Report

Introduction

Any, paid form of non-personal presentation of ideas,

goods and services by an identified sponsor is an advertisement. It
is the most effective tool for communicating a message from the
marketer to a group of people. It communicates information about
the product and persuades or influences people to act in favour of
the message conveyed in advertisement; like buy a particular
product, vote for a candidate, donate money to a noble cause etc.
Some times advertisement may persuade individuals to act against;
like the ads highlighting the dangers of using narcotic drugs or
alcohol. It also reminds people about something which has to
be done.
Advertising involves several steps such as Setting
advertising objectives; deciding on the advertising budget;
choosing the advertisement message and media and measure
its effectiveness; evaluating advertisement effectiveness

Functions of Advertisement
The functions may vary depending on the advertiser and its
particular objectives.
It usually include one or more of the following

 To differentiate products from their competitors

 To communicate product information

 To urge product use

 To expand product distribution

 To increase brand preference and loyalty

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 To reduce overall sales cost

Participants in Modern Advertising

 Advertiser or Clients
An advertiser can be a manufacturer or a distributor or a
public sector company or any government department.
They are the sponsors of advertising. All major
advertisers maintain an advertising department. The
Advertising Manager, who is in charge of managerial
and operational functions, heads the department.

 Advertising agency
An Advertising agency or ad agency is a team of experts
appointed by clients to plan, produce and place
advertising campaigns in the media

 Media organizations
The medias can be Print, Broadcast, Outdoor, Transits,
Direct marketing, Cinema or Internet. They sell space or
time.

 Marketing communication specialist organizations,

which include

♦ Direct response agencies

Provide a variety of services, including
database management, direct mail
research, media service, and creative and
production capabilities.

♦ Sales promotion agencies

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Develop and manage sales promotion

programs such as contests, sweep stakes,
refunds and rebates, premium and incentive
offers and sampling programs.

♦ Public relations firms

Develop and implements programs to
manage the organization’s publicity, image,
and affairs with consumers and other
relevant publics, including employees,
suppliers, stockholders, government, trade
unions and general public.

♦ Interactive agencies
Specialized marketing communication
organization that specialize in the
development and strategic use of various
interactive marketing tools such as websites
for the Internet, banner ads, CD-ROMs etc.

 Collateral Services
They include marketing research companies, package
design firms, consultants, media buying services,
photographers, printers, video production houses and
event marketing services companies.

 Free-lancers
These are professionals who work independently and
have a successful track record. They are copywriters;
jingle singers, artists, visualizers, technical directors etc.

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ADVERTISING AGENCY

Major companies use an advertising agency to assist them in

developing, preparing and executing their promotional programs.
An ad agency is an organization that specializes in planning and
executing advertising programs for its clients. The use of an
advertising agency may be helpful because of its experience and
objectivity in advertising.

TYPES OF AGENCIES

An ad agency can range in size from a one or two persons

operation to large organization, the services offered and functions
performed will vary.

FULL SERVICE AGENCIES

The agency, which is capable of providing all the services

necessary to develop, creates and executes advertising for its
clients. It offers its clients a full range of marketing,
communications and promotions services, including planning,
creating and producing the advertisement, performing the
research and selecting the media.

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The organizing of a full service Advertising Agency by function is

shown as below:

Chief Executive Officer

Account
Creative Marketing Agency
Management
Services Services Management

* Client * Copy * Research * Human

Services * Art * Creative Services * Finance
* Production * Account
and
* Traffic planning Accounting
* Media

A variety of functional experts who are specialists in particular

skills become involved as the agency moves from understanding
the product and the market to planning, creating, executing, and
evaluating the advertisement. These Specialized functions include
account management, creative services, marketing services, and
agency management. Although these functional areas appear to

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be separate, they co-ordinate and integrate their efforts so that

they can most effectively serve each client.

Account Management

The account management function is the main link

between the agency and the client. Account Executive is
considered to be the Key executive of the agency. It is a
pivotal but a pressurized role because AE works for the agency
but on behalf of the client, so priorities sometimes conflict. The
AE represents client within the agency, marshalling agency
resources, keeping ad creation, production and placement on
schedule; and pushing for the agency’s best efforts. At the
same time, the AE is the voice of agency to a client,
representing agency’s viewpoint and working to get approval
for the agency’s work. In a large agency, an Account
Supervisor, who is supervised in turn by agency’s Director of
Account Management, supervises several account executives.

Creative Services

The second major function of an advertising agency is

Creative Services. The Creative Director supervises all the
activities within this function.
Under him there will be Copywriter or Copywriters- often
called the "idea persons," the copywriter prepares the copy-- the
message the advertiser wishes to present. In the final stages of the
copy, the copywriter works with various specialists, including the
art-and-layout director and the account executive.

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The Art Director supervises creation of the art, including

such visual elements as the designs, illustrations, Photos, and type
that appear in Print ads and commercials.

After Clients have approved the agency’s creative concepts,

the Production Department, supervised by creative director,
translate the ads and copy into finished ads. There can be Print
Production Managers or Broadcast Production Managers
based on the media to be selected.
Holding together the diverse duties of all the duties of all
these creative departments is the Traffic Department, which
works closely with each account executive to coordinate all aspects
of development and production. It is an important function because
agencies typically work on many ads simultaneously, and the
process of designing, producing and placing each ad involves many
steps. It is the job of traffic department to see that the agency
people meet their deadlines so that ads are completed and
submitted to the media on time.

