Marketing homework
superkevin 101..
Chapter5-AdvertisingManagementPart2-AY2019-2020.pptx
Advertising Campaign Management Part 2
Jennifer Sundstrom-Fitzgerald
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Learning Objectives
Identify when a company should employ an external advertising agency rather than completing the work in-house
Describe how companies choose advertising agencies
Analyze the different types of advertising agencies
Play “Brownstein Pearson Video” before Part 2…
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Creating and Managing Campaigns
Two main considerations:
Should the work be done in-house?
Should we hire an outside agency?
Companies have to decide whether they will perform the advertising work in-house or obtain an outside advertising agency.
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Creating and Managing Campaigns
Benefits of an in-house team:
Lower costs
Consistent brand message
Better understanding of product and mission
An in-house creative team normally keeps costs lower. It is easier to ensure a consistent brand message across campaigns. An In-house team has a better understanding of the product portfolio and the mission and vision of the company b/c they are “Live It” everyday.
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Creating and Managing Campaigns
Benefits of an in-house team:
Faster ad production
Work closely with CEO
Lower turnover rate in the creative team
Other benefits involve the in-house team working closer with the CEO. This helps move the production process along much faster and there is usually a lower turnover rate within the in-house creative team. This model worked well at TFI. We also worked with Red Tettemer on large scale launches like “Titanic” and purchased media directly and via Harmelin Media.
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Crowd-Sourcing Done “In-House”
Ideas come from consumers
Generates Buzz/WOM
Outsource final creative is often necessary
Overall cost not lower
The use of “Crowdsourcing” is a recent alternative to choosing an advertising agency. Crowdsourcing involves seeking ideas from current customers or the general public. One company that has successfully used crowdsourcing is “Lays” and its “Do Us a Flavor” campaign. For the past few years. Lay’s runs contests for “recipe and advertising Ideas” and prompts consumers to post ideas on their website. Consumers are then automatically entered into a contest where various prizes are given.
Crowdsourcing content for a website or ideas for an IMC campaign is often very effective however, it isn’t always cost-effective. Those “ideas” still have to be professionally researched, produced and launched which normally requires the assistance of an outside agency.
Therefore, the biggest benefit of crowdsourcing is garnering content from actual customers rather than a brand trying to figure out ideas for fresh web content, advertising themes, etc. on their own.
Lays source: https://digit.hbs.org/submission/crowdsourcing-your-next-chip-flavor-lays-do-us-a-flavor-campaign/
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Types of External Advertising Agencies
Boutique to full-service agency examples:
Advertising Design and Implementation
Market Research
Media Planning and Buying
Direct Response Marketing
Advertising agencies come in all shapes and sizes. They range from small boutiques that offer only one type of service or… full-service agencies that offer a complete spectrum of services. We’ll first look at Boutique agency examples.
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Types of External Advertising Agencies
Boutique to full-service agency examples:
Consumer and trade promotion specialists
Online and digital agencies
Social media agencies
Public relations agencies
Boutique agencies are highly specialized and normally provide expertise in one area - examples include what you see here as well as ethnic marketing, sports marketing, marketing research and media planning.
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Full-Service Agencies
Advice on how to develop target markets
Specialized services for business markets
Company image and theme guidance
Example: Wieden+Kennedy & Old Spice
Full-service agencies provide a wide array of services for clients, everything from marketing research to strategy development to ad design and launch preparation. Most provide guidance on business markets as well as consumer markets. They also help with brand image challenges for mid to large companies – like our examples with McCann Erickson and MasterCard, Leo Burnett and McDonald’s and Weiden and Kennedy and Nike and Old Spice. Click link for WK.com
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Full-Service Agencies
Services can include:
Target market research and development
Logo and tagline design
Advertising management planning
Media planning and purchasing
Full-service agencies can offer advice and guidance on developing target markets, a brand’s image, logo and tagline development. Media planning and buying is also done with a full-service agency, or one of its subsidiaries. When I worked as a brand manager at TAG Heuer, our full service ad agency was Saatchi and Saatchi and they took care of everything I just mentioned except for Public Relations…we contracted with Nike Communications based in NYC – this boutique agency was responsible for TAG Heuer’s celebrity endorsers, corporate partners (BMW and SGK were common) and Destination Sponsorships (Vail and Beaver Creek Resort in Colorado.)
