Sunday, 7 October 2012

Advertising Agencies

Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communication Organizations 

 Integrated marketing communication process involves majorly five Major groups, the clients i.e. the advertisers, Advertising agency, media organization which is responsible for creating modes for communicating the advertising message, specialized marketing communicating services which provide services in the area of the expertise and the collateral services who helps in planning and the execution.

Advertising agency, an outside firm that specializes in the creation, production, and/or placement of the communications message and that may provide other services to facilitate the marketing and promotions process. For example, Kraft Foods uses as many as 8 advertising agencies for its various brands, while Procter & Gamble uses 12 ad agencies and 2 major media buying services companies. Advertising agency has its both pros and cons. It’s an added expertise to any organization which adds media knowledge and eases the administration system. Apart from quality control and effective media buying it also helps in time and cost saving. The communication factor for the client to communicate properly and clearly to the ad agency else it may cause a big hindrance in effective creativity work.

Types of advertising agencies: 

Service agencies: A full service ad agency is one that provides a range of marketing services. A full services agency provides services that are directly related to advertising such as copy writing, artwork, production of ads, media planning etc. 
Modular agencies: This sells services on piece-meal basis.
In-house agency is completely owned by advertisers. It performs almost all functions that an outside advertising agency would perform and that’s why some people refer to it as full-service advertising department of the advertiser. However, the difference between an in-house agency and an advertising department is that the in-house agency can undertake to serve several other clients, if the owner so desires. Creative boutiques provides creative function instead of full service, their functions include copywriting, artwork and production of ads. 
Specialist agencies: There are some agencies who undertake advertising work only in certain areas. There are agencies that specialize only in financial services oronly in publicity or only in point-of-purchase material etc. for instanceSoubhagya advertising agency concentrate on specialized in financialadvertising 
Top 10 ad agency in India 

  • Adbur Pvt Ltd 
  • Akshara Advertising 
  • Mudra communication ltd 
  • Chaitra Leo Burnett Pvt Ltd
  • Contract Advertising (India) Ltd 
  • Crayons Advertising and Marketing Pvt Ltd 
  • Creative Advertising
  •  Enterprise Nexus Communications Pvt. Ltd
  •  Euro RSCG Advertising Pvt Ltd 
  •  Everest Integrated Communications

Limited Advantages of using marketing agency 

  • Added Expertise 
  • Media Knowledge and Unbiased Advice
  •  Easier Administration 
  • Media Buying
  • Quality Control
  • Information
  • Fending off the media
  • And when things go wrong 
  • Cost Saving 
  • Time Saving

 These agencies pitch in to the clients by using referrals, direct solicitation, and effective presentation, through it PR relations and their branded image & reputation. In addition to these Advertisement agencies other marketing communication specialists are also like direct marketing agencies (basically responsible for funding database management, direct mail, research, media services, and creative and production capabilities), Sales Promotion agencies, PR firms or interactive agencies. The role of the marketer is very important here in selecting the proper communication mix based on the requirement of the firm and thus subsequently deciding the strategy for their organization build an effective marketing communication plan. Agency Compensation: The traditional method of compensating agencies is through a commission system, where the agency receives a specified commission (usually 15 percent) from the media on any advertising time or space it purchases for its client. (For outdoor advertising, the commission is 16 / 3percent.) This system provides a simple method of determining payments, as shown in the following example.
Fee, Cost, and Incentive-Based Systems: Fee Arrangement 1 Fixed free system: the agency charges a basic monthly fee for all of its services and credits to the client any media commissions earned 2 Fee-commission combinations: The media commissions received by the agency are credited against the fee. If the commissions are less than the agreed-on fee, the client must make up the difference. If the agency does much work for the client in non -commissionable media, the fee may be charged over and above the commissions received. 
Cost-Plus Agreement Under : the client agrees to pay the agency a fee based on the costs of its work plus some agreed-on profit margin (often a percentage of total costs). This system requires that the agency keep detailed records of the costs it incurs in working on the client’s account. Direct costs (personnel time and out-of-pocket expenses) plus an allocation for overhead and a markup for profits determine the amount the agency bills the client.
Incentive-Based Compensation: The basic idea is that the agency’s ultimate compensation level will depend on how well it meets predetermined performance goals. These goals often include objective measures such as sales or market share as well as more subjective measures such as evaluations of the quality of the agency’s creative work. Companies using incentive-based 
Percentage Charges: Another way to compensate an agency is by adding a markup of percentage charges to various services the agency purchases from outside providers. These may include market research, artwork, printing, photography, and other services or materials. Markups usually Range from 17.65 to 20 percent and are added to the client’s overall bill. In addition to using ad agencies, marketers use the services of other marketing communication specialists, including direct-marketing agencies, sales promotion agencies, public relations firms, and interactive agencies. A marketer must decide whether to use a different specialist for each promotional function or have all of its integrated marketing communications done by an advertising agency that offers all of these services under one roof.


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