Chapter 3: Organizing for Advertising & Promotion

Participants in Integrated marketing Communication Process

Organizing for Advertisement and Promotion in the Firm : Clients Role 

• The  Centralised System

The marketing activities are divided on functional lines with advertisement placed along with other marketing function like sales, market research and product planning.

Basic function performed by Marketing manager are

1. Planning & Budgeting
2.  Administration & Execution
3. Co-ordination with other department
4. Co-ordination with outside agencies and services

• The Decentralised System

In decentralised system separate manufacturing, research & development ,sales and marketing department of  various product division and product line exists. This model is largely been used in large corporations with diverse product lines.

The responsibilities and duties of brand manager is same as centralised system, but the product knowledge of the managers are limited to one product brand.

• In House Agencies

 Companies in order to reduce cost and maintain greater control over agency activities. The agency is set-up , owned and operated by the advertiser

Comparison of Advertising Organisation System

 Advertising Agency

Advertising agency provide the client with the services of highly skilled individuals who are specialist in their chosen product field. Advertising agency staff include artists, writer, media analyst, researchers and specific skills like knowledge and experience who can market the clients product and services.

Type of advertisement agency :

• Full Service Agency

Full service agency offers a full range of marketing,communication and promotional services including planning , creating and producing the advertisement, performing reseach and selecting media.

• Account services

It is the link between agency and its client. Depending on the size of the client and its advertising budget, one or more account executives serve as liaison  Account executive is responsible for understanding advertisers marketing and promotional events and interpreting them to agency personal.

• Marketing Services

Marketing services can be broadly divided into Research Department and Media Services.  Research department conducts primary surveys for gauging customer requirement and effectiveness of the existing marketing activity.The media department of an agency analyses, selects and contracts in the media to deliver clients message to the customers   

• Creative Services

Creative service is responsible for creation and execution of the marketing campaign. Copywriters are responsible for what message has to say, art department is responsible for advertisement looks,layouts team is responsible how the advertisement will look and story board is responsible for frames or panels that depict  the commercial in still form .

Advertisement Agency are structured in 2 forms

• Departmental System
• Group System

Other type of Services Offered by Media Agency

1. Creative Boutique
2. Media Buying Services

Types of Agency Compensation Systems
1) Commission from Media

Advertisement agency is compensated through a fixed pre-determined  commission from the media on any advertising space it purchases for its clients.

2) Fee Arrangement

In fixed fee method the agency charges a basic monthly fee for all its services and credits to the client any media commission earned. Sometime media agency are compensated through fee-commission method where a combination of media commission and fixed fee from client.

3) Cost-Plus Agreement

In this method client pays agrees to pay agency fee based on the cost of the work carried out plus a fixed agreed profit margin.

4) Incentive based Compensation   

the agency compensation is linked to the performance and difference they create for the brand handled by them. Based on goals agreed at the time of contract and payment is made as per the performance against the agreed terms of contract.  

Why Agency Loose clients ??

• Poor performance or service
• Poor Communication
• Unrealistic demand by the client
• Personality conflicts
• Personnel Changes
• Change in size of agency or client
• Conflict of interest
• Changes in clients corporate or marketing strategy
• Declining sales
• Conflicting compensation policies
• Changes in policies

How Advertising agency gain clients ??

• Referrals
• Solicitations
• Presentations
• Public Relations
• Image & Reputation 

Specialized Services

1) Direct Response Agency

Provides services like database management, direct mail ,media research, creative and production capability.

2) Sales & Promotion Agency 

Such agency are involved in promotion program-me likes such as contests, sweepstakes, refund and rebates,premium and incentive offers and sampling program mes.

3) Public Relation Firm

The develop and implement program-me to maintains organisation's publicity, image, affairs with customers and other relevant groups like employee,suppliers, stock-holders, government and labor organisation

4) Interactive Agency

These firm specialize in the development and the strategic use of interactive marketing tools like websites, social networking websites, banner ads, kiosks  and other places.