Chapter Objectives
• To understand how companies organize
advertising and other aspects of IMC.
• Understand the role and functions of
specialized marketing communications
organizations.
• Examine the use of advertisers, ad
agencies, and integrated service
providers.
Basic strategies
• Full service Ad agency
– Provide all the functions themselves
• In-house
– Client does it themselves (no agency)
• Mixed model
– Agency or client provides some function
– Other services provided by “subs”
Advertising Salaries
TITLE
AVERAGE SALARY
CEO
$250,000
Creative director
150,000
Chief financial officer
100,000
Art director
50,000
Copywriter
40,000
Account executive
30,000
Media buyer
27,500
Assistant (starting)
25,000
Compensation strategies
1. Commission -- 15% [or less]
– 8-10% on very large accounts
2. Fees
– fixed prices on some items,
– percentage on others
3. Cost-plus
– actual costs [!] + percentage
4. Incentive-based
– often performance [sales] based!
Advertising Under Centralized System
President
Production
Finance
Marketing
Research
Marketing
Advertising
Research
and
Development
Sales
Human
Resources
Product
Planning
Decentralized Brand Management System
Corporate
Production
Finance
Sales
Marketing
Research
and
Development
Product
Management
Human
Resources
Marketing
Services
Brand
Manager
Brand
Manager
Ad agency
Ad agency
Advertising
Department
Sales
Promotion
Merchandising
Marketing
Research
Package
Design
Category Management System
Ad Agencies Have Skilled Specialists
Artists
Writers
Researchers
Photographers
Media Analysts
Other Skills
“Personalities”
• Even full service agencies have
their own personalities and
specialties….
• McCann-Erickson
• Fallon (McElligott)
• TBWA/Chiat Day
McCann-Erickson
“OLD RELIABLE”
• CLIENTS:
– Exxon
•90 years
– GM (Buick, Cadillac,
Pontiac…)
•70 years
– Coca-Cola
•60 years
– Nestles
•60 years
McCann-Erickson
McCann-Erickson
Fallon
Fallon
TBWA/Chiat Day
A “Hip” agency
– Based in Venice Beach CA
and NY
Clients:
– Absolut vodka
– Apple Computer
– Nissan
– Sony Playstation
TBWA/Chiat Day
TBWA/Chiat Day
Services Provided By Agencies
Agency Services
Account
Service
Marketing
Services
The link between
agency and client
Research
department may
design and
execute research
programs
Managed by the
Account
Executive
Media department
may analyze,
select and
contract media
resources
Creative
Services
Creation and
execution of ads
Copywriters,
artists, other
specialists
The Role of Creative Boutiques
Creative
Boutiques
Provide Only Creative Services
Full-Service Agencies May
Subcontract With Creative
Boutiques
Other Functions Provided by
the Internal Client Departments
Media Buying Can Be Specialized
Media
Buying
Services
Specialize in Buying Media,
Especially Broadcast Time
Agencies and Clients Develop
Media Strategy
Media Buying Organizations
Implement the Strategy and
Buy Time and Space
Integrated Marketing Communications
Companies must decide whether to
use a different organization for
each marketing communications
function or consolidate them with a
large advertising agency that offers
all of these services under one roof.
Specialized Services
• Direct-response agencies
• Sales promotion agencies
• Public relations firms
Sales Promotion Agencies
Promotion Planning
Creative Work
Research
Coordination With
Advertising
Premium Design
Contest/Sweepstakes
Development
Data Base Marketing
Functions of Public Relations Firms
Strategy
Development
Damage
Control
Generating
Publicity
Program
Planning
Image
Portrayal
Lobbying
Public
Affairs