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The First World War created conditions for the growth of some of the Indian
consumer industries. After the war, new British investment followed. The
need arose for specialized advertising services. The British India Corporation,
a British firm in Kanpur, with a relatively wide range of consumer goods, set
up Alliance Advertising Associates Limited. This was probably the first
advertising agency in India to provide a wide variety of services. In 1922, Mr.
L.A. Stronach, a senior artist of Alliance Advertising, left to start his own
agency in Bombay. Thus was born a new type of business enterprise in the
service sector in India.
The Indian advertising industry had a slow start and got its first boost during
the Second World War. With the British personnel having to join the armed
forces, opportunities opened up for Indians in this new talent-intensive
business. Then followed a brief interlude of uncertainty in the years
immediately following Independence. The launching of the First Five-Year
Plan and more so the Second Five Year Plan, with the accent on rapid
industrialization, gave an impetus to the growth of advertising agency
business in India. By 1952 there were 109 advertising agencies in India with
a total turnover of Rs 3.5 corer. By 1967, the number of advertising agencies
had increased to 279 with a total turnover of Rs 35 corer. The Indian
advertising industry has really come' into its own with the growing
liberalization of the economy since the mid-eighties. According to the fourth
agency report of the journal Advertising and Marketing, the Indian
advertising industry grew by 36.5 per cent in 1992 -93, far outpacing the
growth of Indian industry. What is significant, however, is that three of the
top four advertising agencies in India continue to be subsidiaries of
international advertising agencies-Hindustan Thompson Associates and
Lintas India being the first two, and Ogilvy & Mather being the fourth. What
is more with the new interest of many national corporations in the Indian
Modular agencies
A modular agency is a full service agency that sells its services on a
piece meal basis. Thus an advertiser may commission an agency’s creative
department to develop an ad campaign while obtaining other agency
services elsewhere. Or, an advertiser may hire an agencies media
department to plan and execute a program for advertising that another
agency has developed. Fees are charged for actual work undertaken.
In House agencies
Such in-house agency also benefits the owner as it can bring revenue
through agency commission that are offered by the media and by way of
fees that are collected from outside parties for undertaking their advertising
work. Such revenue increases the funds and profits of the company. There is
another version of in-house agency whereby advertiser handles the total
agency functions by buying service unit to buy time, space and place the
ads. Such an In-house agency is an administrative center (under the
direction of an advertising director) that gathers and directs varying outside
for its operation use agency would posses. In-house agency not only provides
control over
Creative Boutiques
These are shop agencies that provides only creative functions and not
full-service. The specialized creative functions include copy writing, artwork
and production of ads, they charge a fee or percentage of full service
agencies, and as such most of them convert into a full service agency or
merge with other agencies to provide a wide range of services.
Mega agencies
A significant of 1980’s is the development of mega agency. Agencies
worldwide merge with each other serve their clients in much better way. It
was in 1986, Saachi & Saachi, a London based agency who started the
movement and at present it is the third largest agency network in the world.
Another disadvantage would be the media buying discounts you may not be
able to take full advantage of due to commission barriers within an agency,
however an agency may have better negotiating powers than your company
and save you more money in the long run anyways. There are far more
advantages to having the right advertising agency than not.
To begin with, the agencies started as one-man agents who booked space in
the
Media. Even today, in our country, there are so many one-man agents who
book space in the media. Soon the space booking was handed over to the
contact-man, and creative wordsmiths adept at sloganising undertook the
actual construction of the ad. In the course of years, the ad agency became
service-oriented, and was able to offer every possible service including
marketing, market research (MR), and public relations (PR).
Ad agencies have evolved over a period of time. These days we have mostly
studio-based agencies, some industrial and specialized agencies, and hot-
shops who only plan creative campaign by engaging the services of
freelancers.
At Madison Avenue, most of these large agencies of the world fiercely
compete for new accounts, resulting in a shift of millions of dollars of billing
from one agency to another. Advertising Age is an official publication of the
American Association of Advertising Agencies (AAAA).
