Advert Test 1 Organization for advert, ad agency and client

5 major players of advert (first 2)
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Terms in this set (17)
1) advertiser (ad agency's client or account) - the advertising's identified sponsor
2) ad agency- a marketing services firm that assists advertisers in planning, preparing, placing, and evaluating all portions of their advertising programs, many agencies are a part of a big 5 holding company - a conglomerate encompassing many agencies and marketing services consulting firms
3) media- advertising message comm carriers (channels, platforms) that own and manage the media access to audiences
- media vehicles (branded media) include 1) Editorial (matter) - entertainment and or information (news, commentary, and feature content) 2) Advertising
4) Vendors (collateral services, suppliers, external facilitating agencies) - advertising services firms that provide specialized services to marketers and agencies needing more expertise in areas such as research, consulting, production and software
5) Marketing communications specialist organizations
Interactive agencies:
Ad agencies offering a mix of Web design/ development, internet advert/ marketing or e-business, e-commerce consulting. Help advertisers prepare communications for interactive media such as the internet, social media, podcasting, interactive kiosks, mobile media and interactive television
Full service- does research, selects media, develops copy and produces artwork, also coordinates integrated campaigns with all marketing efforts
Limited service (specialty) agency- specializes in one aspect of the creative process; usually provides creative production work; buys previously un-purchased media space
In-house- provides range of services, depending on company needs
1) account management, account services (the suits) - the comm link between the agency and the client. Managed by the account executive (AE)
1- strategic work: planning ad strategy based on knowledge of business, marketing and creativity
2- project mgt.: organizing and managing resources so a quality project is completed on time and within budget
Types of agency services, 3Creative services- creation, execution of ads Copywriter, artists, other specialists a. ideate b. createTypes of agency services, 4Mgmt and Finance Accounting, finance, hr, new bus generation (due to frequent agency turn over by clients)Types of agenciesSome agencies specialize in certain markets, audiences, functions or industries. - Geographic market (local, regional, national, international, global) -Customer market (consumer, B2B, Children etc.) - Specialty Function (creative boutiques, online and digital, media buyers, social media)Why hire and agency?-fresh outside perspective -objective advice -agency's broad, collective experience working with many clients, industries, products, markets, and situations stimulates cross fertilization of ideas -specialization: specialty services and training experience -knowledge of current ad industry trends -top strategic and creative talent -cost savings if in house resources aren't there -agencies have relations, contacts, and subcontractors you can use -more funAgency Compensation, CommissionNegotiated in a contract after an agency is hired. 3 systems. 1) Commission (billings based) compensation - the agency is paid an agreed upon percentage (historically 15%, now is less) of billings - the cost of media space or time that the agency places for a client Advantages: Traditional and well understood, simple and easy to operate Disadvantages: Incentive to inflate media expenditures: there is a bias toward recommending more expensive media, there is also no incentive to negotiate media discounts Isn't a relationship b/w agency work and compensation (just run one ad over and over) Might bias agency to only use commissional mass media even if something else is better No incentive to do good work, its quantity not quality The percentage is arbitrary There is no guarantee of agency profitsAgency compensation, fee basedThe most common method and growing in use a. Labor-based compensation (hourly rate): Cost reimbursement for 1) staff time 2) overhead & outside materials and services (marked up - cost plus pricing) Mark up charges - based on adding a percentage charge to a variety of materials and services the agency purchases from outside suppliers b. Project based compensation: fixed/flat project fee, negotiated in advance. Retainer- monthly or yearly amount based on projected workload (labor hours) and per hour rate plus materials/ services mark up charges Advantages: Agency gets paid for the work they do Agency can make a fair profit Disadvantages: Values inputs not quality of work/ outputs Incentive to featherbed (build unnecessary costs)Agencies compensation, Incentive basedPerformance based, pay for performance, value based. Compensation based on: -quality of work/ agency performance - achieving advertising objectives: an objective/ quantitative evaluation a)communication objectives (awareness, brand image) b) sales objectives Incentive based pay is usually an additional component on top of commission or fee Advantages: Helps aligns agency's objectives with those of the client so they can partner Splits commercial risk as well as rewards b/w marketer and agency Gives agency incentive to do good work Gives agency less incentive to featherbed or recommend expensive commissionable media Disadvantages: Difficult to determine appropriate objectives and metrics for objectives to evaluate agency on, quality of work is subjective Difficult to determine agency's contribution toward metrics Difficulty to determine fair profit for agency Riskier for agencies- compensation is at least variable and difficult to predict in advance