An advertising agency is a company that helps advertisers create advertisements and place them with appropriate media. An agency is purely a service business, manufacturing nothing. Its “products” are ideas for what will make good advertising, its assets are creativity and expertise.
Advertising agencies have specialized in the service of creating and preparing advertising. The term agency implies both creative and advertising production personal (e.g. artists, TV producers print production manager, etc.) who do this kind of work for client, firms, and can spread their cost among all the clients.
Learn about: 1. Introduction to Advertising Agency 2. Meaning of Advertising Agency 3. Definitions 4. What does an Advertising Agency do? 5. Functions 6. Principal Areas 7. Selection 8. Types 9. Agency Evaluation.
10. Compensation 11. Agency Organization 12. Advantages and Disadvantages 13. Client-Agency Relationship 14. Role 15. Services Performed by Advertising Agencies for their Clients 16. Trends.
Advertising Agency: Meaning, Definitions, Functions, Principal Areas, Selection, Types, Role, Services and Other Details
- Introduction to Advertising Agency
- Meaning of Advertising Agency
- Definitions of Advertising Agency
- What does an Advertising Agency do?
- Functions of Advertising Agency
- Principal Areas of Advertising Agency
- Selection of Advertising Agency
- Types of Advertising Agencies
- Agency Evaluation
- Compensation to Advertising Agencies
- Agency Organization
- Advantages and Disadvantages
- Client-Agency Relationship
- Role of Advertising Agency
- Services Performed by Advertising Agencies for their Clients
- Trends of Advertising Agencies in India
Advertising Agency – Introduction
An advertising agency is a company that helps advertisers create advertisements and place them with appropriate media. An agency is purely a service business, manufacturing nothing. Its “products” are ideas for what will make good advertising, its assets are creativity and expertise.
Aside from its office furniture, an ad agency owns practically nothing tangible. In this business, your inventory goes down the elevator at 5 o’clock for marketing managers, advertising agencies are an important, sometimes an indispensable, aid in devising and implementing advertising strategy.
In no other corporate functional area is the use of outside help as prevalent as in advertising. The national consumer goods manufacturers depend heavily on advertising agencies during the advertising decision process, perhaps because of the acknowledged difficulty of developing advertising that will communicate with target audiences rather than being ignored.
Advertising agencies have specialized in the service of creating and preparing advertising. The term agency implies both creative and advertising production personal (e.g. artists, TV producers print production manager, etc.) who do this kind of work for client, firms, and can spread their cost among all the clients. Clearly, individual advertisers cannot justify the very high costs of having such a wide range of talent on their pay-rolls.
Apart from creative task, advertising agencies provide a variety of other services. One of the more important is media planning. Agencies employ media specialists to help clients in determining media mixes and schedules.
Much of the significant advancement in the development of models for media planning has been the result of work of, and financial support by, agencies. Moreover, media specialists perform the more routine task of obtaining space in all media categories print, TV, the radio, billboards, etc.).
Additional services may include helping clients make decisions on- product pricing, package design, distribution, marketing research, presentation of advertising strategy to client personnel, and performance of public relations tasks.
Advertising agencies may be characterized as either full service firms or boutiques. Full-service agencies are capable of performing all the above services for clients. These are the larger agencies employing personnel with a wide range of talent.
More recently, a number of agencies, usually smaller firms, have appeared on the scene which specialize in one or a few advertising functions. These are the boutiques- for example, a boutique may specialize only in buying media space for clients, or only in doing the creative design work.
For a fee, clients can purchase the kind of service needed without having to pay for other unwanted services, as they may have to have if a full-service agency is hired. In order to meet the challenge of boutiques, some full service agencies have been changing their relationship with clients by allowing them to purchase only the specific service or services they require.
An ad agency is staffed by people who are knowledgeable about media, copy, and art. Agencies study the products, markets, competitors and the promotional problems of their clients, whom they usually call their accounts.
They draft and recommend ads and ad campaigns, evaluate and select appropriate media, and contract and pay for space and time in their own names, which is important to remember when you see how they are paid.
