The Role of Advertising Agencies in Modern Markets , By MIE

novelty aboundMessage strategies and decisions most often are the joint enterprise of the companies that advertise (the clients) and their advertising agencies. To appreciate why a company would use an ad agency, it is important to recognize that businesses routinely employ outside specialists: lawyers, financial advisors, management consultants, tax specialists, and so on. By their very nature, these  outsiders bring knowledge, expertise, and efficiencies that companies do not possess within their own ranks. Advertising agencies can provide great value to their clients by developing highly effective and profitable advertising campaigns. The relationship between ad agency and client sometimes lasts for decades.

In general, advertisers have three alternative ways to perform the advertising function: use an in-house advertising operation, purchase advertising services on an as-needed basis from specialized agencies, or select a full-service advertising agency. First, a company can choose not to use an advertising agency but rather maintain its own in-house advertising operation. This necessitates employing an advertising staff and absorbing the overhead required to maintain the staffs operations. Such an arrangement is unjustifiable unless a company does a large amount of continual advertising. Even under these conditions, most businesses instead choose to use the services of advertising agencies.

A second way for a client to accomplish the advertising function is to purchase advertising services  la carte. That is, rather than depending on a single full-service agency to perform all advertising and related functions, an advertiser may recruit the services of a variety of firms with particular specialties in distinct aspects of advertising, including creative work, media selection, advertising research, and so on. This arrangements advantages include the ability to contract for services only when they are needed, thus yielding potential cost inefficiencies. On the downside, specialists (so-called boutiques) sometimes lack financial stability and may be poor in terms of cost accountability.

 

Third, full-service advertising agencies perform at least four basic functions for the clients they represent: (1) creative services, (2) media services, (3) research services, and (4) account management. They also may be involved in the advertisers total marketing process and, for a fee, perform other functions, including sales promotion, publicity, package design, strategic marketing planning, and sales forecasting.

 

Creative Services

Advertising agencies have staffs of copywriters, graphic artists, and creative directors who create advertising copy and visualizations. Advertising agencies on occasion create brilliant advertising campaigns that enhance brand equity and increase a brands sales volume, market share, and profitability. Often, however, advertisements are not sufficiently clever or novel to break through the clutter of surrounding advertising.

 

Media Services

This unit of an advertising agency is charged with selecting the best advertising media for reaching the clients target market, achieving ad objectives, and meeting the budget. Media planners are responsible for developing overall media strategy (where to advertise, how often, when, etc.), and media buyers then procure specific vehicles within particular media that media planners have selected and clients have approved. The complexity of media buying requires the use of sophisticated analysis and continual research of changing media costs and availability. Experts in media and vehicle selection are able to make more effective decisions than are brand managers on the client side who have no particular expertise in media and vehicle selection.

 

Role of Creativity in Advertising

Research Services

Full-service advertising agencies employ research specialists who study their clients customers buying habits, purchase preferences, and responsiveness to advertising concepts and finished ads. Focus groups, mall intercepts, ethnographic studies by trained anthropologists, and acquisition of syndicated research data are just some of the services agencies research specialists perform.

 

Account Management

This facet of a full-service advertising agency provides the mechanism to link the agency with the client. Account managers act as liaisons so that the client does not need to interact directly with several different service departments and specialists. In most major advertising agencies, the account management department includes account executives and management supervisors. Account executives are involved in tactical decision making and frequent contact with brand managers and other client personnel. Account executives are responsible for seeing that the clients interests, concerns, and preferences have a voice in the advertising agency and that the work is being accomplished on schedule. Account executives report to management supervisors, who are more involved in actually getting new business for the agency and working with clients at a more strategic level. Account executives are groomed for positions as management supervisors.

By MIE

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