Advertising: Advertising agency and its fundamentals The Ad world - fundamentals & functions of advertising agencies. Advertising is a form of communication used to persuade an audience (viewers, readers or listeners) to take some action with respect to products, ideas, or services. Advertising messages are usually paid for by sponsors and viewed via various traditional media; including mass media such as newspaper, magazines, television commercial, radio advertisement, outdoor Today, advertising or direct mail; or new media such as websites and text messages. advertising is considered as the promotion tool of marketing mix. The word advertising has its origin from a Latin word 'Advertise' which means 'turns on'. The dictionary meaning of the word is 'to announce publicly' or to give 'public notice'. John E Kennedy- Advertising is any paid form of non-personal presentation and promotion of ideas, goods or services by an identifiable sponsor. CHARACTERISTICS OF ADVERTISING To understand what makes advertising different from other forms of communication, the following are the distinguishing features: Paid form: It is a tool of promotion which is paid for by the advertiser. There are standard tariff rates for the different types of media where the advertiser chooses to place an advertisement. Money is paid for per second in radio and TV or per column centimeter (cc) in print media by advertiser. Non personal presentation: Advertising is addressed to mass audience. Unlike the salesmen who communicate personally, an advertiser communicates non-personally. It is neither delivered by any person nor is it addressed to any specific person. There is a facilitating agency, ie, media which reaches to the target audience in large numbers. Promotion: The aim of advertising is to persuade people to buy products and services or to accept ideas which are being advertised. The task of promoting these products and services is done through communicating to the target audience by using the right media vehicle.
Identifiable sponsor: The sponsor is the person or group which is paying for the advertisement. In case of an advertisement, it can be easily identified as to what is the source of advertising message. Creative: An advertisement should be creative. Without it, the reader or viewer may not notice the message. Advertisements should be used to present the ideas in an imaginative and dramatic way, showing how a product or service fulfills a consumer's needs. Investment: Some people believe that advertising is a wasteful expenditure having a short term effect. However, it is proven that the advertisements are an investment towards the building of goodwill and brand image in the market. It should be sustained over a period of time or else the message will be forgotten. FUNCTIONS OF ADVERTISING Advertisements aim at fulfilling a variety of different purposes. It depends upon the needs of the advertiser for a particular product. The aim of advertising is guided by demand potentialities, cost of media etc. It facilitates the stimulation, maintenance and securing of distribution and consumption of product resulting in an increase in sale and profit of the advertiser. Advertising can be broadly classified as under: Primary functions
To increase sales volume
To encourage salesman
To persuade and assist channel intermediaries
To furnish information
To increase usage of products
To generate confidence in the present employees
To create brand awareness
To attract potential employees
To build confidence in the brand
To instill confidence in the minds of various publics---customers,
employees, channel intermediaries, suppliers, media etc To eliminate seasonal fluctuations. To raise the standard of living. To build positive attitude towards a product category.
However, the functions of advertising have moved far beyond primary and secondary functions.
CLASSIFICATION OF ADVERTISEMENTS Advertisements can be broadly classified into the following board categories ON THE BASIS OF GEOGRAPHICAL SPREAD ON THE BASIS OF TARGET AUDIENCE Global advertising Local advertising National advertising Regional advertising BY TYPE OF PURPOSE Product or non product advertising Primary demand or selective demand Commercial or non commercial advertising Direct or indirect action
Trade advertising Industries advertising Consumers advertising Professional advertising Institutional advertising ADVERTISING Print (Newspapers/Magazines) Electronic (Television/Radio) Outdoor (Hoardings/posters/billboards) Digital (Internet, SMS, Social Media
MEANING OF AN ADVERTISING AGENCY An advertising agency is a team of experts appointed by clients to plan, produce and place advertising campaigns in the media. In other words, an ad agency is an organization which specializes in providing services such as; a) Production and campaign planning to clients. b) Media selection c) Creative work. The Indian advertising agencies have grown quantitatively and qualitatively. For example, in 1939, there were only 14 advertising agencies on the official records of the Indian newspaper society and now there are more than 400 agencies working for the benefits of manufacturers and advertisers. In terms of Quality, the Indian advertising agencies exhibit a touch of professionalism, sophisticated Skills in production and research. Lately, majority of the agencies have diversified into allied areas like marketing research, media planning, field survey, and test marketing and so on. Some of the agencies like Lintas, IIT A provide highly professional services like product positioning, brand image survey and so on.
To be on par with international standards, major advertising agencies have entered into collaboration agreements with international advertising agencies. International agencies like Leo Burnett, Saatchi and Saatchi, Ogilvy and Mather, Grey advertising etc have already entered into joint-ventures with Indian advertising agencies. TOP ADVERTISING AGENCIES IN INDIA Ogilvy and Mather
Law & Kenneth
FCB Ulka Advertising
Rediffusion DY & R
J Walter Thompson (India)
R K SWAMY BBDO
FUNCTIONS OF AN ADVERTISING AGENCY Ø To understand the product to be advertised in and out. Ø To understand the technology used to produce it and the market for which it is
meant. Ø To understand the methods of distribution and selling. Ø To prepare an advertising plan with respect to budget, campaign and media Ø Ø Ø Ø Ø Ø Ø Ø Ø
selection. To plan and execute advertising campaigns. To create the ads for print, television and outdoors with the assistance of creative and production team. To choose the necessary description or brands, design the package or labels on the package. To buy either space or time in media. When the ads are run, they check whether they are run as per the schedule. They bill the client for services and media charges. Ad agencies and advertisers work in a mutually beneficial partnership. They are required to interface with the marketing and sales department of the client organization. To conduct market research on behalf of the business enterprises.
TYPES OF ADVERTISING AGENCIES Creative Agencies: Creative agencies work with client marketing departments to develop creative content. This creative idea is developed to fit all the desired channels of communication before, finally, becoming a living and breathing television commercial, poster, press ad or radio spot. Finally the creative agency is also responsible for quantifying the effectiveness of the campaign i.e. how it has performed in-market. Media Agencies: Media agencies are responsible for the planning and buying of media for clients. Media planning is about helping the client to decide how, when and where to spend their marketing communications budgets to achieve their business objectives. In addition to the more traditional media, media planners are increasingly advising clients on other communication channels including sponsorship, digital media, events, experience marketing and advertiser funded content. About 80 percent of the advertising budget goes on media. They research the target consumer; their media habits, their beliefs and their time spent reading signs. They choose between programmes, magazines, newspapers, poster sites and more, to deliver the best message, to the right people, at the right time. Once the media strategy and plan has been agreed, the media buyers will then set about negotiating the best price, quality and added value for the media space. Digital/online agencies: Most digital agencies work in the same way as offline agencies. These agencies work mainly on building websites. They specialize in digital communication like banners, viral emails, games, Interactive TV, mobile and email marketing. They also perform Search Engine Marketing, both by placing ads on the Search Engines themselves (Pay per Click Marketing) and by optimizing the clients' web site in order to get a top listing on the search engine. Search Agencies: Search agencies seek to promote the presence and visibility of client's websites online using methods such as search engine optimization (or SEO), paid placement, and paid inclusion. Integrated Agencies: Integrated agencies offer a range of services to clients by bringing together specialists from a variety of disciplines. Integrated agencies set out to
deliver media-neutral, 'joined up' advice to clients on how best to spend their marketing budget in line with their business objectives. Typically, an integrated agency will have specialists in-house across a variety of disciplines e.g. planning, advertising, digital, design and branding, direct marketing, sales promotion and even PR. Clients may choose to use one or any combination of these services. Direct Marketing Agencies: A direct marketing agency typically provides strategic and creative solutions to a client's business objectives. They use 'direct' marketing channels that are measurable in terms of the responses that they drive and the return on marketing investment that they deliver. Direct channels include the likes of direct response TV and radio, direct mail, inserts door-drops and online advertising. Branded Content Agencies: Branded content agencies don't produce advertising in the 'traditional' sense. Rather, they aim to incorporate their client's brands into popular culture e.g. via creating for the brand a TV show people want to see or an event they want to go to. The idea is to make brands synonymous with an enjoyable experience, thereby making them better known and loved in consumers' minds. Brand Experience Agencies: Brand Experience agencies are active in the field of 'experiential marketing' i.e. the staging of events on behalf of clients' brands that people choose to attend and participate in, which aim to connect consumers with brands in personally relevant and memorable ways. Experiential marketing events are intended to spark interaction between the brand and the consumer and thereby bring the two closer together. Outdoor Agencies: Outdoor agencies are specialists in 'out-of-home' media, such as posters in all their various forms. They provide objective planning, buying and related technical support for advertisers and their agencies to promote better understanding and more effective use of OOH media. STRUCTURE AND WORKING OF AN ADVERTISING AGENCY The structure of ad agency depends upon the size and functions. The following structure highlights the structure of a full service advertising agency along with its functions.
Account Executive/Client servicing Meaning: An Account Executive (AE) is key to maintaining the relationship between the agency and the client. AEs are the liaison between the client and the creative team to ensure the client's needs and goals are being met on every project. The AE also manages pitches to the client, the client's ad budget and generally handles around four non-competing client accounts at a time. Special Skills: Ø Ø Ø Ø Ø Ø Ø
Ability to communicate clearly both verbally and in writing Must be well-organized Excellent people skills and the ability to work with a wide range of people Professional appearance and persona Working long hours, especially under tight deadlines Travel to the client may be required Must be able to handle pressure well CREATIVE DIRECTOR
Meaning: A Creative Director (CD) oversees the creative team to help develop the agency's creative product for clients. This team includes copywriters and graphic designers.
Copywriters are wordsmith of an ad agency. They do the wording of an advertisement as well as contribute to the theme of an advertisement. The CD also works with Account executives to make sure the client's needs are being met and the creative goals are on track. CDs also develop every aspect of an ad campaign based on the client's marketing plan, conceptualize those ideas for clients, assign projects to staff and verify the client's deadlines are being met. A CD generally gets the glory when a campaign is a success and takes the blame when it's a failure. Special Skills: Ø Ø Ø Ø Ø
Ability to lead a team of creative's and have a solid background in copywriting and/or design Must be willing to work long hours and travel for the field work. Experience with Photoshop, Illustrator, InDesign, Flash, QuarkXpress, PowerPoint and other programs usually required to apply Must be able to manage the creative team from concept to completion of the projects with strong leadership Knowledge of each step of an ad campaign's process to give creative's direction, work on schedule and meet client's advertising expectations MEDIA DIRECTOR
Meaning: Media Directors oversee the media department and are responsible for managing the client's media buying and planning needs. A Media Director also places ads in print outlets like magazines and newspapers as well as on TV and radio. Ad placement is carefully calculated through research and analytical models to determine what is best for the client based on the product/service, the client's goals and budget. Special Skills: Ø Ø Ø Ø
Excellent communication skills and a professional approach. Ability to work with a wide range of people, including clients, sales people and your own staff Must be able to analyze research data to determine best placement for the client's needs Working long hours, especially under tight deadlines and handle pressures.
OTHER DEPARTMENTS TRAFFIC DEPARTMENT: This department co-ordinates between creative and production people. SUPPORT TEAM: The support team assists the ad agency in terms of sales promotion and marketing research. ADMINISTRATIVE TEAM: This team is concerned with the day today running of the ad agency. It has to manage the assets of the agency. It looks after all the personnel as well as financial aspects of the company. BASIC TERMINOLOGY IN ADVERTISING ACCOUNT A term commonly used within the advertising business to refer to the corporate entity employing an advertising agency. ACCOUNT EXECUTIVE (A/E) The agency employee responsible for a client's marketing and administrative efforts. AGENCY A company in the business of creating advertisements, packaging and names for products and services, as well as providing marketing and merchandizing advice and general business and promotional counsel to its clients. AGE GROUP A target audience defined by age. ART DIRECTOR The person responsible for the graphic design and creative positioning of an advertisement or campaign; the person in charge of an agency's production department BILLINGS The agency's annual gross dollar volume generated from one or several accounts. BILLBOARD A large outdoor printed sign. Costs for a specific billboard are determined by the amount of traffic that passes its location, plus the board's size and visibility. BROCHURE A folded leaflet with an advertising or promotional message. CATALOG An illustrated booklet listing products or services available. CLIENT An organization that employs an advertising agency to create advertisements CAMPAIGN The total planned, coordinated sales effort on behalf of a specific client or product. often multimedia in nature and run over a period of time.
CLASSIFIED AD A brief listing appearing in a periodical of items for sale and/or services offered, usually arranged by category. COMMERCIAL An audio or video advertising announcement, usually presented on television, radio or in a movie theater. COPY The written part of an advertisement. Effective copy is critically important, even in visually-oriented advertising messages. CONSUMER A private individual at whom advertisements are aimed; a buyer. CONSUMER MARKET A defined group of consumers. COPYWRITER A person responsible for writing advertising copy and generating creative concepts, often in collaboration with an art director or creative director. CORPORATE IDENTITY A company's name, logo, typeface, colors, slogan, etc., are elements that help comprise its corporate identity. CREATIVE TEAM The art director, copywriter, and artist, working together to develop an advertisement or campaign. DIRECT MAIL A marketing effort conducted exclusively by mail. DISPLAY AD An illustrated advertisement in a newspaper or magazine. FLYER A handbill or loose sheet with a printed advertisement. FOCUS GROUP A group of potential consumers used in a market research effort, which is usually designed to determine the likely effectiveness of a product or advertising strategy.
GRAPHIC DESIGN Any form of visual artistic representation. GRAPHIC DESIGNER The person responsible for producing artistic representations, usually under the guidance of an art director or creative director. HANDBILL A small, printed advertising sheet or flyer distributed by hand. IMPACT The degree of success of a campaign; the reaching of consumers. INDEPENDENT An agency which functions alone, not controlled or influenced by a larger corporation. JINGLE A catchy musical refrain delivering an advertising message, frequently used on radio or television.
LOGOTYPE The stylized lettering often employed in a logo. MARKET The prospective customers for a given product or service. MEDIA - Forms of mass communication. Newspapers, magazines, direct mail, billboards, bus signs, radio, television and internet are some important media that carry advertising. MARKET PROFILE The characteristics of a group or area targeted for a campaign. MEDIA PLANNER An employee of an advertiser or agency who coordinates media aspects of a campaign and selects the most effective media to use. Important factors in media planning include: the campaign; the budget, size and character of the market profile; and the positioning opportunities in the media. MEDIA RESEARCH A study of radio, television and print media for the purpose of reaching the optimal consumer audience. MESSAGE The underlying theme or idea in advertisement. PITCH The presentation of an advertising message to a prospective or existing client. POSTER A graphic advertisement attached to a flat surface or standing up with a clip backing. PRESENTATION A pitch or a description of a proposed advertising campaign. Example: Take a brand like Cadbury's; won't you say you love Cadbury's? Won't you feel close to this brand something that you are possessive about, something that you can identify with and feel comfortable with? And how! Imagine a situation where Cadbury would not have been advertised! Would you feel the same connection that you feel right now? No! Somewhere lines like 'kuch khass hai zindagi mein', 'Asli swaad zindagi ka', 'khaanewalon ko khaane ka bahana chahiye', 'rishton ki mithaas' etc have etched in our minds. We feel nostalgic when we recollect the girl dancing on the cricket field in the Cadbury ad, our mouth waters when we recollect the swirling melting chocolate shown just before the Cadbury pack shotâ€Ś hus advertising is that magical elixir of romance that creates the sparks between the brand and the consumer. Since ages, advertising is used as a medium of communication. However, today this medium is not just that. It is a means to feel emotions, indulge with the brands, create rippling effects on the consumer and above all make them feel warm, special and important. Advertising is truly a romantic indulgence!