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

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chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.

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

Page 1: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

chapter three

The Advertising Industry

McGraw-Hill/IrwinEssentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.

Page 2: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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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

Page 3: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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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

Page 4: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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The Advertising Industry

Advertisers Advertising

agencies Suppliers Media

Page 5: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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Types of Local Advertisers

Dealers or local franchises

Stores with branded merchandise

Specialty businesses

Government and non-profit

Page 6: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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Exhibit 3-1 Departmental Structure for Small Advertisers

Page 7: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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Types of Local Advertising

Product advertising

Institutional advertising

Classified advertising

Page 8: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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Cooperative Advertising

Seeks to

build the manufacturer’s brand image

help distributors, dealers, or retailers make more sales

Page 9: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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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

Page 10: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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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

Page 11: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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Large Company Structures

Exhibit 3-5

A Centralized Structure

Page 12: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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Large Company Structures

Exhibit 3-6

A Decentralized Structure

Page 13: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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Transnational Advertising

Page 14: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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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?

Page 15: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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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

Page 16: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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Types of Agencies

Geographic Scope

Range of Services

Specialized Agencies

Page 17: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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Geographic Scope

LocalLocal

RegionalRegional

NationalNational

InternationalInternational

Page 18: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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Range of Services

Full-service

1) General consumer2) Business-to-business

Specialized

1) Creative boutiques2) Media-buying services

3) Interactive

Page 19: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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What Agency People Do

Account Management

Research and Account Planning

Creative Concepts

Production Traffic Management Agency

Administration Additional Service

Page 20: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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Exhibit 3-7 Agency Structure

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Agency Compensation

Media commissions Markups Fees

– Fee-commission combination

– Straight-fee– Retainer– Incentive system

Page 22: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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In-House Agency

Some companies like Benetton prefer

to create their ads using their own in-

house agency

Page 23: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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ReferralsReferrals

PresentationsPresentations

NetworkingNetworking

Soliciting New BusinessSoliciting New Business

How Agencies Get Clients

Page 24: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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Suppliers in Advertising

Art Studios Web Designers Printers Film/ Video Houses Research

Companies

Page 25: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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ElectronicElectronic

PrintPrint

Digital InteractiveDigital Interactive

Out-of-HomeOut-of-Home

DirectDirect

OtherOther

Media

Page 26: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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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

Page 27: Chapter three The Advertising Industry McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights.

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

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

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

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

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

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

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

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

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

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

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

Chapter eleven Print Advertising McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.

Chapter eleven Print Advertising McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.

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

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

Marketing, Advertising and IMC Planning Chapter 07 McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Marketing, Advertising and IMC Planning Chapter 07 McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

chapter 16 Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Contemporary Advertising, 11e Using Electronic Media:

chapter 16 Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Contemporary Advertising, 11e Using Electronic Media:

The Economic, Social, and Regulatory Aspects of Advertising Chapter 02 McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights.

The Economic, Social, and Regulatory Aspects of Advertising Chapter 02 McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights.

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

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

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

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

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

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

chapter 7 Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Contemporary Advertising, 11e Research: Gathering.

chapter 7 Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Contemporary Advertising, 11e Research: Gathering.

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

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

McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Advertising, Sales Promotion, Public Relations, Direct Marketing, Personal Selling,

McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Advertising, Sales Promotion, Public Relations, Direct Marketing, Personal Selling,

Chapter five Communication and Consumer Behavior McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc.

Chapter five Communication and Consumer Behavior McGraw-Hill/Irwin Essentials of Contemporary Advertising Copyright © 2007 The McGraw-Hill Companies, Inc.

Global Advertising Chapter 16 © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin.

Global Advertising Chapter 16 © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin.