2-1 Copyright © 2009 Pearson Education Canada CHAPTER 2 The Advertising Industry.

2-1 Copyright © 2009 Pearson Education Canada

CHAPTER 2

The Advertising Industry


Learning Objectives

Identify the organizations that comprise the advertising industry

Identify and describe the various advertising management systems used by clients

Identify the roles and responsibilities of clients in the advertising development process

Describe the roles and responsibilities of the agency in the advertising development process

Continued…


Learning Objectives (cont.)

Discuss the nature of relationships between clients and agencies

Distinguish among the various types of advertising agencies

Outline the organizational structure of agencies and the functions of agency personnel

Identify the concepts associated with managing a client’s business

Identify the methods of compensating advertising agencies.


Composition of the Advertising Industry

The Canadian advertising industry comprises three primary groups:Advertisers (the Client)Advertising AgenciesMedia


Advertisers

The Association of Canadian Advertisers (ACA) serves the interests of companies that market and advertise in CanadaCanadian advertisers include:

ManufacturersRetailersService firmsTechnology companiesGovernmentsNon-profit organizations


Advertising Agencies

The Institute of Communications Agencies (ICA) is the national association representing full-service ad agencies.Service organizations responsible for creating, planning, producing and placing advertising messages for clients.

Most of the larger ad agencies in Canada are subsidiaries of larger American agencies.

Continued…


Advertising Agencies (cont.)

The different types of advertising agencies are:

Full-service (complete range of services)

Specialists (limited services in certain areas of expertise)


Media

The Canadian Media are divided into numerous categories:Broadcast (radio and TV)

Print (newspaper and magazines)

Out-of-home (transit and outdoor)

Direct-response (direct mail and direct-response TV companies)

Digital (Internet and mobile communications)


Other Groups in the Advertising Industry

Advertising Support Companies

Media Support Companies

Research and Audience Measurement Companies


Client – Side Advertising Management

Brand or Category Management

Regional Management

International Management


Advertising Manager (Client-Side)

Describes the individual responsible for advertising in the client organization.Usually mid-management

Possess analytical, planning, and leadership skills, as well as knowledge and experience in the operation of the advertising industry


Key Areas of Responsibility - Advertising Manager

1. Advertising Planning and Budgeting

2. Coordinating Advertising with Other Marketing Communications

3. Monitoring the Advertising Program

4. Evaluating the Advertising Program

5. Liaison with Advertising Agency


Advertising Agency Roles and Responsibilities

The services that the advertising agency offers are:

1. Experience and expertise in communications

2. Planning assistance

3. Objectivity in the planning process

4. Active liaising with Clients


Key to business success depends on:A healthy and prosperous client-agency relationship

A partnership that encourages open and honest communications

Trust and respect for each other

Continued…

Client-Agency Relationships


Client-Agency Relationships (cont.)

The connection between client and agency is often very delicate and can be broken for various reasons.Deteriorating relationships contribute significantly to the amount of account shifting that occur in Canada each year.

Continued…


Client-Agency Relationships (cont.)


Account Shifting

Client-agency relationships sour for a variety of reasons:

Quality of ads or service provided

New communications demands not adequately served

Philosophical differences

Lack of team concept

Client consolidates their business with fewer agencies

Conflict situations


Types of Advertising Agencies

Services required by client determine the type of agency they work with.Full-service agencies

Creative boutiques

Media-buying services

Other boutiques and communications specialists


The Full-Service Agency

Appeal strongly to advertisers that need a wide variety of services:Account ManagementCreative planningCreative development and executionMedia planning and placementSales promotionPublic relations and direct-responseInteractive communications


Structure and Management of the Advertising Agency


Account Management

Account Director

Account Director

Account SupervisorAccount

Supervisor

Account ExecutiveAccount Executive


Creative Department

Creative Director

CopywriterArt

Director

Creative director oversees the team.

Team develops creative concept.


Media Department

Responsible for planning and placement of advertising time and space.The functions of the media department are:

Media planning

Media buying

Media research

Continued…


Media Department (cont.)

Position responsibilities in the media department are:Media planner

Media buyer

Media supervisor


Managing the Client’s Business

Agency Teams

Account executive and account supervior

Art director and copywriter

Media planner and media buyer

Competing Accounts

Agency of Record


Agency Compensation

Commission SystemStandard Commission Rate (15%)

Reduced Rate Commissions

Fee System Minimum Guarantees

Hourly Rates

Costs Plus Profit

Continued…


Agency Compensation (cont.)

Payment by ResultsUsually a reduced rate percentage plus incentives for achieving goals

Typical goals may be brand market share, advertising effectiveness and advertising recall

2-1 Copyright © 2009 Pearson Education Canada CHAPTER 2 The Advertising Industry.

Documents

advertising managementbrand

advertising programliaison

advertising programevaluating

advertising industryidentify

advertising industrychapter

advertising messages

advertising agency offers

fullservice ad agencies