What is advertising?

Advertising is any paid form of non-personal

presentation and promotion of ideas, goods or

services by an identified sponsor.
The time or space devoted to it is paid for
It uses a set format to carry the message rather

than personal, one-on-one selling

It identifies the sponsor of the message

How Many Ads do You See

Each Week?
The average

person is exposed
to approximately
2000 ads each
week. Do you see
that many or
more?

DEFINITION
An ad agency is a service
provider that works for clients to
create an effective and goal
oriented advertising campaign
aimed at representing the
company positively in the eyes of
its target customers

FUNCTIONS OF AD
AGENCY
TALENT AND CREATIVE PRODUCTION : This
includes formulating plans for creative
strategies, copy or script writing, visualization,
designing, layout, shooting of films, editing ,
giving music.

Contd..
RESEARCH : This includes the study about the

product and the company by the agencies in

order to distribute the message to the public
and is used as a tool to test the consumer
reaction towards the products and services.
DISTRIBUTION A MEDIA PLANNING :
In this function, decisions are taken for the
type of message you will create for the
company and what media will be most helpful
in sending this message to the public.

Contd
MONITORING FEEDBACK : By monitoring

consumer feedback, a decision on whether to

revise the message, the medium, the target
audience or all of them can be made.

CONTD

OTHER SERVICES :
Merchandising
Public relations
Organizing exhibitions and fairs
Preparing all kinds of publicity material
Planning and organizing special events (event

management)
Direct marketing

IMPORTANCE OF AD AGENCY
OBJECTIVITY & PROFESSIONALISM :
Advertising agencies are highly professional.
Objectivity is a major virtue of ad agency.
They operate in a strange way. While they
take up advertising for others, agencies hardly
advertise themselves. Ad agencies being
outside intermediaries can be objective.

 Cost effective :
If an organization wants to hire people
to do its advertising, it can not provide
them work all through the year. Also
most experts in the fields of
advertising like directors, musicians,
photographers, charge huge amounts
and are often not affordable..

Agency
Agency Services
Services
Account
Account
Service
Service
The
The link
link between
between
agency
agency and
and client
client
Managed
Managed by
by the
the
Account
Account Executive
Executive

2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Marketing
Marketing
Services
Services
Research
Research
department
department may
may
design
design and
and execute
execute
research
research programs
programs
Media
Media department
department
may
may analyze,
analyze, select
select
and
and contract
contract media
media
resources
resources

Creative
Creative
Services
Services
Creation
Creation and
and
execution
execution of
of ads
ads
Copywriters,
Copywriters,
artists,
artists, other
other
specialists
specialists

PRIMARY SERVICES
complete a marketing analysis
develop an advertising plan
prepare a creative strategy
create advertising executions
develop and implement a media plan
handle billing and payments
integrate other marketing

communications

TOP 5 AD AGENCIES IN INDIA

Adbur Pvt Ltd
Akshara Advertising
Mudra Communications Ltd
Chaitra Leo Burnett Pvt ltd
Crayons Advertising and
Marketing Pvt. Ltd

TOP 5 AD AGENCIES IN THE

WORLD
Rank

Agency

Headquarters

Revenue (US$
millions)

Omnicom Group New York City

10,481.1

WPP Group

LONDON

10,032.2

Interpublic
Group of
Companies

New York City

6,700.0

Publicis Groupe

Paris

5,107.2

Dentsu*

Tokyo

2,887.8

agency organization
chart
Boardof
Directors
[Chairman/CEO]
President
[COO]
OtherMarketing
Communications
Services
[PR,etc.]
AccountMgmt.
Director

Strategy
ReviewBoard
[Managment
Committee]

OfficeManagement
[Personnel,
Accounting,
Legal,etc.]

Creative
ExecCD

Research
Director

MediaDept.
Director

Management
Supervisor

Associate
Creative
Director

Project
Managers

Associate
Media
Director

Account
Executive

Creative
Group:

Research
Assistants

Media
Supervisor

Asst.Account
Executive

CopySpvr.&
Copywriters

Broadcast
Production

Traffic

ArtSupervisor
&ArtDirectors

Print
Production

Media
Planner

Media
Buyer

Analysts

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

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.

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

Research
Report

TYPES OF AD AGENCY
Generalized Advertising Agencies
Creative agencies specialize in "creative" or design-

based business models: their basic interest is in the

creation of the advertisement or branding. Other ("fullservice") agencies offer design in conjunction
withmedia buying.Media agenciesconcentrate on
media buying. (In the 1990s, media and creative were
often unbundled in the interests of economies of scale in
buying media.)
The client who chooses to use a design only based
advertising agency must assume some of the
advertising purchasing. These are activities that are
routinely handled by an agency with a media buying
option.

Specialist
Advertising
In addition to the full-service, general-line
Agencies
advertising agencies, there are also agencies

that specialize in particular kinds of

advertising: recruitment, help-wanted,
medical, classified, industrial, financial, directresponse, retail, yellow pages,
theatrical/entertainment, investment,

In-House
Advertising
Some advertisers believe that they can
Agencies
provide such advertising services to

themselves at a lower cost than would be

charged by an outside agency.

