The Agency World

1. The Agency World Chapter 2

2. The Agency World • The traditional agency • New agency structures • The growing range of specialists • Selecting an agency • Paying the agency

3. The agency worldObjectives • Understand the role of advertising agencies and the relationship between agency and client • Appreciate the factors that promote creative and effective advertising

4. Introduction • No business needs an agency • Can buy different services from separate specialists • Most businesses find it easier to use an agency

5. 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

6. 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 Full-service advertising agency

7. 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 A la carte

8. Advertising Agency Organization • Develop advertising copy and campaigns • Copywriters, production people, and creative directors Creative Services Media Services Research Services Account Management

9. Advertising Agency Organization • Selecting the best advertising media • Media planners develop overall media strategy • Media buyers procure the selected media Creative Services Media Services Research Services Account Management

10. Advertising Agency Organization • Study clients’ customers’ buying habits, purchase preferences, and responsiveness • Focus groups, mall intercepts, acquisition of syndicated research data Creative Services Media Services Research Services Account Management

11. Advertising Agency Organization • 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 Creative Services Media Services Research Services Account Management

12. Memorable Advertising Apple Computer’s “1984” TV Commercial

13. Consumer’s View Sound Strategy Persuasive Effective Advertising Break Clutter Doesn’t Overwhelm Deliver on Promises What Makes Effective Advertising?

14. Creating Effective Advertising • The Role of Creativity

15. Characteristics of creative campaigns Differentiates itself Out-if-the-ordinary Energizer Batteries Being Creative

16. Energizer Batteries • Energizer Batteries keep going, and going, and going… • Like the drum-beating bunny that reinforces the argument

17. Characteristics of creative campaigns Differentiates itself Out-if-the-ordinary Energizer Batteries Pepsi-Cola Being Creative

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

19. Characteristics of creative campaigns Differentiates itself Out-if-the-ordinary Energizer Batteries Pepsi-Cola Volkswagen Golf Being Creative

20. Characteristics of creative campaigns Differentiates itself Out-if-the-ordinary Energizer Batteries Pepsi-Cola Volkswagen Golf Bud Light Being Creative

21. Creating Effective Advertising The Role of Creativity • Spuds MacKenzie campaign • Budfrogs • Louie and Frank • Whassup?!

22. Little Caesar’s The toga-clad “Pizza, Pizza” man captures and holds the viewer’s attention and provides Little Caesar’s with a unique image vis-a-vis its more laid-back competitors

23. This simple ad dramatizes that the Volkswagen Golf is a roomy car while holding the viewer’s attention in an entertaining manner Volkswagen Golf

24. New agency structures • Three factors that influence the ways in which new agency formats have emerged

25. The new agency structures • Technological changes • Growing importance of internationally held accounts for large agencies • Recognition that different clients have diversified needs

26. 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

27. Reorganizing the old • The “Virtual Account Group” or “Virtual agency” • Uses linked computers • Intranet • Video conferencing • High tech connections

28. Reorganizing the old • “hot desking” • First come first served offices

29. 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.

30. Specialist Agencies • Media Buying agencies • Creative boutiques • Direct marketing • Account planning • Management consultants

31. Media Buying Agencies • Buy blocks of space or time from media business • Effectively became media wholesalers • An important source of advertising research

32. Creative Boutiques • Creative hot-shops • Using briefs from clients – create advertisements • Often freelancers • Assist full service agencies when under pressure

33. 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

34. Account Planning • Take over the planning role for an agency • Act as supplementary source of ideas for agency or advertiser

35. Management consultants • Provide general consultancy on brand strategy

36. 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

37. Is their creative work of a high quality? Is this confined to TV, or does it go across all media? Does this include below-the-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

38. 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) Selecting an agency

39. Agency Compensation • Commissions from media (15%) • Reduced commission system(<15%) Three Sources • Labor-based fee system • Outcome-based