Saturday, 6 October 2012

Organizing for Advertising and Promotion: The Role of Ad Agencies and Other marketing Communication Organizations

An advertising management program is the process of preparing and integrating a company's advertising efforts with the overall IMC message.
An effective program consists of four activities that combine to form the advertising management process:
  1. Review the company's activities in the light of advertising management
  2. Select an in-house or external advertising agency
  3. Develop an advertising campaign management strategy
  4. Complete a creative brief
The major effort guiding these four principles is consistency.

Advertising and the IMC Process

Advertising is a major component of integrated marketing communications. It is also the part of the "traditional" promotions mix of advertising, consumer and trade promotions, and personal selling. The role advertising plays varies by company, product and the firm's marketing goals. 
In both business-to-business and consumer promotions, the key to using advertising effectively is to see advertising as one of the "spokes" in the "wheel" of the promotional effort.

Choosing an Advertising Agency

In-house advertising group vs an external advertising agency
Advantages of In-house department :
  • Internal organization members have a better understanding of the company's mission and message
  • Managers of these firms believe they can develop effective advertising programs through outsourcing some of the functions and by hiring a few key advertising and marketing experts
Disadvantages of In-house department:
  • The company can go "stale" and fail to identify other promotional or advertising opportunities
  • An internal department may also lack expertise to carry out all of the necessary functions
  • In the global arena, internal members of the firm may lack the necessary understanding of language, customs, and buyer behaviors in international target markets
Variables examined when deciding on an external advertising agency or in-house department:
  1. Size of the account
  2. Amount of the money that can be spent on the media buys
  3. Objectivity
  4. Complexity of the product
  5. Creativity
External Advertising Agencies:
All types and sizes of advertising agencies exist. At one end of the spectrum are the highly specialized boutique-type agencies offering only one specialized service.
At the other end of the spectrum are the full-service agencies that provide all types of advertising and promotion activities. 

In addition to advertising agencies, there are other closely associated types of firm. They are:
  • Media service companies
  • Direct-marketing agencies
  • Companies focusing on consumer promotions, trade promotions, or both
  • Public relations firms

Choosing an external advertising agency 

Steps in selecting an advertising agency

List of awards as a means for judging an agency's creativity
Evaluation criteria in choosing an advertising agency:
  • Size of the agency
  • Relevant experience of the agency
  • Conflicts of interest
  • Creative reputation and capabilities
  • Production capabilities
  • Media purchasing capabilities
  • Other services available
  • Client retention rates
  • Personal chemistry                

Pitching Do's and Don'ts
Whenever possible, a client company's leaders should visit the advertising agency's office as part of the evaluation process. Agencies often use company executives, such as presidents or vice-presidents, termed heavy hitters by industry insiders, to win contracts, but then turn the account over to other individuals in the agency after signing the deal.              

 Advertising Planning and Research                                                                                                                    

Research steps

Advertising Campaign Management

  1.       Review the communication market analysis – For the purpose of advertising , two important items are outlined as part of the communication market analysis:
a.       The media usage habits in the target market
b.      The media used by the competition
     2.  Establish advertising objectives consistent with the communication objectives developed in the promotion opportunity analysis program –  Some of the advertising goals can be –
a.       To build brand image
b.      To inform
c.       To support other marketing efforts
d.      To encourage action
         3.        Review the advertising budget – Three basic tactics used for usage of funds are:
a.       Pulsating schedule – It involves continuous advertising with bursts of higher intensity (more ads in more media) during the course of the year, most notably during peak seasons.
b.      Flighting schedule – Ads are presented only during peak seasons, and not at all during off seasons.
c.       Continuous schedule – Advertising in level amounts, particularly when a product purchase is a “random event”.
        4.       Select the media in conjunction with the advertising agency
        5.       Prepare a creative brief – The basic components of a creative brief are –
a.       The objective
b.      The target audience
c.       The message theme
d.      The support
            e.      The constraints

   Agency Compensation 


The following methods of compensation can be used :
  1. Commissions from Media  
  2. Fee agreement - Fixed -fee method or fee-commission combination
  3. Cost Plus Agreement
  4. Incentive-Based Compensation
  5. Percentage Charges                                                               



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