ADVERTISING: Advertising Agencies

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ADVERTISINGAdvertising Agencies
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Industry Participants
Clients (Advertisers)
Ad Agency
Media

• Client services
• Creative services
• Media buying
• Finance
• Research

• Print
• Broadcast
• Out-of-Home
• Direct

• Advertising Department

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Advertising Salaries
TITLE AVERAGE SALARY
CEO 250,000
Creative director 150,000
Chief financial officer 100,000
Art director 50,000
Copywriter 40,000
Account executive 30,000
Media buyer 27,500
Assistant (starting) 25,000
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Types of Ad Agencies
Agencies provide 4 different services

• Account management
• Creative Services
• Media Buying Services
• Research Services

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Specialty Shops

• Creative Boutiques
• Media Buying
• Public Relations

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Personalities

• But even full service agencies have their own
  personalities and specialties.
• video on Fallon (McElligott)
• McCann-Erickson
• TBWA/Chiat Day

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Fallon
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Fallon
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Fallon
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Fallon
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Fallon
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McCann-Erickson

• OLD RELIABLE
• CLIENTS
• Exxon
• 90 years
• GM (Buick, Cadillac, Pontiac)
• 70 years
• Coca-Cola
• 60 years
• Nestles
• 60 years

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McCann-Erickson
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McCann-Erickson
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TBWA/Chiat Day

• A Hip agency
• Based in Venice Beach CA and NY
• Clients
• Absolut vodka
• Apple Computer
• Nissan
• Sony Playstation

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TBWA/Chiat Day
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TBWA/Chiat Day
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Compensation strategies

• 1. Commission -- 15 or less
• 8-10 on very large accounts
• 2. Fees
• fixed prices on some items,
• percentage on others
• 3. Cost-plus
• actual costs ! percentage
• 4. Incentive-based
• often performance sales based!

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Selecting an Ad Agency
Client Defines Needs
Long List
Questionnaire
Short List
Credentials Presentation
Decision
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Selecting an Ad Agency

• Activity

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10 Questions to Ask

1. What do we need from an agency?
2. Who should handle the media buying?
3. What compensation strategy do we want?
4. Do we want a specific kind of advertising
   campaign?
5. How important is regular access to the president?
   
6. Does the agency have success in direct marketing?
   
7. Do we want an agency to handle existing or
   new-products?
8. Does the location of the ad agency matter to us?
9. Who will be in charge of advertising decisions?
10. Do you love the agencys work and its results?

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Why Agencies Lose Clients

• 1. Poor performance (sales)
• 2. Quality of work or service
• 3. Philosophical differences
• 4. Unrealistic demands or expectations
• 5. Personality or personnel changes
• 6. Client or agency consolidation
• 7. Conflicts of interest
• 8. Just for the heck of it!

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FCB LAYS OFF 7 OF IRVINE, CALIF. STAFF Fate of
Entire El Segundo Office in Question
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Quote of the Day

• I have learned you cant have good advertising
  without a good client, that you cant keep a good
  client without good advertising, and no client
  will ever buy better advertising than he
  understands or has an appetite for.
• Leo Burnett