promotions, PR, direct marketing, package design, etc. Full service agenciesThey offer everything to do with ads.
For a new product it generally proceeds as follows 1. Diagnose the market existing brands 2. Objectives and strategy 3. Create the ads 4. Notify dealers & retailers, if appropriate 5. Billing (for space plus services) and payment to media Traditional agency organizationCreative dept : Headed up by 1 or more creative director, who are sort of like low-level managers e.g. babysitters. Account services : Responsible for agency-client relationship. Marketing services : Responsible for philosophy and strategy. Also for paying residuals to performers. Management and finance Continuing Evolution of the AgencyThey're always changing.Agencies come in all sizes. Larger ones offer "star" talent, but are expensive & inflexible. Competing accountsThe bigger the agency, and more the mergers that have been happening, the great the chance that 1 agency will have (or come to have) 2 competing clients.Client-agency relationship lengthAverage is shortening. Now at 5.3 years.BBDO has several long-term clients: GE, DaimlerChrysler, Campbell Soup, Hormel. Agency of RecordThis is an exclusive agreement.Some advertisers use >1 agencies. Agency multiple officesMany agencies have several offices in major cities in the US and abroad.GlobalizationThis has created global agencies.Example is J Walter Thompson (JWT), which is owned by WWP. They have several sets of people to their company who manage global business:
Global ad centers = Major cities where ad agencies exist. Global efficiencies Single world execution, not really so efficient in practice. Frequent translation problems! Global marketing
Agency networksSmaller agencies have formed networks so as to share data gathering tasks.Typically one member per region. They also help each other gain skills, e.g. financial. Mega-agency holding companiesAs agencies grow, client conflicts hinder growth.These holding companies own agencies that have client conflicts. Largest companies are:
Mega-agencies offer a very large pool of talent and expertise. Mega-agencies make it easy to shift accounts between agencies. Other servicesTalent & production agencies : Teaming up with ad agencies for product placement & star appearances in ads.Independent creative services : Creative talent also do independent work. A la carte : Some agencies have spun off media divisions. In house agency : Some advertisers have brought in mini agencies. These usually consist of administration & creative people; all else is bought a la carte. Rolodex agency : Mini agency consisting of account executive and creative, totaling 2 or even just 1 person, with all else hired out. Media-buying service : Service that buys media for advertisers. Coke uses Starcom for this. In-house media services : Some large advertisers have brought media buying in house. Forms of agency compensation
Other servicesBarterSome advertisers may offer barter items in exchange for airtime. For instance, a tourist bureau may offer hotel rooms & tickets to events. Unclear how media companies subsequently sell such barter items.
Research servicesAlso known as account planning.Agencies often have large in-house research departments. Quantitative and qualitative research is done. Managing integrated brandsOne agency for all media & markets works best.Ads, promotions, direct marketing etc. Agency conglomerates have formed as a means of allowing one set of agencies to handle all media & markets. Generalist agency attempts to collect all functions under one roof. Service cluster is a team of people who create ideas, not ads. In-house brand strategyAdvertisers may choose to manage their brand in house.Links
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