Every organization broadcast their products or services through the medium of advertising agency. In this lesson, students will study about how advertising agencies assist marketers by providing the correct medium of broadcasting their ad.

1. Advertising Agency
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2. Meaning
 An advertising agency or ad agency or advert agency is a service
based business dedicated to creating, planning, and
handling advertising (and sometimes other forms of promotion) for its
clients.
 An ad agency is independent from the client and provides an outside
point of view to the effort of selling the client's products or services.
 An agency can also handle overall marketing and branding strategies
and sales promotions for its clients.
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3. FUNCTIONS OF ADVERTISING
AGENCIES
 ACCOUNT MANAGEMENT
 RESEARCH TARGET MARKET AND ENVIRONMENT FOR THE
CLIENT
 CREATIVE CONCEPT
 ADVERTISING PRODUCTION-PRINT AND BROADCAST
 MEDIA PLANNING AND BUYING
 MEET TARGET DATES ON CAMPAIGNS
 ESTABLISH STRONG RELATIONSHIP WITH CLIENT
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4. Agency Organization Chart
Print
Traffic
Production Production
Broadcast Analysts
Other Marketing
Communications
S ervices
[PR, etc.]
Asst. Account
Executive
Account
Executive
Management
S upervisor
Account Mgmt.
Director
Copy S pvr. &
Copywriters
Art S upervisor
& Art Directors
Creative
Group:
Associate
Creative
Director
Creative
Exec CD
Research
Assistants
Project
Managers
Research
Director
Media
Planner
Media
Buyer
Media
S upervisor
Associate
Media
Director
Media Dept.
Director
S trategy
Review Board
[Managment
Committee]
Office Management
[Personnel,
Accounting,
Legal, etc.]
President
[COO]
Board of
Directors
[Chairman/CEO]
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5. Account Management
 liaison between agency and client
 responsible for understanding...
 the client’s business
 the client’s marketing needs
 strategy development
 representing client point of view within the agency
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6.  account management director
 management supervisor
 account supervisors
 account executives
 assistant account execs
 account coordinators
 traffic
Traffic
Asst. Account
Executive
Account
Coordinator
Account
Executive
Account
Supervisor
Management.
Supervisor
Account Mgmt.
Director
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7. Creative Department
Responsibility
 The creative department is responsible for creating and producing
the print and broadcast advertising
 strategy is key
 Good creative work is always guided by a creative strategy that
sets forth goals to be accomplished and key message points to be
relayed
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8.  executive & group creative directors
 creative director
 associate creative director
 copywriters
 art directors
 broadcast producers
 print production managers
 traffic coordinators
Print
Traffic
Production
Broadcast
Production
Copy Spvr. &
Copywriters
Art Supervisor
& Art Directors
Creative
Group:
Associate
Creative
Director (ACD)
Creative
Director (CD)
Executive
Creative
Director (ECD)
Strategy
Review
Board
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9. Media Department
 The media department has two main functions - planning and buying.
 The planning group handles more strategic marketing and media
issues.
 The buying group handles media negotiations and implementation.
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10.  media director
 associate media directors
 media supervisors
 media planners
 media buyers
 media analysts
Analysts
Media
Planner
Media
Buyer
Media
Supervisor
Associate
Media
Director
Media
Director
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11.  mega-agency media departments have now become profit centers

 agencies have set up their media departments as free-standing units
 many large clients now look at media as a separate service
Big changes in the media department
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12. Research department
 interpret market environment
 gather and analyze research data.
 primary and secondary techniques
 determine consumer needs/perceptions
 understand problems
 advise how ads can meet strategic goals
 help find solutions
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13.  research director
 research project managers
 research assistants
 outside research specialists
Research
Suppliers
Outside
Research
Assistants
Project
Managers
Research
Director
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14. Auxiliary Agency Functions
 Account planning
 Strategy/creative review board
 Office management
 human resources
 legal services
 accounting
 recruitment
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15. 3 ways agencies make money
 Commissions
 usually 15% of gross costs
 Fees
 usually based on negotiated hourly rate
 Incentives
 still relatively new and problematic
 usually based on performance goals
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16. Agency Commissions
 Media commission system
 15% media commission
 Adjustable commission rates
 negotiate to match client budget
 sliding scale
 Markups-production & service
 add a percentage markup to costs
 17.65% of net = 15% of gross
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17. 4 Types of Fee Systems
 Fixed fee (retainer)
 Cost-plus fee
 Performance fee
 Hybrid fee & commission
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18. Incentives
 In the theory, a good way to work
 Get paid based on how well you do, not how much you bill
 In practice, difficult to implement
 If client makes final decision (instead of agency), how can agency be
responsible for final results?
 Results based on many factors, such as competitive efforts, not just
advertising
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19. New Business
 Three primary sources
 build existing client’s business
 add and sell new IMC services
 solicit new accounts
 Two ongoing problems
 “spec” work
 teams “walking” with accounts
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20. Types of Ad Agency
 Full service agencies
 Creative agencies
 Specialized agencies
 In-house advertising agencies
 Digital agencies
 Search engine agencies
 Social media agencies
 Healthcare communications agencies
 Medical education agencies
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21. Thank You!!
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