Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising...

chapter three

The Advertising Industry

Objectives_1

Describe the various groups in the advertising business and explain their relationship to one another

Discuss the differences between local and national advertisers

Explain how advertisers organize themselves to manage their advertising both here and abroad

Define the main types of advertising agencies

Objectives_2

Explain the range of tasks people perform in an ad agency and an in-house advertising department

Discuss how agencies get new clients and how they make money

Debate the pros and cons of an in-house advertising agency

Explain how suppliers and the media help advertisers and agencies

The Advertising Industry

Advertisers Advertising

agencies Suppliers Media

Types of Local Advertisers

Dealers or local franchises

Stores with branded merchandise

Specialty businesses

Government and non-profit

Exhibit 3-1 Departmental Structure for Small Advertisers

Types of Local Advertising

Product advertising

Institutional advertising

Classified advertising

Cooperative Advertising

Seeks to

build the manufacturer’s brand image

help distributors, dealers, or retailers make more sales

Differences between Local and National Advertisers

National Focus

– Brand– Market share– Strategies– Markets

Long-term time frame $5-10 million + Use of many specialists

Local Focus

– Location– Volume– Tactics– Customers

Short-term time frame < $1 million Use of few generalists

Exhibit 3-3 Top 10 Advertisers

Rank Company U.S. Ad Spending(in millions)

1 General Motors 3,997.4

2 Proctor & Gamble 3,919.7

3 Time Warner 3,283.1

4 Pfizer 2,957.3

5 SBC 2,686.8

6 DaimlerChrysler 2,462.1

7 Ford Motor Co. 2,458.0

8 Walt Disney Co. 2,241.5

9 Verizon 2,197.3

10 Johnson & Johnson 2,175.7

Large Company Structures

Exhibit 3-5

A Centralized Structure

Large Company Structures

Exhibit 3-6

A Decentralized Structure

Transnational Advertising

Will a Global Advertising Strategy Work?

Has each country’s market for the product developed in the same way?

Are the targets similar in different nations?

Do consumers share the same wants and needs?

The Advertising Agency

An independent organization of creative people and business people who specialize in

1)developing and preparing marketing and advertising plans, advertisements, and other

promotional tools, and

2)purchasing advertising space and time

in various media in order to find customers for their clients’ goods and services

Types of Agencies

Geographic Scope

Range of Services

Specialized Agencies

Geographic Scope

LocalLocal

RegionalRegional

NationalNational

InternationalInternational

Range of Services

Full-service

1) General consumer2) Business-to-business

Specialized

1) Creative boutiques2) Media-buying services

3) Interactive

What Agency People Do

Account Management

Research and Account Planning

Creative Concepts

Production Traffic Management Agency

Administration Additional Service

Exhibit 3-7 Agency Structure

Agency Compensation

Media commissions Markups Fees

– Fee-commission combination

– Straight-fee– Retainer– Incentive system

In-House Agency

Some companies like Benetton prefer

to create their ads using their own in-

house agency

ReferralsReferrals

PresentationsPresentations

NetworkingNetworking

Soliciting New BusinessSoliciting New Business

How Agencies Get Clients

Suppliers in Advertising

Art Studios Web Designers Printers Film/ Video Houses Research

Companies

ElectronicElectronic

PrintPrint

Digital InteractiveDigital Interactive

Out-of-HomeOut-of-Home

DirectDirect

OtherOther

Key Terms_1

Account executive Account planning Account supervisor Advertiser Advertising agency Art directors Art studios Brand manager Business-to-business

agency

Centralized department Classified advertising Cooperative advertising Copy Copywriter Creative boutique Creative director Decentralized system Departmental system

Key Terms_2

Fee-commission combination

Foreign media Full-service agency General consumer

agency Global marketer Group system Incentive system In-house agency

Institutional advertising Integrated marketing

communications Interactive agency International agency International media Local advertising Local agency Management supervisor Markup

Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising...

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Transcript of Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising...

Chapter fourteen Out-of-Home, Trade Shows, and Supplementary Media McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill.

chapter 5 Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Contemporary Advertising, 11e Marketing & Consumer.

Chapter 1 Advertising Today? William F. Arens Michael F. Weigold Christian Arens McGraw-Hill/IrwinCopyright © 2013 by The McGraw-Hill Companies, Inc. All.

chapter 02 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. The Economic, Social and Regulatory Aspects of Advertising.

Chapter one Advertising Today and How We Got Here McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies,

chapter 11 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Print Advertising.

Regulation of Advertising and Promotion 21 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin Copyright © 2012 McGraw-Hill Companies, Inc., All right reversed 3 Organizing for Advertising and Promotion: The Role of Ad Agencies.

McGraw-Hill © 2000 The McGraw-Hill Companies 1 S M McGraw-Hill © 2000 The McGraw-Hill Companies.

Chapter seven Developing Marketing and Advertising Plans McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies,

Chapter advertising, public relations, and sales promotions seventeen McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights.

chapter 18 Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Contemporary Advertising, 11e Using Out-of-Home,

Essentials of Marketing Chapter 15 Advertising, Publicity, and Sales Promotion McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All.

chapter 07 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Developing Marketing and Advertising Plans.

Chapter fifteen Media Planning and Buying McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All.

The Business of Advertising Chapter 03 McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

chapter Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Contemporary Advertising, 11e Economic, Social, and.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 19-6 TYPES OF ADVERTISEMENTS Advertising Product Advertisements Competitive (or Persuasive)

Chapter ten Producing Ads for Print, Electronic, and Digital Media McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill.

Chapter two The Economic, Social, and Regulatory Aspects of Advertising McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill.