The Modern Advertising Agency
AAAA definition:
“An independent business, composed of creative and business people, who develop,
prepare, and place advertising in advertising media for sellers seeking to find customers for their goods or
services”
Advertising Agency Overview
There is no universal model for an advertising agency. An advertising agency can be one person
working out of a spare bedroom, or thousands in offices around the world.
There is a great deal of transition and change taking place among advertising agencies. What was
true yesterday may not be true tomorrow.
Some terms and job titles vary from agency to agency.
What does an advertising agency do?
Ad agencies are problem solvers. Their job is to identify a “pain point” and develop a message that
offers consumers and way to relieve the pain (solve the problem).
Ad agencies are really “communications specialists”
An agency should add value, not cost.
Value vs cost/price: all about ROI
Trend: Agencies now want to become more of a partner than a vendor.
Changes in marketing are causing changes in the role of agencies
Traditional "5 P’s of Marketing" were
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Product
-
Price
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Place
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Packaging
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Promotion
Todays "5 P’s"
1. Paradox: A proposition that seems self, contradictory.
Similar to"cognitive dissonance."
"Tastes Great, Less Filling"
http://www.youtube.com/watch?v=4yhE0KTtZnc
2. Perspective: concentrates on the consumer’s point of view.
3. Paradigm: price vs. value or "experience"
Cadillac "When you turn your car on, does it do the same for you?"
Kate Walsh Cadillac Commercial
T. Scott Gross: "...the same people who go to Sam’s Club to save a few pennies buying toilet
paper in bulk drive off the lot in a $100,000 Beamer.”
4. Persuasion
Customers buy "solutions."
5. Passion: advertising that is exciting, stimulating innovative and engaging.
Social media advertising is becoming much more prominent and important.
Advertising Agency Departments
Creative or Creative Services
Ad concept or theme, copywriting, artwork, graphics, video production etc. Creative is
responsible for producing the ad the consumer actually sees or hears.
A creative director is responsible for entire process from inception to finished ad
Account Services
Responsible for the relationship between the agency and the client.
An account supervisor oversees all accounts.
An account executive is responsible for specific accounts.
Marketing Services
Marketing Director/Manager/VP oversees media planning and buying, research, and sales
presentations.
Management & Finance
Accounting, administrative, human resource functions etc.
Agency Compensation
The goal is to make a profit of 20% or more.
The medium that gets the ad generally pays a 15 percent commission to the agency. This is an
industry standard.
Agency can charge the advertiser for other services like creative, research, copywriting, etc.
Agency may negotiate a performance fee for attaining certain pre-set goals.
Agencies today are trending toward cost justification and partnering.
Also see advertising
agency types and choosing an
advertising agency.
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