A MARKETING RESEARCH STUDY TO DETERMINE THE DEMAND FOR A NEW FULL-SERVICE AD AGENCY IN CHESHIRE COUNTY

Prepared for Dr. Jason Little

Prepared by Kristen Bartini Jennifer Bulcao Matt Naffah Justen Nagle Sheila Nagle

Marketing Research Course Franklin Pierce College Rindge, New Hampshire December 2004

Full-Service Ad Agency 2 Contents Section Title Introduction Nature of the Problem Purpose of the Project Problem Statement Research Objectives Definition of Terms Literature Review The Full-Service Advertising Agency Market Trends Small Business Trends Payment by Results Methodology and Procedures Problem Identification Development of Survey Definition of Population Sample Size Data Collection Method Assumptions Results Question One Question Two Question Three Question Four Question Five Question Six Question Seven Question Eight Question Nine Question Ten Cross-Tabulation One Cross-Tabulation Two Limitations Sample Size Human Power Money Transportation for One Group Member Unwillingness of Businesses to Attempt/Complete Surveys Accurately Page 4 4 4 4 4 4 6 6 8 12 14 17 17 17 17 17 18 18 19 19 19 19 19 19 19 20 20 20 20 20 20 22 22 22 22 22 22

Full-Service Ad Agency 3

Discussion Conclusions Recommendations References Appendix A Appendix B Appendix C Appendix D Appendix E Appendix F Appendix G Appendix H Appendix I Appendix J Appendix K Appendix L Appendix M

23 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Full-Service Ad Agency 4 Introduction Nature of the Problem Despite the fact that there are 24 cities and towns found in the Cheshire County, there are only two full-service ad agencies. A mere two ad agencies exist to meet the needs of the hundreds of businesses that reside in this county. With a need to service a total population of 73,825, at least one more ad agency is necessary to meet the demand of these people and their hundreds of local businesses (U.S. Census Bureau, 2000). Purpose of the Project The purpose of this marketing research project is to identify an opportunity. The opportunity relates to Franklin Pierce College students who are interested in entrepreneurship. It is possible that as these students approach graduation, this prospective business idea will be taken into serious consideration. Problem Statement Research is necessary to determine if there is a demand for a new full-service ad agency in Cheshire County. The results may be used in aiding Franklin Pierce College graduate entrepreneurs with respect to opening such a business in the near future. Research Objectives The research objectives include: 1. To identify advertising services that perspective clients would find useful 2. To identify service deficiencies of existing ad agencies in Cheshire County 3. To determine the appropriate target market Definition of Terms

Full-Service Ad Agency 5 Advertising Agency. Falling under North American Industry Classification System (NAICS) code 541810, the U.S. Census Bureau defines advertising agencies as an industry comprised of, establishments primarily engaged in creating advertising campaigns and placing such advertising in periodicals, newspapers, radio and television, or other media. These establishments are organized to provide a full range of services, for example through in-house capabilities or subcontracting, including advice, creative services, account management, production of advertising material, media planning, and buying (U.S. Census Bureau, 2000). Cheshire County. According to the U.S. Census Bureau, Cheshire County is defined as Alstead, Chesterfield, Dublin, Fitzwilliam, Gilsum, Harrisville, Hinsdale, Jaffrey, Keene, Marlborough, Marlow, Nelson, Richmond, Rindge, Roxbury, Stoddard, Sullivan, Surry, Swanzey, Troy, Walpole, West Swanzey, Westmoreland and Winchester (2000). Census 2000 came to the conclusion that Cheshire County included 73,825 people, 28,299 households, and 18,790 families, with a median income of $51,043 for a family (U.S. Census Bureau, 2000).

Full-Service Ad Agency 6 Review of the Literature The Full-Service Advertising Agency According the to the Census Bureau, the NAICS code for a full service advertising agency is 541810 and is defined as an establishment primarily engaged in creating advertising campaigns and placing such advertising in periodicals, newspapers, radio and television, or other media. These establishments are organized to provide a full range of services (i.e., through in-house capabilities or subcontracting), including advice, creative services, account management, production of advertising material, media planning, and buying (i.e., placing advertising) (2004). Along with that, there are four intricate components that make up a competitive and strong full service agency. These components are diagnosing the marketing and brand problem, positioning the product in relation to the target consumer, communication, and evaluation. With out these components, and agency would not be able to survive and adapt to the ever changing industry. Diagnosing the marketing and brand problem. The first component of a fullservice advertising agency is diagnosing the marketing and brand problem. This component is research based- looking at everything from competitors, brands, product category and consumers. From there, the brand core is defined: Who are the brands prime prospects? Where are they? What are their demographics and psychographic characteristics? How does the product fit into their life style? How do they regard this type of product; this particular brand; competitive products? What one-benefit do consumers seek form this product; this particular brand? In what distinctive way can the product solve the prime prospects? What media will best reach your market?

Full-Service Ad Agency 7 This component is really important because it not only helps define your brand core but also is a great selling point for a full-service advertising agency. Some agencies sell their research capabilities to their clients in hope to win a bid over competitors. Having strong research is what will define your agency and make you stand out from everyone else. Position the product in relation to the target consumer. Using the answers from the research conducted, a strong strategy is formed that allows the agency to position the product in relation to the target consumer and emphasizes the appeal of the product toward the target consumer. Within this component, you also define goals, how to intensify brand imagery and recapturing prior users, and plan how to carry everything out. According to R.D. Smith, Organizations are successful to the extent they enjoy a strong reputation, which results from neither accident nor luck. Strategic planning can identify and evaluate an organization's visibility and reputation. No organization can afford to be a "best-kept secret" among a relatively small number of supporters; continuing effectiveness requires the development and maintenance of a strong and positive reputation (2002). Communication. After a complete strategy is created and all copy and rough layouts have been decided on and prepared, it is time to decide on what communication the agency wants to use. First the agency puts together a media plan, which is a complete analysis and execution of the media component of a campaign. Next, the agency creates a total plan, which is when roughs of the copy, layouts, and production costs, along with the media schedule and costs are presented. This eventually is calculated and creates the total cost.

Full-Service Ad Agency 8 Evaluation. Finally, an evaluation plan is created. The evaluation step in the process is both the end and the beginning (Russell & Lane, 2002). It is the moment of reckoning for the creative work, based on the objectives set in the beginning, and provides the evidence needed to refine and advance future efforts. As such, it is an accountable system (Russell & Lane, 2002). Market Trends The marketing science that our company is intending to develop is embarking on a field that is in constant transition. With the continuing innovation of new technology, it is important to stay up to date and yet grounded to reality. With more options, it is important to make informed decisions at to what is needed for each client individually. The extent of a marketing research plan should stay proportional to the size of the client and within their financial boundaries. Regardless of how technology develops, we will have more choices, more fragmentation, greater ability to target and segment, and far greater complexity (Gotlieb, 2004). Evolving and ever adapting technology holds a strong impact on an agencies success. With new resources come new responsibilities. Irwin Gotlieb conveyed the urgency of adapting to his colleagues, We have a responsibility to our clients to learn, explore, understand and innovate (2004). To properly service a client, agencies must balance creativity, innovation and finances while trying to brand a client. Potentially, these innovations could help a marketing division to be able to segment the market to an extreme precisian. The wealth of knowledge that is now being processed efficiently can be of great service to clients. Gotlieb notes how the change in marketing research will also impact the creative industry; Okay, so we fast forward 3-5

Full-Service Ad Agency 9 years and the media agency is able to segment and refine targeting. We may even be able to do addressable advertising on a large scale. What about the creative execution? All this targeting and segmentation is for naught if you run the same creative across the board. Whats the point of addressability if you are addressing everybody the same way? In fact, every segment and target would need its own strategy, its own creative brief and its own execution (2004). Progressive stride in the marketing field will force the creative counterparts to follow suit. Information is useless if you do not know how to apply it. Other industry wide quandaries have been discussed at the 4As Media Conference in Orlando, Florida. Hot topics included lack of return on investment, TVs inability to reach the public and discussion on creative output measurements. (McClellan 2004) TiVo and other media options are allowing consumers to avoid advertising while at home. Advertisers must cope with this cut back and try to rebound by working their way back into the consumers attention. McClellan summarized Jim Stengels reaction to this situation, The reason? Todays marketing model is broken. Too often, it offends, harasses, and turns off the consumer, he said. Bottom line, Marketing tactics just arent in touch with the public (2004). In response to low returns from television advertising, P&G clients have shifted their budgets. Many of their brands reserved 90% of their advertising funds for television. But 2003 changed the ground rules (McClellan 2004). Prilosec, launched by P&G used only 25% of its ad spending on television. Not knowing a commercials audience is troubling and expensive for major marketers. As stated by Scott Berg, [worldwide media director, global branding and communications of Hewlett-Packard], If I know who is watching my TV ads, why

Full-Service Ad Agency 10 would I pay for anybody who isnt? If I can track that I got a million people who was my TV commercialvs, the 15 million who tuned into the showmaybe thats how I should start paying for my media. Although Berg argues that Nelson ratings are not going to help, efforts have been initiated to increase knowledge about commercial viewership. The Association of National Advertisers and 4As (American Association of Advertising Agencies) are struggling with Nelson Media Research currently on behalf of advertisers and their agencies. Without competent knowledge about commercial audiences, billions of dollars are currently being spent blindly. According to Advertising Age, The 4A's media-research committee has asked Nielsen to provide detailed audience data from last April and October in 30-second increments so it can analyze commercial ratings trends. Nielsen's data currently focuses on program ratings. (2004) Advertisers are looking for the same in-depth data related to commercial viewing that is produced for program viewing. Nelson Media Researchs current Npower system can provide information minutely, but the calculating the data would require extensive resources that are not currently available. It's difficult to crunch the vast amounts of data that would enable them to extrapolate trends and variance between program viewing and commercial viewing. Npower technology was designed to help TV programming executives track information such as how well a program retains its lead-in audience, but the data is not gathered in a way that makes it easy to figure out commercial ratings(Advertising Age, 2004). ANA and 4As will be meeting with Nelson to further discuss the issue.

Full-Service Ad Agency 11 Speaking on behalf of the field, Bob Schmetterer discusses The Rise of Advertising, Creative thinking has always been the core of our industry. But what it means and what it demands of us is changing on a massive scale. Transformative thinking, revolutionary thinking; thinking that goes beyond media, beyond communications entirely. This is the new creativity (2003). Scmetterer also referenced a recent study that found 90% of surveyed CEOs agree that creativity is and essential part of a successful business yet less than 10% feel that they their business is meeting that creative need (2003). The significant gap comes from a Fear of Change. To further explain, Schnetterer notes, A major barrier is a company culture that does not encourage creativity or worse cuts it off at the pass with risk-averse, fearful thinking. And underlying this is one of the most ubiquitous of human fears: fear of failure. Because the risk of failure is inherent in any bold, new idea. Because you cannot achieve great success without risking failure (2003). An advertising agencies strongest selling point is its creativity. To balance between a clients desires for creativity versus strategic logic, advertisers have to dance carefully as to not come on too strong yet offer the full extent of service that the client desires. Continuing to express how importance creativity even during difficult times Schnetterer exclaims, When people are afraid of taking risks, of making any mistake at all, then they cannot make the bold leaps necessary for creative, nonlinear thinking. It's human nature. In difficult times, we tend to hunker down. Yet in difficult times, history shows that the businesses that are creative, those that go on the offensive, those that adapt and are flexible, those are the businesses that succeed while others fail (2003).

Full-Service Ad Agency 12 Agencies, in the near future will also have to restructure their billing process. We may be one of the few remaining businesses in the world where the idea, the creative concept, the strategy, the deal structure, and the deal itself belong fully to the client and are transportable from one agency to another (Gotlieb, 2004). Intellectual property is difficult to differentiate, so as the industry continues to expand with new technology, and thus need for new creatives, revamping the old billing systems will be essential to financial survival. Currently agencies spend a huge budget to develop a proposal for a prospective client. Eating the cost is industry standard. Furthermore, the rights to the ideas and concepts that are generated in these proposals and during campaigns are for the client to control. Advertisers are constantly subject to lose of money and accreditation when the intellectual property rights are given to clients. Small Business Trends Within an advertising spectrum, there is much dependence on the target market, or to who is being directly targeted. In our case, we are targeting small businesses, and in order to know whom our target market will be and how to market to them we need to know small business marketing trends. The hottest market trends for fiscal year 20032004 are described below; this information will provide our team with the necessary information on what some small businesses will be looking for to market. The youth market is dominating for much of the advertising market, considering that the teen age group spends the most money on consumer products. This can be observed by looking at simple television commercials, and magazines. Many adult magazines have simply shrunken in thickness. Opposed to teen orientated magazines,

Full-Service Ad Agency 13 which have grown increasingly in size; for example Cosmopolitan and Mens Fitness. The advertisers have targeted the teens through ads in every possible way (Small Business Trends, 2004, 3). Another popular trend for the growing teenage market is that of aftermarket car parts and accessories. This trend has been growing since 2001 and is projected to continue growing for the next few years. The smaller businesses that sell only necessity car parts are now starting to stock aftermarket performance parts due to the high demand of them (Small Business Trends, 2004, 4). The quality of life trend has always stayed strong ever since the early 1980s. People, especially the baby-boomers, are very interested in keeping their youthful selves in good condition. This has sparked the starting of many local gyms and fitness clubs such as Curves. In addition, the supply for home fitness equipment is on the rise and many people have seen infomercials and small advertisements for them. This is a perfect opportunity and almost a sure investment if set up right. In turn, advertising needs to prepare to efficiently attract people to specific types of wellness activities (Small Business Trends, 2004, 7). Along with the youth markets, it is also imperative that small businesses look at the largest group of consumers, the baby boomers. This group of consumers is constantly demanding the trendiest items on the market. Their buying is impulsive and strongly depends on the hottest consumer trends. Small businesses need to be up to date on their trends of they plan to receive business from these consumers. In addition, many of the baby boomers shop with bargains in mind. They will spend time to search for the best priced product for their dollar. A small business may have to adjust prices but if they can

Full-Service Ad Agency 14 maintain business from this target group of consumers, it will show to be profitable (Baby Boomers, 2001, 5). When planning to advertise for small businesses it is important to know the trends that some of the small businesses will follow. Also knowing what to research can help smaller advertising firms concentrate on one central service as opposed to attempting to specialize in all services. Payment by Results A major issue in new or even old advertising agencies is how to properly calculate the appropriate remuneration. This can be done in whatever fashion that the particular agency would like to do but there is a suggested way, which has a bit of a background also. For a bit of background, many advertisers and ad agencies consider their methods of remuneration for many different reasons, such as agencies want to make sure that they are remaining profitable in order to make sure they can still stay in service for their customers. The Association of National Advertisers and the European Association of Advertising Agencies decided that the average profit in percentage of 15% - 25% operating profit would be considered good or fair. This percentage is taken from the gross revenue of the company (Guidelines, 2004, 8). There are four basic guidelines for agencies to effectively profit from their advertising. The first guideline is to define and identify the area and amount of work before deciding the amount of profit they will be obtaining from the deal. This is to ensure that they are not loosing money for lots of service, and so that they do not over charge the customer. Secondly, the agency needs to decide on a profit margin that fits

Full-Service Ad Agency 15 their specific needs. If the agency has three people working on the project using a large amount of company resources than they need to make sure that the appropriate money is being made in return for the service in order to positively fund the project. The third guideline is to make sure that the remuneration is beneficial to both parties of the business deal. This allows for both the customer and the agency to walk away feeling good about the deal, also it give the opportunity for the project to be discussed in an open environment, therefore allowing for the appropriate changes to be made with both parties understanding the final agreement. The fourth guideline is to allow for constant review of all areas of the remuneration, this will allow for the company and customer to see how the percentage is being broken down. This allows for better understanding of what the project has done for the company and if changes may need to be made in the future (Guidelines, 2004, 10). There are two basic methods for remuneration that agencies use today; they are the commission system and the fee system. The commission system is when the agency will receive a certain percentage from the product or service. For example, if an agency charges a company $10,000 for a radio commercial, and they charge the average of %15, they would be profiting $1,500 from the deal. This method is beneficial because it is very easy to set up and operate, and it allows the customer to get a service at a locked price. The disadvantages to this method are that the agency may only make a certain locked percentage for both small amounts of work and for lots of work. There is also no individual pricing on specific services, so the customer may benefit too much (Guidelines, 2004, 12, 13). The second method for calculating remuneration is the fee system; the fee system is when a company charges the customer a specific fee based upon

Full-Service Ad Agency 16 variable in the company. The variable consist of the peoples salaries working on the project, equipment rentals, rent of the office space, travel costs, etc. These costs are calculated and the agency will figure out how much to charge the customer so that they will remain profitable form the situation. Some of the benefits are that the agency can accurately forecast their financial situation; also, the customer only will pay for their desired services (Guidelines, 2004, 15, 16). A few disadvantages of the fee system are that it is hard to accurately depict the workload to be placed on the workers of the agency. In addition, the customer is very skittish about involving the agency because they may fear running up a giant bill (Guidelines, 2004 17). There is no one way to calculate the remuneration for an advertising agency but it is important that the company make their decision based on the situation at hand but it is imperative that they follow these five rules of thumb; first they must provide adequate and accurate professional service to the customer. Second, the agency must be adequately compensated for their work. Third, the remuneration must provide incentive to the agency and customer. Fourth, the method of remuneration must be simple to operate and monitor. Fifth, the method must be reviewed consistently, in case it may need to be altered in any way (Guidelines, 2004, 28).

Full-Service Ad Agency 17 Methodology and Procedure

Problem Identification As a team, we identified our problem based on our knowledge of full service advertising agencies, located in Cheshire County. As a team, we also spoke with Dr. Little, and he informed us that he is only aware of a several as well. Finally, we checked online and viewed yellow pages to confirm this observation. Development of Survey After multiple drafts, we reviewed our survey both with Dr. Little and our marketing research class and made the necessary revisions. The purpose of the survey is to determine businesses opinions, attitudes and need for another full service advertising agency in Cheshire County. The questions were created based on the research objectives we set forth at the beginning of our research. We felt our questions would effectively ascertain the information we are looking to collect for our research. (See Appendix ) Definition of Population The population used in this research was based on businesses located in Cheshire County. These businesses are broken down into small (1-10 employees), medium (11-50), and large (51+). Cheshire county businesses were used because our main goal was to determine if there is a need for a new full service advertising agency in Cheshire County. We obtained a broken down list of businesses located within Cheshire County. This list gave us the name, address, and phone numbers for each company. As a team, we used this list as our sample frame to begin determining whom we would survey and in which town each team member would be in charge of collecting data. Sample Size

Full-Service Ad Agency 18 After the total population was determined, it was decided to use an arbitrary method to determine our sample size. Due to our lack of funds and human power, we had chosen arbitrarily to survey 100 businesses. Data Collection Method The survey was divided between each of the five group members and each person was responsible for attaining 20 completed surveys within their determined town. We used a non-probability convenience sampling method to attain the survey total. The businesses that agreed to take our survey where simply given the survey, and it took approximately 3 minutes to fill out. Our group surveyed at least one business in each town within Cheshire County. Though our method of sampling was a non-probability convenience sampling method, our team made an effort to sample at least 50% small businesses, 30% medium businesses, and 20% large businesses. The reason we decided to use these percentages was to assure we have a proper and accurate sample and that each business is represented throughout our research just as it is represented in Cheshire County. Assumptions It is our teams assumption that all respondents answered truthfully. We entered professional businesses and hoped to receive truthful answers. It is also our assumption that team surveyors have been honest in their attempt to collect random surveys. Finally, we also feel the validity of our survey has helped meet our research objectives because the questions we asked were based around the objectives.

Full-Service Ad Agency 19 Results Question One With a mean of 6.81, the results of question 1 showed that 25 percent of our respondents scaled the importance of advertising to the success of their company as a 7 (on a scale of 1 to 10, 10 being most vital). In addition, 19 percent scaled the importance as an 8. On the other hand, 8 percent scaled the importance as 1 (see Appendix B). Question Two 53.7 percent of respondents stated that they would not consider using an advertising agency. Consequently 46.7 percent of respondents would consider utilizing an advertising agency (see Appendix C). Question Three Clearly in our results marketing research was the service most needed by business in Cheshire County, closely followed by web site design. Those that are listed missing include the businesses that did not answer correctly or did not answer at all (see Appendix D). Question Four According to the results of question 4, those who answered the question correctly were most interested in utilizing print (see Appendix E). Question Five A clear majority of the businesses surveyed utilized internal resources for their advertising needs. This statistic could potentially represent new clientele for a new advertising agency in Cheshire County (see Appendix F). Question Six

