The ISC Industries

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The ISC Industries
2
The Players

• Clients
• Agencies
• The Media
• Suppliers

3
Clients

• Centralized system managers for major marcom
  areas work on all brands
• Decentralized system product managers for each
  brand marcom support underneath
• In-house agencies

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Top client firms -- 2003

• General Motors 3,429.9
• Procter Gamble 3,322.7
• Time Warner 3,097.3
• Pfizer 2,838.5
• DaimlerChrysler 2,317.5

• Ford 2,233.8
• Walt Disney 2,129.3
• Johnson Johnson 1,995.7
• Sony 1,814.8
• Toyota 1,682.7
• Source AdAge 100 Leading National Advertisers
• in millions

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Agencies

• Why use an agency?
• Skills
• Objectivity
• Clout

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Types of Agencies

• Full-service (www.fallon.com)
• Creative boutiques (www.gshsf.com/)
• Media buying services (www.omd.com/OMDLobby/fl.asp
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Full-Service Agency Functions

• Account services
• Research
• Media
• Creative
• Management/Finance

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Top U.S. Ad Agencies

• J. Walter Thompson 456.2
• Leo Burnett 404.2
• McCann Erickson 300.4
• BBDO 279.1
• Grey 270.5
• DDB 252.3

• Ogilvy Mather 235.6
• Foote Cone Belding 221.6
• YR 215.7
• Publicis 200.9
• Source Ad Age, 2004
• in millions

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Direct Marketing Agencies

• Digitas 125,500
• PGI 110,000
• Aspen Marketing Services 99,000
• ChoicePoint Precision Marketing 96,600
• SourceLink 90,000

• TMP Worldwide 78,155
• Carlson Marketing Group 76,612
• Protocol Direct Marketing 70,000
• Merkle Direct Marketing 64,250
• Harte-Hanks Direct 60,931

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Top Sales Promotion Agencies

• Carlson Marketing Group 154,238
• George P. Johnson Co. 117,867
• SPAR Group 64,859
• AMP Agency 61,100
• Equity Marketing 40,203

• DVC Worldwide 38,113
• Flair Communications 36,800
• Ryan Partnership 35,537
• Marketing Store 35,416
• Aspen Marketing 25,000

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Top Interactive Agencies

• Digitas 84,000
• SBI.Razorfish 72,150
• Modem Media 49,000
• aQuantive 44,452
• AKQA 36,000

• Critical Mass 34,000
• TMP Worldwide 26,108
• Carat Interactive 25,000
• IconNicholson 24,000
• IMC2 23,700

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Top U.S. PR Firms

• Edelman Worldwide 136,207,958
• Ruder Finn Group 70,674,000
• Incepta 70,198,118
• Waggener Edstrom 58,445,000
• Schwartz Communications 19,541,445

• Campbell Co. 19,489,710
• Text 100 PR 18,934,514
• Chandler Chicco 16,195,179
• FD Morgen-Walke 14,730,542
• DeVries 14,556,634
• Source PRFirms.org

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Agency Compensation

• Commission system (15 on media placements)
• Fixed-fees
• Fee-commission combination
• Cost-plus
• Incentive-based
• Percentage mark-ups

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2004 ANA Study

• 10 use commission system
• 74 use hourly/fixed fees
• 8 use fee/commission combination
• 38 use performance incentives

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What do advertisers want from agencies?

• Responsiveness 95
• Outstanding service 95
• Effective campaigns 56
• Outstanding ideas implementation 40
• Strategic counsel insights 35
• Source 2004 ANA study

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What do advertisers see as biggest problems with
their agency(ies)?

• Disconnects from strategy to creative 24
• Work that isnt always on strategy 23
• High production costs 22
• Agencies taking too long/making too many reworks
  21
• Creative arrogance 15

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What do agencies want from clients?

• Respect/trust 57
• Fair payment 41
• Communications 39

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Reasons for Account Changes

• Unrealistic demands
• Personality conflicts
• Personnel changes
• Conflicts of interest

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Top 10 U.S. Media Companies

• Time Warner 29,247
• Comcast 17,492
• Viacom 17,252
• Disney 11,239
• NBC 8,177

• Cox 8,108
• DirecTV 7,696
• News Corp. 7,532
• Gannett 6,330
• Clear Channel 6,138
• Source Ad Age
• in millions

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Suppliers

• Printers
• Premium incentive firms
• Fulfillment companies

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Who runs the show?

• Generally, the client
• Their money
• Their brand
• Decreases infighting