Organizing for Advertising and Promotion The Role of

Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communications Organizations © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Participants in the IMC Process Advertiser (Client) Advertising agency Media organizations Marketing communications specialist organizations Collateral services Directresponse agencies Sales promotion agencies Public relations firms Interactive agencies © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Advertising Department Under Centralized System President Production Finance Advertising Marketing research Research and development Sales © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin Human resources Product planning

Pros & Cons of Centralization + Positive - Negative Better communications Less goal involvement Fewer personnel The Centralized System Continuity of staff Longer response time Can’t do multiple product lines More top management involvement © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Decentralized Brand Management System Corporate Production Finance Sales Marketing Research and development Product management Human resources Marketing services Brand manager Ad agency Advertising department Sales promotion Merchandising © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin Marketing research Package design

Pros & Cons of Decentralization + Positive - Negative Ineffective decision making Concentrated attention Rapid problem response The Decentralized System Internal conflicts Misallocation of funds Increased flexibility Lack of Authority © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Pros & Cons of In-House Agencies + Positive - Negative Cost savings Less experience More control The In-house Agency Better coordination Less objectivity Less flexibility © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Benetton’s In-House Agency Works With Outside Agencies to Develop Ads © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Ad Agencies Have Skilled Specialists Artists Writers Researchers Photographers Media Analysts Other Skills © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Crispin Porter+Bogusky Found Creative Ways to Advertise the Mini © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Full-Services Agencies Planning advertising Creating advertising Producing advertising Full range of marketing communication and promotion services Selecting media Interactive capabilities Strategic market planning Sales promotions Performing research Nonadvertising services Direct marketing Package design Public relations and publicity © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Typical Full-Service Agency Organization Board of directors President VP creative services Writers Art directors VP account services TV Print Account production supervision Traffic VP marketing services Media Research Account executive VP management and finance Sales promotion Office management Finance Accounting Personnel © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Services Provided by Agencies Agency Services Account Service Marketing Services Creative Services The link between agency and client Research department Creation and execution of ads Managed by the account executive May include account planners Copywriters, artists, other specialists Media department to obtain media space and time © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

The Role of Creative Boutiques Provide only creative services Full-service agencies may subcontract with creative boutiques Ability to turn out inventive creative work quickly © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Media Buying Can Be Specialized Media Specialist Companies Specialize in buying media, especially broadcast time Agencies and clients develop media strategy Media buying organizations implement the strategy and buy time and space © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Methods of Agency Compensation Commissions from media Compensation Methods Fee, cost, and incentive-based systems Percentage charges © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Young & Rubicam has handled Dr Pepper for over 30 years © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Why Agencies Lose Clients Poor performance Unrealistic demands Personality conflicts Personnel changes Poor communications Changes in size Conflict of interests © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin Changes in strategy Declining sales Payment conflicts Policy changes

How Agencies Gain Clients Referrals Presentations Solicitations Public Relations Image, Reputation © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Direct-Marketing Agency Activities Database management Direct mail Media services Direct. Marketing Agencies Research Creative Production © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Activities Performed by Sales Promotion Agencies Promotional planning Creative work and research Tie-in coordination Fulfillment Premium design and manufacturing Catalog productions Catalog production Contest/sweepstakes management © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Functions Performed by Public Relations Firms Strategy development Damage control Generating publicity Program planning Image portrayal Lobbying Public affairs © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Functions Performed by Interactive Agencies Web banner ads Web sites CD-ROMs Interactive Media Creation Kiosks Text messages Search engine optimization © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Marketing Research Companies Planning and implementing research Information application Analysis and interpretation Primary data collection qualitative & quantitative Secondary data collection © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Pros & Cons of Integrated Services + Positive - Negative Greater synergy Budget politics Convenience Integrated Services Single image for product or service Poor communication No synergy © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Obstacles to Implementing IMC Many elements to handle Consistent execution Internal turf battles Compensation Measuring campaign success Agency egos Fear of budget reductions © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin