advertising agencies

structure & organization

what agencies do. and how theyre organized to do it.

7 primary services:
complete a marketing analysis develop an advertising plan prepare a creative strategy create advertising executions develop and implement a media plan handle billing and payments integrate other marketing communications

4 functions of full-service agencies

account management creative media planning and placement research

agency organization chart

Board o f Direct ors [Cha irm an/CEO] Pre sident [COO]

Other Mark e ting Com munica tions Services [PR, e tc. ]

St rate gy Review Bo ard [Mana gme nt Com mitt ee]

Off ice Manag eme nt [Perso nnel, Acco unting, Lega l, et c. ]

Acco unt Mg mt . Direct or

Crea tive Exec CD

Rese arch Direct or

Media Dept. Direct or

Manage ment Supe rvisor

Asso ciate Crea tive Direct or

Pro ject Manage rs

Asso ciate Media Direct or

Acco unt Executive

Crea tive Group:

Rese arch Assist ants

Media Supe rvisor

Asst . Acco unt Executive

Copy Spvr. & Copywrit ers

Art Supervisor & Art Directors

Media Planner

Media Buyer

Broa dcas t Pro duct ion

Print Pro duct ion

Analyst s

Tra ffic

account management
liaison between agency and client responsible for understanding...
the clients business the clients marketing needs strategy development

representing client point of view within the agency

account management
Account Mgmt. Director Management. Supervisor Account Supervisor Account Executive Asst. Account Executive Account Coordinator

Traffic

account management director management supervisor account supervisors account executives assistant account execs account coordinators traffic

creative department
responsibility
the creative department is responsible for creating and producing the print and broadcast advertising

strategy is key
good creative work is always guided by a creative strategy that sets forth goals to be accomplished and key message points to be relayed

creative department
Strategy Review Board Executive Creative Director (ECD) Creative Director (CD) Associate Creative Director (ACD) Creative Group: Copy Spvr. & Copywriters Broadcast Production Traffic Art Supervisor & Art Directors Print Production

executive & group creative directors creative director associate creative director copywriters art directors broadcast producers print production managers traffic coordinators

media department
The media department has two main functions - planning and buying. The planning group handles more strategic marketing and media issues. The buying group handles media negotiations and implementation.

media department
Media Director Associate Media Director Media Supervisor Media Planner Media Buyer

media director associate media directors media supervisors media planners

Media Plan

media buyers
media analysts

Analysts

big changes in the media department

mega-agency media departments have now become profit centers agencies have set up their media departments as free-standing units many large clients now look at media as a separate service

research department
interpret market environment
gather and analyze research data.

primary and secondary techniques

determine consumer needs/perceptions understand problems

advise how ads can meet

strategic goals
help find solutions

Research Report

research department
Research Director Project Managers Research Assistants Outside Research Suppliers

research director research project managers research assistants

outside research specialists

Research Report

auxiliary agency functions

account planning strategy/creative review board office management
human resources legal services accounting recruitment

3 ways agencies make money

commissions
usually 15% of gross costs

fees
usually based on negotiated hourly rate

incentives
still relatively new and problematic usually based on performance goals

agency commissions
media commission system
15% media commission

adjustable commission rates

negotiate to match client budget sliding scale

markups-production & service

add a percentage markup to costs 17.65% of net = 15% of gross

4 types of fee systems

fixed fee (retainer) cost-plus fee performance fee hybrid fee & commission

incentives
in theory, a good way to work get paid based on how well you do, not how much you bill in practice, difficult to implement if client makes final decision (instead of agency), how can agency be responsible for final results? results based on many factors, such as competitive efforts, not just advertising

new business
three primary sources The critical objectivebusiness build existing clients and role of any ad agency is gaining add and sell new IMC services solicitnew business. new accounts
two ongoing problems
spec work teams walking with accounts

things to think about:

why might you be interested in going into the agency business? what might keep you from choosing a career in the agency business?