Advertising Agencies (A&BM 03 Dec 2020)

Advertising Agencies

An advertiser either may have his own advertising department of may entrust the whole or part of the advertising work to a separate body of experts known as “advertising agency'. Thus, an advertising agency is an independent business organization specialized in advertising work which undertakes the work of planning and preparing advertising campaign for its clients. It is the body of experts who specialize in advertising. A modern advertising agency offers specialized knowledge, skills and experience which are required to produce an effective advertising campaign. It has a team of writers, artists, media experts, researchers etc. In this way, advertising agency is a professional body which undertakes the planning and preparation of advertising

“Advertising agencies are privately owned firms that specialize in performing the tasks of advertising.” According to Cundiff and Still, “An advertising agency is an independent business organization composed of creative and business people who develop, prepare and place advertising in an advertising media for sellers, seeking to find customers for goods and services”. According to American Advertising Agency Association (A.A.A.A.), “An advertising agency is

(i) an independent business organization,

(ii) composed of creative and business people,

(iii) who develop, prepare and place advertising in advertising media,

(iv) for sellers seeking to find customers for their goods and services.”

According to R. S. Dawar, “An advertising agency is a service organization which has come to be accepted as a professional body which undertaken the planning and preparation of advertising.” In the words of Rogen Barton, “Advertising agencies are organizations specialized in advertising."

 

“The work of a tailor is to collect the raw material, find matching threads, cut the cloth in desired shape, finally stitch the cloth and deliver it to the customer.”

Advertising Agency is just like a tailor. It creates the ads, plans how, when and where it should be delivered and hands it over to the client. Advertising agencies are mostly not dependent on any organizations.

These agencies take all the efforts for selling the product of the clients. They have a group of people expert in their particular fields, thus helping the companies or organizations to reach their target customer in an easy and simple way.

The first Advertising Agency was William Taylor in 1786 followed by James “Jem” White in 1800 in London and Reynell & Son in 1812.

 

Role of Advertising Agencies

1. Creating an advertise on the basis of information gathered about product

2. Doing research on the company and the product and reactions of the customers.

3. Planning for type of media to be used, when and where to be used, and for how much time to be used.

4. Taking the feedbacks from the clients as well as the customers and then deciding the further line of action

 

Why do they need advertising agencies?

All companies can do this work by themselves. They can make ads, print or advertise them on televisions or other media places; they can manage the accounts also. Then why do they need advertising agencies? The reasons behind hiring the advertising agencies by the companies are:

1. The agencies are expert in this field. They have a team of different people for different functions like copywriters, art directors, planners, etc.

2. The agencies make optimum use of these people, their experience and their knowledge.

3. They work with an objective and are very professionals.

4. Hiring them leads in saving the costs up to some extent.

 

Types of advertising agencies

There are mainly three types of agencies based on the type of services offered by them.

 

1. Full-Service Advertising Agencies:

These are the medium or large sized agencies capable of conducting complete advertising campaign. The main agency may be assisted by many subsidiaries engaged in various other related activities like market research, sales promotion, advertising, public relation, media buying, film production etc. Thus, these agencies are capable of handling all the various related activities of advertisement from beginning to end.

 

2. Specialized Advertising Agencies:

These are the agencies which provide only one or selected services out of the entire range services. Those agencies do not have specialization in all services or not supported by other specialized subsidiaries. The firms willing to get only a part of whole range of services may go in for specialized agencies. For instance, creative Boutiques and Media Buying Agencies.

These agencies get their charges in any form of – (i) Commission – A fixed rate of commission (ii) Fees – In addition to commission, it may insist for payment of fees, (iii) Percentage charges – agency charges some percentages of charges as mark up when agency buys some services from outsiders, (iv) Incentives based system – The fees here are based on how best the agency performs in achieving the pre-determined goals.

 

3. In-House Advertising Agencies

As good as the full-service agencies.

Big organization prefers these types of agencies which are in built and work only for them.

These agencies work as per the requirements of the organizations.

There are some specialized agencies which work for some special advertisements. These types of agencies need people of special knowledge in that field. For example, advertisements showing social messages, finance advertisements, medicine related ads, etc. AMUL.

 

Functions of an Advertising Agency

Advertising agency is an independent body which undertakes the work of planning and preparing advertising campaign for its clients. It is purely a business organization and thus provides a number of services to its clients. It produces idea for what will make good advertising. The main functions of a advertising agency are as follows:

(1) Selection of Clients: The first and the foremost function of an advertising agency is to contact and select clients who are desirous of advertising their products, services or anything which they want to sell. The preference in contacting and choosing the clients is given to those firms which have sound values, able management, efficient operative products and services. The financial position, size and nature of business, efficient management and operative products etc. must be given due weight.

(2) Media Selection: Media selection is another major function of the advertising agency. In making a media selection several factors such as cost, circulation, population which it serves, audiences, nature of the product, types of customers and above all needs of the clients should be kept in mind.

(3) Advertising Planning: The third as well as the major function of advertising agency is the advertising planning for its clients. For this purpose, the advertising agency requires a detailed knowledge of the firm's products, its advertising history, market conditions, channel of distribution, knowledge of competitors' products and their advertising techniques, field to be covered, nature and type of consumers etc.

Next planning job is to decide about the advertising medium in which the advertisement is to appear. The advertising message must be adapted to the medium in which it is to appear.

(4) Creative Function: The creative function starts when the planning function ends. It includes the preparation of an advertising copy, layout, illustration, photographs, advertising messages, theme of advertisement etc. These functions are performed by a varied group of creative people including writers, designers, artists, producers, photographers and graphic art specialists employed by the advertising agency.

(5) Research Function: It is the fifth major function of an advertising agency. It supports the decisions taken in the media and creative areas. In this connection the advertising agency gathers and analyses actual information about the product, extent of market, competitors' strategies and buyers' habits etc. That may help the creative personnel to make the advertising copy more attractive and effective

(6) Approval of the Client: As soon as the advertising copy etc. are prepared, the next function of the advertising agency is to show the copy to his client and obtain his approval. In case any changes are suggested by the client, the same may be incorporated and thus the final approval should be taken from the client.

(7) Marketing Function: The advertising agency also performs marketing functions such as selecting target consumers, designing products and packages, developing channels of distribution strategy, determining prices and rate of discount etc. It gives useful advice to its clients with regard to the nature and trend of the market conditions. Accordingly, the client produces goods keeping in his mind the prevailing conditions in the market.

(8) Evaluation Function: Simply drafting advertising copy and handing over the same to the media is not enough. The next major function of the advertising agency is to have an exhaustive evaluation of the advertising effects for the benefit of his client. In case of any deficiency, necessary suggestion should be given and the same be made effective after approval of the client.

(9) Coordination Function: The last but not the least important function of the advertising agency is to establish effective coordination with client's sales force and distribution network to ensure the long running success of the advertising campaign. Each time the advertising agency contacts the client regarding advertising media to be used and the number of times the advertisement is to be repeated after giving effect to changes, if any, as suggested by the advertiser.

 

Thus, in all, an advertising agency performs practically all the functions of an advertiser.