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Chapter 2

Chapter 2. The Structure of the Advertising Industry: Advertisers, Agencies, Media Companies, and Support Organizations. PPT 2-1. © 2009 South-Western, a part of Cengage Learning. Trends Affecting the Advertising and Promotion Industry.

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Chapter 2

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  1. Chapter 2 The Structure of the Advertising Industry: Advertisers, Agencies, Media Companies, and Support Organizations PPT 2-1 © 2009 South-Western, a part of Cengage Learning

  2. Trends Affecting the Advertising and Promotion Industry • The “Undoing” of Agency Consolidation and Globalization—or not • Media Proliferation, Consolidation, and “Multiplatform” Media Organizations • Media Clutter and Fragmentation • Consumer Control: Blogs and TiVos • Web 2.0 PPT 2-2

  3. Scope of the Advertising Industry U.S. Advertising Spending >$300 B Worldwide Advertising Spending >$600B PPT 2-3

  4. Structure of the Advertising Industry (text Ex. 2.5) PPT 2-4

  5. Manufacturers and Service Firms Procter & Gamble, Verizon Advertisers Trade Resellers Sears, McDonald’s Government Federal, State, Local Social/Not-for-profit Organizations United Way, Nature Conservancy PPT 2-5

  6. Ad in Context Example In addition to companies, the government makes extensive use of advertising. PPT 2-6

  7. The Role of the Advertiser in IBP • Describe the value that the firm’s brand provides • Describe the brand’s position in the market Describe the firm’s objectives for the brand in the near-term and long-term • Identify the target market(s) that are most likely to respond favorable to the brand • Identify and manage the supply chain/distribution system that will most effectively reach the targets • Be committed to using advertising and other promotional tools to grow the brand PPT 2-7

  8. Advertising Agencies: Full-Service Creative Boutique Interactive In-House Media Specialists Agencies Promotion Agencies: • Direct Marketing/ Database • E-commerce • Sales Promotion • Event Planning • Design Firms • Public Relations Firms PPT 2-8

  9. Full Service Agency Services • Account Services • Marketing Research Services • Creative and Production Services • Media Planning and Buying Services • Administrative Services PPT 2-10

  10. Agency Compensation • Commissions: • around 15% of airtime fees—in flux • 16 2/3 percent for outdoor media • web media is all negotiated • Markup Charges: • production cost + fixed % • Fee Systems: • hourly rates, or by project • Pay-for-Results: • tightly-specified objectives PPT 2-11

  11. External Facilitators • Consultants • Creative, Media, Database • Production Facilitators • Software Firms • Web tracking, fulfillment PPT 2-12

  12. Media Organizations • Broadcast • TV, radio • Print • Magazines, direct mail, • Newspapers, specialty • Interactive Media • Internet, interactive broadcast, • iPod, Cell Phone • Support Media • Outdoor, directories, sponsorship, • Point-of-purchase, branded entertainment • Media Conglomerates • Time Warner, Disney, Turner PPT 2-13

  13. Target Audiences • Household Consumers • Businesses • Professionals • Government Organizations PPT 2-14

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