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Chapter 5 Objectives
After reading this chapter you will understand
1. The agency
2. The history of the agency business
3. The full-service agency
4. Global advertising agencies
5. Agency and client relationships
6. Forms of agency compensation
7. Other advertising services
Chapter Overview
An advertising agency is an independent business composed of creative and business
people who develop, prepare, and place advertising in media for sellers seeking
to find customers for their goods and services.
The advertising agency is an American invention. The history of
the advertising agency is traced from Colonial Times to the present
in the chapter. The foundations, evolution, legal control, and organizational
designs are explored so the reader will understand the dynamic forces
that have caused and are causing change in the agency industry. Today’s
agencies are reengineering themselves to become more receptive to
client needs. Roles of personnel and structure are changing in many
agencies as they experiment with means of being more efficient and
responsive.
A variety of agency forms are examined in this chapter. Chief among
these forms is the full-service agency. Full-service agencies offer
all the services necessary to handle the total advertising function
for clients. In to day’s integrated agency this may include
promotion, public relations, direct response, and other services
in addition to traditional media advertising. The agency develops
a plan revolving around “what is the marketing problem?” The
plan would include a strategy, a creative response, a media plan,
and a method for billing the client and paying the media. Agencies
are usually organized into four divisions: account services, j marketing
services, creative services, and management and finance. There is
a trend toward I more of a team approach to developing and marketing
products. This may affect organizational design in the future. In
fact, reengineering of the modem-advertising agency has been underway
for several years.
The chapter concludes by discussing agency compensation methods,
ancillary agency services, and unique hybrid forms of agency
design that offer customized
and specialized services for clients. The agency of the future or creative
organizations will have to deal with marketing problems beyond advertising
tactics. It will have to have an understanding of international communications
and be organized to support clients throughout the world. Finally, compensation
will be more and more based on the success of the client and the profitability
of the goods and services promoted.
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