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Marketing
Communications
MarCom - Agencies
Xavier Delcourt
HiFive | TRAINING
© 2011 Pearson Education, Inc. Source: the truth about advertising – Duvall Guillaume
© 2011 www.HiFive.be/TRAINING
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An advertising agency or ad agency is
MarCom Agencies
• The best agencies create value:
a service business dedicated to
– By giving a product personality
– By communicating so as to
creating, planning and handling
shape a basic understanding of
the product
– By creating an image or
advertising (and sometimes other
memorable picture of the
product
– By setting the product apart
forms of promotion) for its clients. An
from its competitors
• Great advertising must do more
than inform, it must “tailor the
ad agency is independent from the
product story to a potential
customer” client and provides an outside point of
© 2011 Pearson Education, Inc.
© 2011 www.HiFive.be/TRAINING
Source: the truth about advertising – Duvall Guillaume
view to the effort of selling the client's
products or services. An agency can
also handle overall marketing and
branding strategies and sales
promotions for its clients.
Typical ad agency clients include
businesses and corporations, non-
profit organizations and government
agencies. Agencies may be hired to
produce television commercials and
radio commercials as part of an
advertising campaign.
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Ad agencies come in all sizes and
Why Hire an Agency?
• Use an independent agency to:
include everything from one or two-
– Get objective advice
– Get an experienced staff of experts
person shops (which rely mostly on
– Get the management skills necessary to
accomplish the communications campaign freelance talent to perform most
• Use an in-house agency to:
– Allow individuals to become technical
experts on products being advertised
functions), small to medium sized
– Receive priority for client and client’s needs
– Require minimum staffing
agencies such as Traction (agency),
large independents such as SMART
© 2011 Pearson Education, Inc.
© 2011 www.HiFive.be/TRAINING
and multi-national, multi-agency
conglomerates such as Omnicom
Group, WPP Group, Publicis,
Interpublic Group of Companies and
Havas.
Generalized advertising agencies
Creative agencies specialize in
"creative" or design-based business
models: their basic interest is in the
creation of the advertisement or
branding. Other ("full-service")
agencies offer design in conjunction
with media buying. Media agencies
concentrate on media buying. (In the
1990s, media and creative were often
unbundled in the interests of
economies of scale in buying media.)
The client who chooses to use a
design only based advertising agency
must assume some of the advertising
purchasing. These are activities that
are routinely handled by an agency
with a media buying option. Media
buying agencies are oftentimes a good
choice for larger businesses. These
agencies can assume greater
responsibility for the strategic
planning and function of an
advertising campaign. The advantage
to a design only-based agency is there
is no third-party ordering the service.
In turn, cost can be lower and is
oftentimes a good alternative for
smaller businesses.
Specialist advertising agencies
In addition to the full-service, general-
line advertising agencies, there are
also agencies that specialize in
particular kinds of advertising:
recruitment, help-wanted, medical,
classified, industrial, financial, direct-
response, retail, yellow pages,
theatrical/entertainment, investment,
travel, and so on.
Specialization occurs in such fields for
a variety of reasons. Often, as in
recruitment advertising, for example,
specialized media or media uses are
involved that require knowledge and
expertise not ordinarily found in a
general-line agency. In other cases,
such as medical or industrial
advertising, the subject is technical
and requires that writers and artists
have training in order to write
meaningful advertising messages
about it.
Such specialist advertising agencies
are also usually "full-service," in that
they offer all the basic advertising
agency services in their area of
specialization plus other, peripheral
advertising services related to their
area of specialization.
In-House advertising agencies
Some advertisers believe that they can
provide such advertising services to
themselves at a lower cost than would
be charged by an outside agency.
Interactive agencies
Interactive agencies may differentiate
themselves by offering a mix of web
design/development, search engine
marketing, internet
advertising/marketing, or e-
business/e-commerce consulting.
Interactive agencies rose to
prominence before the traditional
advertising agencies fully embraced
the Internet. Offering a wide range of
services, some of the interactive
agencies grew very rapidly, although
some have downsized just as rapidly
due to changing market conditions.
Today, the most successful interactive
agencies are defined as companies
that provide specialized advertising
and marketing services for the digital
space. The digital space is defined as
any multimedia-enabled electronic
channel that an advertiser's message
can be seen or heard from. The 'digital
space' translates to the Internet,
kiosks, CD-ROMs, DVDs, and lifestyle
devices (iPod, PSP, and mobile).
