Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies MRP/IMC/M1 1

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Development and implementation of IMC program is a complex process.

It requires the skills and efforts of many people and several specialized organizations/agencies.

Which are the participants in the IMC process..?

MRP/IMC/M1 2

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Participants in the IMC process Advertiser (client) Advertising Agency Media Organizations Marketing Communication Specialist Organizations: -Direct response agencies -Sales promotion agencies -Interactive agencies MRP/IMC/M1 -PR firms Collateral Services 3

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Advertising Agency It is an outside firm that specializes in the creation, production and placement of communications message and that may provide other services to facilitate the marketing and promotions process.

Eg. Grey Worldwide, Leo Burnett Worldwide, Ogilvy & Mather Worldwide, Saatchi & Saatchi MRP/IMC/M1 4

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Media Organizations Primary objective is to provide information or entertainment to their subscribers, viewers or readers. Eg. TV channels, print media, radio etc are some of the media organizations.

A mediums primary objective is to sell itself as a way for companies to reach their target markets with their message effectively.

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Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Specialized MARCOM services They include: Direct marketing agencies – develops direct marketing programs Sales promotion agencies – develop contests, sweepstakes, premium offers etc.

Interactive agencies – use of websites, internet Public relations firms – communication and relationships with relevant publics MRP/IMC/M1 6

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Collateral Services They include: Marketing research company, package design firms, consultants, photographers, event marketing companies.

MRP/IMC/M1 7

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Client side: Organization structure for promotion: Centralized system Decentralized system In-house agency MRP/IMC/M1 8

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Centralized system CEO Production FInance Marketing R&D Human Resources Marketing Research Advertising Sales Product Planning Advertising Manager MRP/IMC/M1 9

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies In such a system, the basic functions of the advertising manager are as follows: 1. Planning and Budgeting 2. Administration and execution 3. Coordination with other departments – market research, sales dept 4. Coordination with outside agencies and services MRP/IMC/M1 10

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies CEO Decentralized system Production FInance Marketing R&D Human Resources Marketing Services Advertising Department Product Management Marketing Research Product/brand Manager Product Manager Product Manager MRP/IMC/M1 Sales Brand Manager Brand Manager Brand Manager Ad agency Ad agency Ad agency 11

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies In-house agencies It is an advertising agency that is set up, owned, and operated by the advertiser.

Sometimes they are little more than advertising departments only.

They result in cost saving, time saving and are better controlled by the management.

Eg. Calvin Klein, The Gap, Benetton MRP/IMC/M1 12

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Organizational System Advantages Disadvantages Centralized Decentralized In-house agency - Fewer persons - More top-mgmt involvement - Rapid response to problems - Increased flexibility - Cost savings - More control - Longer response time - Cannot handle multiple product lines - Ineffective decision making - Internal conflicts - Less experience - Less objectivity MRP/IMC/M1 13

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies The Ad agency’s role in IMC Reasons for using an agency: -Services of highly skilled individuals who are specialists in their chosen fields.

- Industry specific offerings of agencies -An outside agency can provide an objective viewpoint of the market and is not subject to internal company policies, biases or other limitations -It can draw on the broad range of experience MRP/IMC/M1 14

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Types of Ad agencies: -Full service agencies -Creative boutiques -Media buying services MRP/IMC/M1 15

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Planning advertising Creating advertising Producing advertising

Full range of marketing communication and promotion services

Performing research Selecting media Strategic market planning Sales promotions Direct marketing

Nonadvertising services

MRP/IMC/M1 Interactive capabilities Package design Public relations and publicity 16

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Creative services -Creation and execution of advertisements -Copywriters write the message and art department takes care of how the ad looks -For TV ads, the layout is known as a storyboard -Once the copy, layout, illustrations have been completed, the ad is turned over to the production department -Printers, photographers, typographers are hired to produce the ad -A traffic department coordinates the phases of production MRP/IMC/M1 17

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Account services -This is the link between the ad agency and its clients -The account executive is responsible for understanding the advertiser’s marketing and promotions needs and interpreting them to the agency personnel MRP/IMC/M1 18

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Marketing Services -It includes a marketing research department to gather, analyze and interpret information -The media department analyzes, selects and contracts for space or time in the media MRP/IMC/M1 19

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Management and Finance -The ad agency must be managed and perform basic operating and administrative functions such as accounting, finance and human resources.

-Large agencies employ administrative, managerial and clerical people to perform these functions.

-Almost 64% of an agencies income goes to salary and benefits for its employees MRP/IMC/M1 20

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies

VP creative services VP account services Writers Art directors TV production Print production Account supervision Board of directors President VP marketing services Media Sales Promotion Research Office management VP management and finance Finance Traffic Account Executive Accounting Personnel

MRP/IMC/M1 21

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Creative Boutiques It is an agency that provides only creative services.

Full service agencies often subcontract work to creative boutiques when they are very busy or because its own employees do not have sufficient skills.

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Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Media buying services They are independent companies that specialize in the buying of media time. Eg. Radio and television time Since they purchase large amounts of time and space, they receive large discounts and can save the small agency or client money on media purchases.

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Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies How agencies gain clients?

Through referrals – from existing clients, media and even other agencies Business Development Solicitations – seeks and establish contact with new clients Presentations – give a speculative presentation for prospective clients Public relations – participation in events, work with charitable organizations or just engage in mass media publicity Image and reputation – developed over the years working with big clients MRP/IMC/M1 24

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Referrals Presentations Public Relations Solicitations MRP/IMC/M1 Image, Reputation 25

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Poor performance How agencies loose clients Declining sales Personnel changes Poor communications Unrealistic Client demands Personality conflicts Payment conflicts Policy Changes MRP/IMC/M1 Changes in size of client or agency Conflicts of Interest – competition Change in client’s strategy 26

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Specialized Services Database management Direct mail Research

Direct Marketing Agencies

Database development, management MRP/IMC/M1 Media services Creative Production 27

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Sales Promotion Agency Promotional planning Creative research Tie-in coordination Fulfillment Premium design and manufacturing Catalog production MRP/IMC/M1 Contest/sweepstakes management 28

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies PR Firms Strategy development Public affairs Special events Generating publicity News releases, communication Lobbying Research MRP/IMC/M1 Managing crises Coordination with promotional areas 29

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Interactive Media Services Web sites Web banner ads CD-ROMs Kiosks

Interactive Media Creation

Text messages Search engine optimization MRP/IMC/M1 30

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies Collateral Services – Marketing Research Company Help clients under stand target audience Qualitative research Quantitative studies MRP/IMC/M1 31

Integrated Marketing Communications

Module 1: An introduction to IMC Concept 3: Role of advertising agencies MRP/IMC/M1 32