Interactive
agencies
Interactive agenciesmay differentiate themselves by

offering a mix ofweb design/development,search

engine marketing,internetadvertising/marketing,
ore-business/e-commerceconsulting. Interactive
agencies rose to prominence before the traditional
advertising agencies fully embraced the Internet.
Offering a wide range of services, some of the
interactive agencies grew very rapidly, although
some have downsized just as rapidly due to changing
market conditions. Today, the most successful
interactive agencies are defined as companies that
provide specialized advertising and marketing
services for the digital space

Search
engine
agencies

Lately,pay per click(PPC) andsearch engine

optimization(SEO) firms have been classified
by some as 'agencies' because they create
media and implement media purchases of text
based ads. This relatively young industry has
been slow to adopt the term 'agency',
however with the creation of ads (either text
or image) and media purchases, they do
technically qualify as 'advertising agencies'.

Social
media
agencies

Social mediaagencies specialize in promotion

of brands in the various social media
platforms like blogs, social networking sites,
Q&A sites, discussion forums, microblogs etc.
The two key services of social media agencies
are:
social media marketing
online reputation management

Healthcare
Healthcarecommunications agencies
communications
specialize in strategic communications and
marketing services for the Healthcare andLife
agencies
Scienceindustries. These agencies distinguish
themselves through an understanding of the
strict labeling and marketing guidelines
mandated by theU.S. Food and Drug
Administration(FDA) and industry group
guidelines, most
notablyADVAMEDandPHARMA.

Medical education
agencies
Medical education agencies specialize in creating
educational content for the Healthcare and Life
Science industries. These agencies typically
specialize in one of two areas:
Promotional education- education and training
materials tied to the promotion of a given product
or therapy
Continuing medical
education-accreditededucation and training
materials created for continuing physician and
medical professional education.

Planning The Best

Message A I D A
A - Attention
I - Interest
D - Desire
A - Action

Referrals
Referrals

Presentations
Presentations

Solicitations
Solicitations

Public
Public Relations
Relations

Image,
Image, Reputation
Reputation

Personnel
changes

Changes
in strategy

Poor
performance
Unrealistic
demands

Poor
communications
Changes
in size

Personality
conflicts

Conflict of
interests

Declining
sales

Payment
conflicts
Policy
changes

Advertising Strategy

Target Audience
Advertising
Objectives
Advertising Budget

Creative Strategy

Advertising Media and

Programming Schedules
Evaluate the Effectiveness of
the Strategy

Role of the Advertising Agency

Target Audience
Advertising Objectives

Advertising Budget

Creative Strategy

Advertising
Agency

Advertising Media and

Programming
Evaluate the Effectiveness of the
Strategy

Advertising Agencies in
Perspective

Fast change has come to the advertising industry.

Huge, integrated agencies face a challenging future.

Do clients want a full-service agency?

The business model is in need of change.

The basis of compensation continues to be debated and altered.

Specialists (e.g. media buying services) are being used.

Importantly, the core of the creative process is the agency.

Several methods are available to evaluate advertising results.

+ Positive

- Negative

Cost
Cost
Savings
Savings

More
More
Control
Control

Better
Better
Coordination
Coordination

2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Less
Less
Experience
Experience

The
The
In-house
In-house
Agency
Agency

Less
Less
Objectivity
Objectivity

Less
Less
Flexibility
Flexibility

In 1983, Apple computer was planning the introduction of macintosh pc :- to

take on IBM. Apples strategy called for the introduction of the macintosh to be a
major event that would generate immediate support for the new product. The
ad agency, chiat/ days, was given the creative challenge of coming up with a
blockbuster idea that would result in a dramatic commercial to introduce the
mac. Chiat/days team developed a commercial based on the concept of Big
Brother.(purportedly symbolizing IBM) from George Orwells classic novel 1984.
Who castigated communism with Big Brother attitude. The ad. Used stark
images of orwells dystopia (life is extremley bad because of deprivation or
oppression or terror due to communism) and a dramatic scene of a young
women throwing a mallet (wooden hammer) through a movie screen to
desteroy the controling force. More than $ 500000 was spent to the produce
the 1984 commercial.
when the commercial was first shown at annual sales meeting in
october 1983, there was stunned silence followed by a 15 minutes standing
ovation. Apple was ready to showcase the 60 second commercial in two spots
during the 1984 super bowl that was cost $ 500000 each. But there was one
problem getting approval from apples board for the avant-garde ad and the
million dollar media purchase. The board thought the commercial was too

Cont.

Controversial and might be detrimental to apples image, particularly in the

business market. The cost-consious board also thought the super bowl rates
were too expensive and asked the agency to sell off the two spot. The agency
could sell one spot, and the offer for the second spot was not attractive. Two
days before the game , apple board reluctantly approved airing the commercial
after a great deal of persuasion by the agency for the second spot. The Super
bowl is the biggest football game of the year, in USA, a premier marketing event.
It draws the largest TV audience, its appeal spans various age groups, regions
and it is seen in more than 60 countris. It is one occasion where as much
attention is paid to commercials as to the program and the spots receive
enormus amount of hype and publicity and its exorbitant cost could be matched
by huge viewing audience.
The super bowl showing of 1984 was the only time it ever appeared
as a commercial spot on network TV. The impact of the ad was tremendous.
Most importantly, the ad. Helped Apple achieve a very ambitious sales goal.
Apple projected sales of 50,000 macs in the first 100 years: actual sales
surpassed 72,000 units.

Questions:1)Advertising New macintosh on a super bowl was indeed a famous cutting

edge creative work and a bold initiative. Critically evaluate the role and
contribution of the agency and the Apples board.
2)How did Apples bold 1984 commercial score on all fronts?
3)1984 commercial was perhaps the beginning of integrated marketing
communications. Elaborate.