In India, advertising business is worth Rs. 8,000 corers. There were only 62
advertising agencies in 1958, which increased to 168 in 1978, more than 2.5
times the numbers in 1958. There are more than 500 ad agencies today. The
oldest and largest advertisement agency in India is Hindustan Thompson
Associates Ltd. The second largest advertisement agency is Lintas.
The advertising agencies are shifting from the creative mode to the
marketing mode. Today the onus is on the agency to supply the client with
data on his industry; the days of the clients briefing the industry are almost
over. The agencies are expected to maintain database. There is a leaning
towards software for optimizing media usage, and computerization of studio
functions.
Many agencies die a premature death. Most people do not appreciate that an
agency –like any other business - must be properly managed. It is simply not
enough just to have great idea. In recent years, there has been a healthy
trend towards sound management practices, especially financial planning
and control.
accounts 'of entertaining clients. They got their elitist brand due to this
reason. But high salaries and freedom are necessary to attract talents.
He reaches out to different clients for seeking new business. Even clients
who want an agency' to work for them contact the accounts executive. This
business development work makes it virtually a marketing manager of the
agency.
The faculties of logic and reason are supposed to reside in the left-brained
people. While intuition and creativity are believed to be in the right. So far,
accounts director was considered suitable if logical and systematic, i.e., left-
brained. But if he has to motivate a team, he should be inspiring and
creative too, i.e., right-brained.
Visualisers: These are artists who put on paper what has been thought out
by the copywriter. They in fact design the ad.
The Media : Most of the media today sustain on advertising revenue. They
sell space or time. While selling space or time, they have to convince the
client about the reach of their media vehicle, the composition break-up of
their readers and the pricing of their space/time selling. They monitor the
market, survey their readers, and highlight their readers' demographic and
geographic characteristics. They also maintain relationship with the media
department of advertising agencies who buy space/time on behalf of clients.
Advertising Manager
(b) By Media
Advertising Manager
© By Product
Advertising Manager
(d) By Geography
Advertising Manager
Reporting Structure:
Centralization or Decentralization
In practice, however, it has been found that most companies follow the
centralized pattern of advertising organization. There are at least two
important reasons for it.
1. It is difficult to transfer the tasks of preparation and execution of
creative advertising from to the many without loss of efficiency to a
great extent.
2. Most companies entrust their advertising work to outside agencies
and it is more convenient with them in a centralized way.
12. Prepare instruction manuals for those who will sell and use the
product; all in all, do everything possible to make the most effective
use of the advertising investment.
13. See that all mail enquiries are answered with mailings as required.
14. See that all bills are properly checked; keep an account of funds
and prepare proper reports for management.
Company with a
Ad Agency Media Public
product or service
Questions like these are good questions, but the answer to them is
often not as clear or simple as it seems. In order to answer them,
attention must be focused not on the total costs of advertising agency
service but on the additional costs, if any which the use of an
advertising agency will involve as against the expenditure of the same
number of advertising dollars on a direct basis without agency
participation in the expenditure. The difference is a vital one, because
of the nature of historically established advertising agency
compensation methods.
purchased.
You may well ask: Why should advertising media pay my advertising
agency for services performed by the agency for me, the advertiser?
The answer is buried in the historical development of the advertising
agency, and would require more space here than its relevance to the
subject of this report warrants. What you should remember is that,
illogical or not, that is the basis of most advertising agency
compensation generally.
likely to consist of two items, each identified. The first is the base cost
which represent the sum, which the agency paid out of its corporate
pocket to the media. The second is an additional figure, representing
agency commission. In that way the agency receives the same relative
gross income from the advertising it places, as it would have received
if the media granted commissions to agencies. It is customary also to
add agency commission to various other non-commissionable
expenditures made by the agency for its advertiser-client, such as the
cost of the engravings used in advertisements (purchased by the
agency from a photo-engraving house), and the cost of the finished
artwork from which those engravings were made.
You are entitled to know just how much in the way of what kind of
service you will receive for that $11,000. the agency will (or should)
tell you. You should be on guard against being “over sold” – against
being promised $20,000 or $30,000 in service. You know from the
above figures that the only way an agency can deliver that much
service on an account your size, is for the agency to lose a substantial
sum of money in serving you.