The Advertising Agency- Unit 2

Ref.: Advertising and Sales promotion Management,

S.L.Gupta & V.V.Ratna
 Introduction
 Advertising agency is a facilitating institution of the advertising
industry. It helps the advertiser in the creation and production
of advertisement. These agencies provide a full range of
services to advertisers- from the conception of idea to the
exposure of the advertisement in the media

 In most of such cases the function is either looked after by the

marketing manager or the chief executive. The company’s
advertising dept. Usually relies on the outsider experts often
advertising agency.

 The agency prepares the advertisement messages, selects

appropriate media and arranges to release it.
 History of Advertising Agency
 In the beginning of the 18th century volume of adverting grew ,
newspaper which had become the main vehicles for
advertisement to several advertisers direct.

 In 1841 the advertising agency opened in Philadelphia .it

printed reprinted certain news paper.

 After civil war a new type of agents the “spare Wholesalers ‘

appeared. They purchased newspaper space in bulk and sold
to different advertisers at a higher price. This plan was initiated
by George P. Rowell a successful ad. Agent.
 Advertising Agency-Meaning
An advertising agency may be defined as
“ an independent organization of
creative and business people who
specialize in the development and
preparation of advertising plans,
advertisement and other
promotional tools and arrange for
the purchase of advertising space
and time in the various media”.
 The Agency
 A modern advertising agency offers specialize knowledge,
skills and experience which are required to produce an
effective advertising campaign. it consist of writers, artists,
media experts, researchers, T.V producers and account
executives.

 A modern advertising agency is the fountain head from

which flow most of the advertisements we see and hear in
the national and regional media .

 Madison avenue , an area in new York where several

large agencies are located, has become a symbolic name
for advertising.
 Importance of Advertising Agency
 The advertising agency does a no. of activities, starting from
planning developing and implementing the advertising
programme on behalf of different advertisers, who are
referred to as its ‘clients’ or ‘accounts’

 The agencies are independent and not owned by the

advertisers. The media or the suppliers. That is valuable
because of the agencies depth of experience in working on a
variety of marketing g problems for their various clients.

 Independence allows agencies to serve their client’s needs

better when dealing with media. Advertisers have access to
a talent pool of creative and business people.
 By arranging for the purchase of time and space, the
agency saves the client time and money because of
most media allow the agency to keep 1% of gross
amount of the money placed in their medium.

 They have had prior experience, contract with

outsiders specialists and suppliers, and access to the
latest technology.

 Their moral ethical , financial, and sometimes legal

obligation is to their clients rater than to the media or
their supplies.

 So the advertisers feel that they can get more effective

advertising and better quality work from an independent
agency.
 Types of
advertising agency

In-house agency General agency Industrial agency

Full -service agency Specialized agency

Research agency Creative boutique

Media buying
 In –house agency
• In house agency is a full service agency owned by and
operated under supervision and control of the advertiser

• In house agency is established by a company to look after

its advertising requirements. such agencies get media
recognition and hence the entitlement to get 15%
commission on the media billing which becomes a sort of
saving for the advertiser.

• Eg. In house agencies are Lintas – HUL and Mudra

Communication of Reliance
Flow ideas in an in-house agency

Parent Advertising
ideas Advertisements
organization agency
Flow of ideas of out side
advertising agency

Orgn 1

Orgn 2
Advertising advt
agency
Orgn 3

Orgn 4
 General agency
• It is general in the sense that it is willing to represent
the widest variety of accounts or clients across
industries.

• It concentrates on ‘consumer accounts’ that is

companies that make goods purchased mainly by
consumers for final usage,

• For ex: soap, toiletries, automobiles, textile,

etc.
 Types of general agency
• There are 2 type of general agency
• Full serviced agency
• Specialized agency
Full serviced agency
• Full serviced agency are equipped to serve its clients
in all areas of communication and promotion. These
agencies provide whole range of services to its
clients both advertising and non-advertising services
 Full-service advertising agency
• Advertising services • Non advertising
include services include:

• Planning • Public relation

creating • Market corporate identity
• Account planning plans,
research • Packaging
• Creative service • Organizing fairs
media planning • Exhibition
• Production of Training material
broadcast
• Advertisements, • Producing publicity
Outdoor media. articles.
 Specialized agencies
• Specialized agencies offer services in one
particular area of advertising planning. Such
outfits specialize in creative concepts ,strategy
development media planning media buying.

• Under specialized agencies there are 3 types

 Media buying agency
Creative boutique
Research agency
 Media buying agency
• The media buying services can negotiate special
discount rates with publications, radio, and TV station. It
buys the space or time in bulk and then sells this to
various advertising agencies or advertisers.

• Many times full service advertising agency or industrial

agency may also buy some of the specialized services
on media planning from media buying agency.

• Agencies like Lintas and HTA, also have

specialized media buying arms called initiative
media and fulcrum respectively.
 Creative boutique
• Creative boutique is another kind of a specialized
advertising agency. It is usually started by creative
specialists like art directors and copy writers.

• The creative boutique develops existing creative

concepts and aims to produce fresh, and distinctive
advertising messages.

• The work of the creative boutique is only to generate

creative and appealing ideas to make a persuasive
advertisement.
 Research agency
It should be based on extensive study understanding
of the following:-
• Target segment for whom the product is being
promoted, their presents needs & demand the
unfulfilled needs and their expectations.
• Environment which consists of both direct &
indirect competitors in which the product would be
selling.
• Product analysis, which includes analysis of
product, present of product ,new ways could it be
used, its features, functions, ingredients or
packaging etc.
 Industrial advertising agency
• It represent client company that makes
goods to be sold to other business.
• Computer hardware, precision equipment,
furnaces, turbines and X-ray equipment
etc. fall under in this category.
• Most industrial advertising is placed in
specialized media, like trade magazines
and other business publication.
 What do agency people do?
Campaign preparation at full services agency
proceeds in the following steps;
1. It conducts a study of the client’s product or
service, in order o determine its strengths and
weakness.
2. It analyses the present and potential market for the
product.
3. Then using its knowledge of the channels of
distribution & sales and of all the available media
4. It formulates a plan for carrying the advertising
message to prospects.
 5. Finally comes the execution of the plan
6. This includes writing and designing of
advertisements,
7. The contracting of space and time with the
media,
8. The production of advertisements.
9. Forwarding to the media.
10. Verifying media insertion
11. Billing for services used.
 Structure of a small agency
• Advertising agency organization
President/
proprietor

Production Traffic
artist Copy writer In-charge media
 Structure of full services advertising agency
Head of account team Client
brands
Account planner
Art
TV /
Creative Film producers
Copy

planning
Branch Media Media houses
head Buying
operation

print
Studio Outdoor
Printers, press
production

Finance Bank financiers, client suppliers

 Functions of advertising agency
Account
Account management Creating
planning
services

Additional Functions of
Product
services advertising agency services

Traffic
Accounting
Media
services
 (a) Account planning
Various activities performed by account planer are
• Planning the objectives of the advertising he makes use
of skills analysis, synthesis, logic and insight
• Selecting & evaluating research feedback on the basis of
which team makes judgments and takes decision
• Making the objective and the feedback relevant and
stimulating the rest of the team particularly the creative.

Hindustan Thompson, one of the largest

agencies did create an account planning
department in1978
 (b) Account Management
• The account management team comprising both senior and
junior level functionaries generally designed as the vice
supervisor and account executives work as conduits between
the advertisement agency and the advertiser

• They are responsible for taking the brief from the client which
they interpret to various specialist departments in the agency,
getting the approval of the client and supervising the work to
ensure quality production and meeting the deadlines.
 © Creative services
• Creative services are called heart and soul of advertising. the
creative services are two pronged viz., copy writing and
graphics.

• The creative s section in an advertising agency has a team of

bright, talented copy writers who contribute to the theme of an
advertisement.

• The creative energies of copy writers must be coordinated with

the design energies of the visualisers .It is job of creative
director who performs this job.

• For ex:-a young girl beating a boy in an informal football game

and the idea is to promote close-up confidence this is called
copy platform these copy writers report to their head who may
be called copy chief or chief copywriter.
 Structure of Small Agency
Creative
Director

Copy
visualizer
chief

Copy writer 2
Copy writer 1 Lay artists

Copy writer 3 Finished

Typographers
artists
 (d) Production services
• One of the most important function performed by the
advertising agency is the studio based production
department which delivers a complete approved ad copy

• For the print advertisements, the production department

does typography, lettering blocks stereos and electrons.

• The production manager organizes the work flow

Copy platform Art work proofs

Final copy corrections

 Organizational structure of a
production department
Product manager

Typography Photo lettering Photo print

Art buyer studio
assistant assistant assistant

Photos, lettering models

bullpen

Mechanical art Dept.

 (e) Traffic
• The job of traffic department is to ensure that the
work flow is smooth and that every thing is
completed on time and that all advertisements are
received by the media before the deadline

• The traffic department keep an eye on ensuring

deadlines with in the agency and catching up with
outside organization like the media houses, suppliers,
traders, etc.
 (f) Media services
• The media planners are suppose to be experts in understanding
the media markets.

• The media dept. job is to match the profiles of the desired target
with the profiles of the audience of a wide range of media.

• The media re then evaluated according to efficiency, cost and

reach.

• The media planner is assisted by the media research personnel

and media buyers.

• The media planners get the tear off copies from the media vehicle
for when the advertisement was published.
• Media buying services includes
• The scheduling of advertisements

• Interacting and negotiating with the different media for

purchase of time or space.

• Supervising that the required material for the final

advertisement are sent to the media for release in time
 Organizational structure of the
Media Dept.

Accounts executive

Media manager/ controller

Media Executive Executive

Media
planner Outdoor Film/TV/radio
buyer
media
 (g) Accounting

• It is the department taking care of the accounting

requirements of the agency.

• (h) Additional services

• Additional services includes designing a sales

promotion schemes such as contest, point of purchase
displays public relation direct marketing packaging, etc.

• for ex:-j the account executive may also write copy ,

as well as purchase media time and space for their
accounts.