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Choosing an Agency
Set goals
Select process and criteria
Screen initial list of applicants
Reduce list to two or three viable agencies
Request creative pitch
Choosing an agency requires time and effort. Companies who shortcut the process often end up choosing the wrong agency. The first step is to select goals. Goal setting should occur before contacting any agencies. Doing so will prevent any biases towards a particular agency. It will help the company understand what it wants from an agency and where the company wants to go.
Then the company should decide on a process and criteria before contacting any agencies. Once proposals have been received, the list can be narrowed down to two or three viable agencies. A creative pitch is then requested from each of the agencies to determine the best choice.
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Evaluation Criteria
Size
Relevant experience
Conflicts of interest
Creative reputation and capabilities
Again, prior to talking to agencies, the client company should determine its evaluation criteria including:
The size of the agency should be aligned with the size of the client company – When Fox School worked with Harmelin Media it did not get good customer service; Our account was too small. Now that Temple U contracts with Harmelin, customer service, pricing and quality of media plans have improved dramatically.
The agency should have experience in the industry, but not be represent a direct competitor. This would be a conflict of interest. When I was at TAG Heuer, we were on the only luxury timepiece brand contracted with Saatchi and Saatchi.
The creative reputation and capabilities should be considered since the primary role of the agency is to generate creative ideas.
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Evaluation Criteria
Production capabilities
Media purchasing capabilities
Other services available
Client retention rates
Personal chemistry
Here is additional evaluation criteria that should be vetted by the client or brand:
The production (example: do they film TV and digital ads on site) and media purchasing capabilities are not essential. Some agencies do this, while others contract out to boutique shops.
You should look at client retention rates to ensure the agency has a good reputation in the industry.
Personal chemistry is important because individuals from the two companies work closely together – very often on a daily basis. Example, When I worked at TAG Heuer, I was in contact with my counterpart at Saatchi and Saatchi several times per day.
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Budget Allocation Decisions
Amount of Advertising Budget is a major consideration when choosing an Agency:
Cost Distribution Rule: 75 – 15 – 10
75%: Media buys
15%: Creative work (agency)
10%: Ad production
Costs are a major consideration in selecting an outside agency. When looking at the total cost of an advertising campaign, The GENERAL rule to follow is: 75% of the money should be spent on media buys, 15% on creative work by the agency, and 10% on production of the ads. But of course, this does depend on the industry and brand. TAG Heuer followed this rule as did Estee Lauder but brands like Tesla follow different guidelines.
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The Creative Pitch
2 to 3 agency finalists
Formal “free” presentation
Specific problem/situation
Expensive for agencies
Once the agency list has been narrowed down to two or three finalists, it is time to ask for a creative pitch. Agencies are given a specific problem to address. Creative pitches are expensive for agencies, so companies need to be serious about an agency when requesting a pitch. From the creative pitches, the company should select the agency that offers the best plan and the one that is the best fit. Talk about Fox pitch to Red Tettemer, Brownstein and 160/90.
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Key Advertising Personnel
Client side “Rolex”:
CEO/CMO/CIO
VPs of marketing, new product development, and information technology
Brand managers
Assistants and coordinators
There are key individuals on both the client side and agency side we need to be familiar with…
The CEO, CMO and CIO and VPs of Marketing, New Product Developers and the IT team will be involved in the beginning and sporadically throughout the length of the contract. The Brand Managers and his/her assistants and coordinators will be the main liaisons and have daily contact with the agency team. They are also responsible for updating senior staff with important developments and needed approvals. Because of the increasing investment in digital marketing efforts, members of the IT team, specifically the CIO and Web Master, will also be an integral part of the client team.
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Key Advertising Personnel
Agency side “Rolex”:
President
Business manager
Creative director
Account executive
Other managers/planners
On the agency side, the account executive is the main liaison between the company and the agency and represents the client within the agency. The president and business manager are involved during the early phase of the relationship and then on a sporadic level to assist in overall planning. Their main role is to see the total picture. The creative director is responsible for the creative aspect of the campaign and works with the agency’s creative staff. Other managers and planners handle production and/or media scheduling and assist with getting approvals from senior staff.
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Top Advertising Agencies in the World
Examples:
Omnicom Group, New York City - $15.3 billion
Publicis Groupe, Paris - $9.6 billion
Interpublic Group, New York City - $7.5 billion
Dentsu, Tokyo - $6.0 billion
Source: https://co.agencyspotter.com/50-largest-marketing-companies-in-the-world/
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Learning Objectives
Identify when a company should employ an external advertising agency rather than completing the work in-house
Describe how companies choose advertising agencies
Analyze the different types of advertising agencies
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