Above all, through advertising, they attempt to build attractive, favourable images for their accounts’ brands. The agency’s account executive or account representative is the liaison person who manages an account.
Advertising Agency – Meaning
To the layman, advertising may seem to be a glamorous profession because most people associate advertising with its copywriters or art directors. These are the creative people in advertising agencies. In reality, advertising is a very down-to-earth profession.
Advertising agency is a facilitating institution of the advertising industry. It helps the advertiser in the creation and production of advertisements. These agencies provide a full range of services to advertisers — from the conception of idea to the exposure of the advertisement in the media. When a firm decides upon advertising programme as part of its overall promotion mix, it needs to have a system and an organisation to implement it for the attainment of the desired objective.
Firms do have an advertising and publicity department to manage the function. However small firms, may not have a separate department. In most of such cases the function is either looked after by the marketing manager or the chief executive. The company’s advertising department usually relies on the outsider experts, often advertising agency. The agency prepares the advertisement messages, selects appropriate media and arranges to release it.
The advertising department of a company has only a limited creative function, primarily a supervisory one. This department is merely a liaison point in the company for the agency, though it is this department which is responsible for the advertisement budget and supervises the performance of the agency.
An advertising manager has to co-ordinate with the marketing and sales function, so that the advertising efforts may be fully integrated with the firms marketing and sales strategy. It is the advertising agency which, often assists the advertising manager of a company in the formulation of the advertising programme.
Advertising Agency – Definitions
An advertising agency may be defined as “an independent organisation of creative and business people who specialise in the development and preparation of advertising plans, advertisement and other promotional tools and arrange for the purchase of advertising space and time in the various media”.
A modern advertising agency offers specialised knowledge, skills and experience which are required to produce an effective advertising campaign. It consists of writers, artists, media experts, researchers, television producers and account executives. These specialists work together to understand fully the advertiser’s requirements of an advertisement campaign and develop suitable advertising plans and strategies.
By creating advertisement and delivering them through appropriate media, the agencies implement advertising plans and strategies. A modern advertising agency is the fountain head from which flow most of the advertisements we see and hear in the national and regional media. An agency represents the core of the advertising profession. Madison Avenue, an area in New York where several large agencies are located, has become a symbolic name for advertising.
An advertising agency or an ad agency is a service business dedicated to creating, planning, and handling advertising (and sometimes other forms of promotion) for its clients.
An ad agency is independent from the client and provides an outside point of 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.
An advertisement agency-creates new promotional ideas, designs print, radio, television, and internet advertisements, books advertisement space and time, plans and conducts advertising campaigns, commissions research and surveys, and provides other such services that help a client in entering and succeeding in a chosen market. In general, advertising agencies are not deemed agents of the advertisers, because they act as principals for the services they buy on behalf of their clients.
Advertising Agency – What does an Advertising Agency do?
A plethora of Businesses, Corporations, Government Organizations and Non Profit set-ups hire advertising agencies to advertise their products, brands and services to present and prospective customers.
1. Understand the Product/Company:
An advertising agency begins by getting well acquainted with the client’s goals, products and target audience. This knowledge proves beneficial in planning and creating an effective advertising campaign.
2. Plan and Create an Advertising Campaign:
Once an advertising agency understands its clients’ needs, the process of brainstorming and planning begins. Keeping in mind the client’s goals which can range from pushing sales of its products and services introducing new products in the market reiterating its brand’s benefits attracting new customers or keeping in touch with old ones the advertising executives work towards creating an effective advertising campaign (a single or a series of attention grabbing and unique ads) which is within the client’s marketing goals and budget. This includes creating interesting slogans, attractive jingles and attention grabbing body copy for advertisements. The client has the final word and may ask for rework.
Some Companies like to outsource their overall marketing responsibilities to advertising agencies. In such a case, the ad agency takes over the process of brand building, strategizing and pushing sales through other promotion techniques like sales promotions etc.
