Reflection paper
Chapter 4 The Scope of Advertising: From Local to Global
William F. Arens Michael F. Weigold Christian Arens
Lecture Objectives
Describe stages in agency/client relationship
Define the main types of ad agencies
Discuss how agencies get clients, make money
Explain what people do in ad agencies
Describe factors that affect agency/client relationship
Describe what advertisers do and detail org structure
Identify the various groups in advertising and their relationships
Explain how the media and suppliers help
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The Advertising Industry: Organizations
Advertisers
Agencies
Media
Suppliers
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The Advertising Industry: People
Sales personnel
Researchers
Accountants
Managers
Most often employed by agencies:
Computer scientists
Writers
Artists
Musicians
Photographers
Performers
Attorneys
Cinematographers
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Advertisers: Local
Directed to customers in the same geographic area
Specialty businesses
Government and nonprofits
Franchisees and dealers
Sellers of branded merchandise
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Advertisers: Local
Typical structure of small advertisers with high volumes of work
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Regular price-line, sale, or clearance
Types of Local Advertising
Create favorable image, increase awareness, foster goodwill
Recruit employees, offer services, sell merchandise
Classified
Institutional
Product
Ads can be created locally using local experts or
ads can be created cooperatively
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Advertisers: Cooperative
Vertical Co-op
Horizontal Co-op
Firms in the same business or part of town advertise jointly
National brand association
Manufacturer provides complete ad & shares costs
Professional quality ads
Expands advertising budget
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Advertisers: Regional and National
Regional: one or several states
National: several regions or entire country
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Advertisers: Regional and National
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Centralized Department Structure
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Decentralized Department Structure
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Transnational Advertising Structure
Divisions are responsible for their own product lines, marketing, and profits
Each division has an advertising department to coordinate sales and promotion across brands
The corporate advertising department provides information and guidance
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Global Advertising Strategy
Assumption that product use and needs are universal
Standardized approach in all countries
Extensive research to ensure ad is basic and universal
Appeal to basic human emotions and interests
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Media Around the World
McDonald’s honors an Islamic observance
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Roles of Ad Agencies
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Ad Agency
Independent
Business staff; creative staff
Contracts for media space and time
Client oriented
Understands global marketing
Agencies: Types
Specialty
Boutiques
Media Buyers
Interactive
Range of Services
Consumer
BTB
Reach
Local
National
Regional
Global
International
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Agencies: People
Account Research and Planning
Traffic Management
Administration
Account Management
Other Services
Advertising Production
Media Planning and Buying
Creative Concepts
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Ad Agency Structure
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Agencies: Compensation
Ad rate
card
price:
$100,000
Agency
buys ad
at 15%
discount:
$85,000
Agency
bills client
full ad
amount:
$100,000
Agency keeps $15,000
difference
Media Commissions
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Agencies: Compensation
Markups
Agency
buys
materials
for
campaign
Materials
cost
$85,000
Agency
bills for materials plus a
17.65%
markup
Agency bills $100,000
(cost plus markup)
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Agencies: Compensation
Fees
Fee-commission combination
Straight-fee (retainer) method
Incentive system
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Agencies: In-House
Pros
May save money
Allows tighter control
May allow greater
attention to the brand
Lower creative quality
Less experience
and talent
Loss of objectivity
Cons
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Agencies: Client Relationships
Referrals
Presentations
Community relations and networking
Solicitation
Finding and Attracting New Clients
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Client-Agency Relationship Stages
Development
Pre- relationship
Termination
Maintenance
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Client/Agency Relationship Factors
Communication
Conduct
Chemistry
Changes
The Four Cs
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Suppliers
Art studios and web designers
Printers and related specialists
Film and video houses
Research companies
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Media
Out-of-home
Digital interactive
Electronic
Direct mail
Other
Social
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