Marketing Services

The people in marketing services figure out what audience the

advertising will target, what strategies that influence the advertising
to act, and which media will best reach the audience.
The Research Director, assisted by Market Research
Specialists, investigates the current and potential customers for a
product, looks at what motivates them to act and gives the creative
services people the background they need to create effective ads.
Research Specialists test the audience reaction to various versions
of a proposed ad, and once the ad has run, they measure the

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audience response. They conduct the Pre test and Post-test for
measuring ad effectiveness.
Account Planning is a research-based discipline that
represents the customers view point and feelings about the product
and the advertisement. They work with Creative Experts and
Media Specialists to apply this knowledge when creating
advertising aimed at appropriate audience.

The Media Director is responsible for finding the best media

at the best price that will most effectively reach the client’s target
audience. Under him, there is a Media planner, who decides which
media to use, when to use them and at what cost; the Media
buyer, who books the time or the space needed for a commercial or
an ad; and Media researcher, who supports media planning and
buying by analysing the number and type of people each medium
reaches.

Agency Management

The function of Agency Management involves running the

agency’s day-to-day activities. It covers a range of tasks; two of the
most important tasks deal with Human Resource and Finance.
As every HR department does, here also this department is
responsible for hiring, firing and training agency employees. They
coordinate employees’ salary, benefits and other details.
Financing and accounting task involve an enormous amount of
paper work. They check on financial transactions of an agency. In
addition they keep a close eye on agency income and expenses and
helps Top-level management track profitability.

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GROUP SYSTEM

Some agencies prefer to formalize the group system by using group

assignments as the basis for all or part of the agency’s official
structure. Such an agency defines its structure as a series of formal,
relatively self-contained groups. A functional expert in account
management, creative services, media and research is permanently
assigned to each group, which handles all advertising functions of
one major advertiser or perhaps several smaller advertisers.

LIMITED SERVICE AGENCIES

A limited service agency concentrates on selected

advertising services. Over the past few decades, several

alternatives to full service agencies have evolved, including

Creative Boutiques and Media buying services.

Creative Boutique
It is an advertising company that restricts its services to

developing innovative advertising concepts and messages. These

specialized companies have developed in response to some clients’

desires to use only the creative talent of an outside provider while

maintaining other functions like media planning, research etc.

internally.

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Media buying services

These types of agencies handle only media planning, buying,

and placement. Some media buying services do help advertisers

plan their media strategies. Media buying services can negotiate

price reductions and in turn can benefit advertisers.

CLIENT -AGENCY RELATIONSHIP

The relationship between an advertiser and agency is like one

plus one three: when the combination clicks, it can produce exciting,
creative, effective advertising that goes beyond merely getting the
job done. Generally there are four patterns of client agency relation
ship..

 Parent-Child relationship –Agency holds the hand of the client

and guides him at every stage.
 Equal Partnership relationship-Both the agency and the client
are fairly demanding of each other/They sort out their
problems jointly.
 Unequal Partnership relationship- The client feel no need to
understand the agency. It is really the agency, which is
expected to understand the client.
 Deliver-and –out relationship- The client orders when there is
a need. The client keeps relationship with several agencies.
The agency supplies the service and closes the deal

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Many successful Client agency relationships go on for a

number of years, long term relationships are becoming less
common. There are a number of reasons why advertisers
switch agencies and how an agency gets clients.

How Agency gets Clients----

An agency gets clients due to various reasons.

 Image and Reputation

 Presentations
 Public relations
 Solicitations
 Referrals
 Competence
 Expertise
 Compatibility
 Cost consciousness

Why Advertisers switch Agencies----

Some of the more common reasons agencies lose clients
follow:

 Poor performance or service

 Poor creative outputs.

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 Poor communication
 Unrealistic demand by the client
 Personality conflicts
 Personnel changes
 Changes in size of the client or agency
 Conflicts of interest
 Changes in the clients corporate and / marketing
strategy
 Declining sales
 Conflicting compensation methods
 Changes in policies

Conclusion
Advertising is an effective tool for marketing as long as it is used
wisely. The improper usage of an advertising campaign may cause
hazard to the society. The purpose of the advertisement is not to
manipulate people by exaggerating truth or concealing limitations.
An effective advertisement can attract the attention of people,
rouse their interest, build a desire in them and make them to act
towards a specific product or service. To be an effective one,
advertising should also be an ethical one. It is only possible with
combined efforts of the participants in advertising. Among these
participants, an Ad agency plays a crucial role. So it is essential for
every person in the advertising agency to carefully examine the
social aspects of advertising along with the creative and production
sides.

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_____________________________________________________________________

Reference:
Foundations of Advertising : Chunawalla S.A & Sethia.K.C
4th revised Edition 2003
Himalaya Publishing House,
New Delhi
Advertising excellence : Bovee, Thill, Dovel and Wood

International Edition 1995

McGraw Hill Inc, New York
http://www.mind-advertising.com/
http://www.adage.com

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