Interactive agencies function similarly
to advertising agencies, although they
focus solely on interactive advertising
services. They deliver services such as
strategy, creative, design, video,
development, programming (Flash and
otherwise), deployment,
management, and fulfillment
reporting. Often, interactive agencies
provide: digital lead generation, digital
brand development, interactive
marketing and communications
strategy, rich media campaigns,
interactive video brand experiences,
Web 2.0 website design and
development, e-learning Tools, email
marketing, SEO/SEM services, PPC
campaign management, content
management services, web
application development, and overall
data mining & ROI assessment.
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Types of Agencies
• Full-service agency
– Agency that includes account
management, creative services,
media planning and buying, and
account planning
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How Agencies are Organized
• Account management
– Liaison between the client and the agency
• Creative development and production
– Creative directors, creative department
managers, copywriters, art directors,
producers
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Media Buyers are individuals
How Agencies are Organized
responsible for purchasing time and
• Media buying and planning
– Recommends the most effective means of delivering advertising space for the purpose of
the message to the target audience
• Account planning and research advertising. When planning what to
– Gathers intelligence on markets and consumers
• Internal services buy, they must evaluate factors based
– Traffic, print production, human resource staff
on but not limited to station formats,
pricing rates, demographics,
© 2011 Pearson Education, Inc.
© 2011 www.HiFive.be/TRAINING
geographic, and psychographics
relating to the advertisers particular
product or service objectives. The
Media Buyer needs to optimize what
is bought and that is dependent on
budget, type of medium (radio,
internet, TV, print), quality of the
medium (target audience, time of day
for broadcast, etc.), and how much
time and space is wanted. Media
Buyers can purchase spot, regionally,
or nationally. National Media Buyers
might have to factor in determinates
based on a state by state basis. Rates,
demand of leads, space, and time, and
state licenses will vary from state to
state. National Media Buyers will need
National Media Planning to generate
National Media Marketing strategies
and National Media Advertising that
can be adaptable from area to area
but also work on a national level.
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The payment of commission as
Agency remuneration
• How agencies make money
remuneration for services rendered or
– Commission
• Amount charged to client as a
percentage of the media cost!!!
products sold is a common way to
– Retainer
• Amount of money to be paid so the reward sales people. Payments often
agency is available, or to start working
– Fee
on a project
will be calculated on the basis of a
• May vary by department or may be a
flat hourly rate. Charges are included
for out-of-pocket expenses and media
charges are billed to the client
percentage of the goods sold. This is a
– Commission on deliverables
• Print, events, … way for firms to solve the principal-
© 2011 Pearson Education, Inc.
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agent problem, by attempting to
realign employees' interests with
those of the firm.
Although many types of commission
schedules exist, a common form is
known as On Target Earnings, where
commission rates are based on the
achievement of specific targets that
have been agreed upon between
management and the salesperson.
Commissions are intended to create a
strong incentive for employees to
invest maximum effort into their work.
Note that often a firm embracing a
commission structure may not involve
employees, but may solely establish
themselves using independent
contractors. An example of this could
be a real estate agent.
Offering compensation in the form of
commission alone is known as straight
commission. Compensation may also
take the form of commission plus a
fixed salary. Industries where
commission is commonly paid include
car sales, property sales, insurance
broking and many other sales jobs.
A side effect of commissions is that in
some cases, they can result to
salespeople resorting to dishonest and
fraudulent business practices in order
to increase their sales.[1]
A retainer agreement is a work for
hire contract. It falls between a one-
time contract and full-time
employment. Its distinguishing feature
is that the employer pays in advance
for work to be specified later.
Additional contracts regarding the
performance of this work may also
apply.
It is common for a person seeking the
services of a lawyer (attorney) to pay a
retainer ("retainer fee") to the lawyer,
to see a case through to its conclusion.
In addition to the retainer fee, an
agreement between a client and an
attorney may provide for a
"contingent fee". Retainer fee can be
paid on a fixed, pre-negotiated rate or
on a variable hourly rate depending on
the nature of retainer and also, the
practice of the lawyer/advocate being
retained. Both models exist in the
industry. The purpose of a retainer fee
is to insure payment for future
services or work to be rendered.
Absent an agreement to the contrary,
a retainer fee is refundable if the work
is not performed.
A fee is the price one pays as
remuneration for services. Fees
usually allow for overhead, wages,
costs, and markup.
Traditionally, professionals in Great
Britain received a fee in
contradistinction to a payment, salary,
or wage, and would often use guineas
rather than pounds as units of
account. Under the feudal system, a
Knight's fee was what was given to a
knight for his service, usually the
usage of land.