Full-Service Ad Agency 20 Those businesses that use an advertising agency, according to our results, were overall satisfied with the agencys performance. The mean satisfaction rating level was 7.59 (see Appendix G). Question Seven Out of the businesses surveyed, 41.3 percent feel that there is no need for a new advertising agency in Cheshire County. Unfortunately, 20.0 percent of those surveyed chose not to respond, many noting that they did not feel qualified to answer the question (see Appendix H). Question Eight Out of the businesses surveyed, 61.3 percent target the general public. Only 6.7 percent target other businesses, while 32.0 percent focus on both (see Appendix I). Question Nine The results of question nine on the survey indicate that 49.0 percent of the businesses are classified as retail, while 41.0 percent were service-based companies (see Appendix J). Question Ten Closely parallel to out decided methodology, 56.0 percent of respondents were business with no more than 10 employees. Thirty-six percent of the business had a range of 11 to 50, while the remaining 8 percent over fifty employees (see Appendix K). Cross-Tabulation One Surprisingly, the cross-tabulation showed that 39 respondents rate the importance of advertising to their company as a 7 or above, but only use internal resources for such advertising (see Appendix L). Cross-Tabulation Two

Full-Service Ad Agency 21 According to the second cross-tabulation, 23 respondents who were interested in using an agency to fulfill their advertising and marketing needs were most interested in utilizing either print or internet. This is significant because a prospective agency might consider focusing their services around these results (see Appendix M).

Full-Service Ad Agency 22 Limitations Sample Size The reader should note our sample size would end up being our biggest limitation. Due to the one semester time constraint, we were unable obtain a larger sample. Human Power With only five surveyors and 24 towns to cover, the surveys were taken in towns which were most convenient for our surveyors to reach within a limited time constraint. In addition, if larger quantity of surveyors were available more towns could have been represented in our research. Money Money is considered a limitation for our research. With funding as an option we could have developed an appropriate budget in order to hire surveyors and provide adequate transportation. Transportation for One Group Member One student member did not have access to a motor vehicle in order to conduct surveys within the designated area. In addition, the student had to conduct surveys by means of telephone, which proved to be less productive for data collection. Unwillingness of Businesses to Attempt/Complete Surveys Accurately When reviewing the data we found that some businesses did not follow instructions on the survey. For example, some questions were marked with multiple answers and some questions were not answered at all. Corresponding with the misinterpretation of the survey, businesses would also fail to attempt the surveys in general.

Full-Service Ad Agency 23 Discussion According to the overall results of our study, we have determined that before opening a full-service advertising agency, a perspective entrepreneur should develop a preemptive business plan. Results of our current research suggest that local businesses may be more timid to consider utilizing an outside resource for advertising and marketing needs. While completing surveys, some respondents offered interesting perspective about the traditional business tactics of local companies. For instance, many small town businesses only advertise in the yellow pages. They also rely heavily on word of mouth recommendations. We believe the success of a new full-service advertising agency would be dependant on preliminary efforts made on behalf of the potential advertising agency. Such efforts could include a workshop for local small business owners. This workshop would discuss the importance of advertising and how marketing can improve profits. Attendants would learn simple tactics while being introduced to the new agency. State of the art technology can expand the distance between our perspective agency and its clientele. Subsequently, the potential clients of a new agency do not have to be limited to Cheshire County. This new perspective opens the potential of success. Businesses within the surround area, for instance Manchester, may have interest in utilizing a new resource for fulfilling their advertising and marketing needs. Further clients could be pulled in over the internet. Overall, we emphasize the need to recognize the specific interest of the perspective client. Any new business would have to respect local culture and trends.

Full-Service Ad Agency 24 While understanding that local tradition lies within word of mouth promotion, a new agency should be prepared to respect this practice while pushing beyond it.

Full-Service Ad Agency 25 Conclusion In direct correlation between our research objectives and survey results, we have come to the conclusion that most businesses in Cheshire County are interested in utilizing marketing research and website design. Although we began with the suggestion of a fullservice advertising agency, we conclude that concentration should primarily be on these two services. Besides these services, this potential advertising agency should also specialize in different types of print media. Unfortunately we were not able identify service deficiencies of existing ad agencies within Cheshire County. Since our research showed that the majority of businesses that use an advertising agency are satisfied, we should in turn focus on businesses that do not currently use an advertising agency. The results showed that 47.6 percent of respondents would consider using an advertising agency, but only 14.7 percent are actually; this leaves approximately one third (32.0 percent) of willing potential clientele. From this crucial conclusion, we need to determine how many clients the potential advertising agency would need in order to be successful. Our final research objective was to determine the appropriate target market of the potential advertising agency, meaning the type of business that would need the agencys services. The businesses that would need the services of the advertising agency were determined by the group of respondents that are presumably interested in an advertising agency but do not currently advertise. To go into depth further according to the results of this survey, the concentration needs to be on small businesses in Cheshire County.

Full-Service Ad Agency 26 Recommendations In the event of further research in the future, we suggest alterations in the procedure. Our research team found that businesses were less likely to comply over the phone than they were in person. When attempting to contact businesses over the phone, many businesses made excuses before considering the value of the survey. Many people were quick to dismiss our phone calls as if we were pesky solicitors. With approximately 1,200 businesses in Cheshire County, according to freeNH.com (2004), 75 surveys is not an adequate sample size. We would suggest increasing the sample size to reflect the population. Due to time and financial restrictions, we were only able to collect 75 surveys. Rewording the survey to indicate that respondents should choose one instead of using the phrase most interested in; this could help to clarify the instructions. Some of the respondents selected multiple answers although we intended for one response per question.

Full-Service Ad Agency 27 References Caudron, C. (2001). Baby boomers new leaf means new business strategies. Retrieved (October 15, 2004) from Http://www.businessfinancemag.com/magazine/archives/article.html?articleid=13779&p. Gotlieb, I. (2004). How agencies (creative & media) need to change to deal with the evolving digital landscape. Retrieved (October 14, 2004) from Http://www.aaaa.org/transcripts/transcripts.html. Institute of Communications and Advertising. Guidelines for effective advertiser/agency remuneration. Retrieved (October 15, 2004) from Http://www.icaad.com/remuneration/sub_main.html. New Hampshires Free Search Engine. Retrieved (November 9, 2004) from Http://www.freenh.com. Russell, J.T. & Lane, W (2002). Kleppners Advertising Procedure. Upper Saddle River, NJ: Prentice Hall. Schmetterer, B. (2003). The rise of advertising. Retrieved (October 11, 2004) from Http://www.aaaa.org/transcripts/transcripts.html. Www.sbinformation.about.com. Small business trends. Retrieved (October 15, 2004) from http://sbinformation.about.com-/cs/bestpractices/a/aa122202a.htm. U.S. Census Bureau. NAICS 541810: Advertising agencies. Retrieved (October 13, 2004) from Http://www.census-.gov/epcd/ec97/def/541810.htm.

Full-Service Ad Agency 28 Appendix A

Full-Service Ad Agency 29 Appendix B

Descriptive Statistics N How important do you consider advertising to the success of your company? Valid N (listwise) 75 75 Range 9 Minimum 1 Maximum 10 Mean 6.81 Std. Deviation 2.551

13% 12%

8%

3% 3% 4% 4%

9% 19% 25%

10

Full-Service Ad Agency 30 Appendix C

Statistics Would you consider using an agency to fulfill you advertising and marketing needs? N Valid Missing Mean Median Mode Std. Deviation Range

75 0 1.53 2.00 2 .502 1

54

53.7

52

50

48

46.7

46

44

42

Yes

No

Full-Service Ad Agency 31 Appendix D

Which advertising agency services would you be most interested in utilizing? Cumulative Percent 32.0 61.3 62.7 65.3 85.3 89.3 100.0

Valid marketing research branding campaign development website design consulting other Total

Frequency 24 22 1 2 15 3 8 75

Percent 32.0 29.3 1.3 2.7 20.0 4.0 10.7 100.0

Valid Percent 32.0 29.3 1.3 2.7 20.0 4.0 10.7 100.0

30
Marketing Research 29.3

25
Website Design 20.0

20

15
Other 10.7

10
Campaign Development 2.7 Consulting 10.7

Branding 1.3

Full-Service Ad Agency 32 Appendix E

What medias would you be most interested in utilizing? Cumulative Percent 26.7 61.3 73.3 77.3 89.3 90.7 100.0

Valid print radio television internet oudoor advertising other Total

Frequency 20 26 9 3 9 1 7 75

Percent 26.7 34.7 12.0 4.0 12.0 1.3 9.3 100.0

Valid Percent 26.7 34.7 12.0 4.0 12.0 1.3 9.3 100.0

Other Outdoor Advertising Internet Television Radio Print 4 1.3

9.3

12

12 34.7

10

20

30

40

Full-Service Ad Agency 33 Appendix F

Statistics How do you currently advertise? N Valid Missing Mean Median Mode Std. Deviation Range

73 2 2.01 2.00 2 .565 2

Do Not Advertise Internal Resources

16

66.7

Outside Agency

14.7

20

40

60

80

Full-Service Ad Agency 34 Appendix G

Descriptive Statistics N If you do use an advertising agency, please scale your satisfaction with your agency? Valid N (listwise) Range Minimum Maximum Mean Std. Deviation

17

10

7.59

2.093

17

6
5.3% 5.3%

5 4 3 2
1.3% 2.7% 4% 4%

1 0 1 2 3 4 5 6 7 8 9 10

Full-Service Ad Agency 35 Appendix H

Do you think there is a need for a new full-service advertising agency in Cheshire County? Cumulative Percent 48.3 100.0

Valid

Missing Total

yes no Total System

Frequency 29 31 60 15 75

Percent 38.7 41.3 80.0 20.0 100.0

Valid Percent 48.3 51.7 100.0

45 40 35 30 25 20 15 10 5 0

38.7

41.3

20

Yes

No

Missing

Full-Service Ad Agency 36 Appendix I

Statistics Who is your target market? N Valid Missing Mean Median Mode Std. Deviation Range

75 0 2.25 2.00 2 .572 2

6.7% 32.0%

61.3%

Other Businesses

General Public

Both, Businesses and Public

Full-Service Ad Agency 37 Appendix J

What category would your business best fit? Cumulative Percent 4.0 5.3 9.3 57.3 98.7 100.0

Valid non-profit industrial retail service other Total

Frequency 3 1 3 36 31 1 75

Percent 4.0 1.3 4.0 48.0 41.3 1.3 100.0

Valid Percent 4.0 1.3 4.0 48.0 41.3 1.3 100.0

1%

4%

1%

4%

41% 49%

Non-Profit Services

Industrial Other

Retail Not Answered

Full-Service Ad Agency 38 Appendix K

Statistics Identify the number of employees in your company? N Valid 75 Missing 0 Mean 1.55 Median 1.00 Mode 1 Std. Deviation .722 Range 3

5%

3%

36%

56%

1-10

11-50

51-100

101+

Full-Service Ad Agency 39 Appendix L

Case Processing Summary Cases Missing N Percent

Valid N How important do you consider advertising to the success of your company? * How do you currently advertise? Percent

Total N Percent

73

97.3%

2.7%

75

100.0%

How important do you consider advertising to the success of your company? * How do you currently advertise? Crosstabulation Count How do you currently advertise? we do not outside internal currently agency resources advertise 6 2 2 3 1 1 1 1 5 1 17 2 11 1 3 6 4 5 1 11 50 12

Total 6 2 2 3 3 7 17 14 9 10 73

How important do you consider advertising to the success of your company?

1 2 3 4 5 6 7 8 9 10

Total

Full-Service Ad Agency 40 Appendix M

Case Processing Summary Cases Missing N Percent

Valid N Would you consider using an agency to fulfill you advertising and marketing needs? * What medias would you be most interested in utilizing? Percent

Total N Percent

75

100.0%

.0%

75

100.0%

Would you consider using an agency to fulfill you advertising and marketing needs? * What medias would you be most interested in utilizing? Crosstabulation Count What medias would you be most interested in utilizing? oudoor advertising radio television internet other 14 12 26 5 4 9 1 2 3 9 1 9 1 7 7 5 15 20

print Would you consider using an agency to fulfill you advertising and marketing needs? Total yes no

Total 35 40 75