Advertising Agencies vary in size in India and abroad — from a couple of people handling all responsibilities to a medium or large sized agency that hires specialized professionals to function each department. It has been generally seen that Full Service Ad Agencies are well equipped to plan and create advertising campaigns for a range of media including TV commercials, radio jingles, print advertisements etc. Depending on the budget, client’s select their agency.
Advertising Agency – 8 Main Functions Performed by a Full-Service Advertising Agency
Following are the functions performed by a full-service advertising agency:
Referred to as the ‘ghost function’, account planning is a much talked about and much hyped function; but remains enigmatic to many, including a great number of practitioners of advertising. Till the mid-eighties, not many agencies had felt the need for such a department. Hindustan Thompson, one of the largest agencies did create an account planning department in 1978, but soon wound it up in the absence of any clear cut work for those assigned the job in the department. The function, however, got resurrected, thanks to the agency’s transnational affiliation and an acceptance of the function over a period of time.
According to Jane Newman, account planning is based on a simple premise. A client hires an advertising agency to interpret its brand to a target audience. “So if one needs to understand the target audience in depth, it’s the advertising agency simply put, it is the raison d’ etre of the account planner” says Newman.
An account planner, hence, would be someone who is charged single mindedly with understanding the target audience, then representing it throughout the entire advertising development process — thereby ensuring that the advertising is both strategically and executionally relevant to the defined target.
The various activities performed by an account planner, thus are:
(a) Planning the objectives of the advertising he makes use of skills of analysis, synthesis, logic and insight.
(b) Selecting and evaluating research feedback on the basis of which the team makes judgements and takes decisions.
(c) Making the objective and the feedback relevant and stimulating to the rest of the team-particularly the creatives.
The account team may or may not be headed by an account planner. But the above function should be attended to. The positive use of research is establishing a dialogue between the creative team and the consumer is a valuable contribution that a planner can make.
Planning in agencies conforms to brand responses — the desired responses that a brand’s advertising should generate. But when we advertise, apart from brand responses we also generate advertising responses — effects on our target audience like amusement, education, entertainment and moving effect. Many times, these advertising responses are an essential part of what the brand is offering to the consumer. Failure to see advertising responses make our planning remote and ineffective.
Account management team is to an advertising agency what the nervous system is to the body. The account management team, comprising both senior and junior level functionaries generally designated as the vice president — account servicing, group head — account servicing, account supervisor and account executives work as conduits between the advertising agency and the advertiser. They are responsible for taking the brief from the client, which they interpret to various specialist departments in the agency, getting the approval of the client and supervising the work to ensure quality production and meeting the deadlines.
According the Bov’ee and Arens — “Responsible on the one hand for mustering all the agency’s services for the benefit of the client, the account executive is often caught in the middle”.
In order to cope with all this, the account executive needs to be knowledgeable and dynamic on the one hand and equally diplomatic, energetic and someone with sharp reflexes, on the other hand.
Creative services are called the heart and soul of advertising. They are also the most visible input in advertising. Creative services are two pronged viz. copy writing and graphics. The copy department is responsible for writing the persuasive messages and the art department for visualising and making visuals in the advertisement.
In fact, perfect synergy is needed between the two specialist groups. The writer needs to be capable of visualing and the visualiser should be a thinker also.
The creative section in an advertising agency has a team of bright, talented copywriters who contribute to the theme of an advertisement.
As for example, A young girl beating a boy in an informal football game, and the idea is to promote Close-up Confidence. This is called copy platform. These copywriters report to their head, who may be called copy chief or chief copywriter.
But merely the copy is not enough. It is the visualiser who puts on paper what has been thought out by the copywriter. It is him who designs the ad. He takes the help of layout artists, typographers and finished artists who prepare the final artwork. The creative energies of copywriters must be coordinated with the design energies of the visualisers. It is job of creative director who performs this job.
One of the most important function performed by the advertising agency is the studio-based production department which delivers a complete approved ad copy. This department is headed by the production manager under whom a number of assistants work. For the print advertisements, the production department does typography, lettering, blocks, stereos and electrons. They also supply text and artwork for photogravure process.
In larger agencies, this workflow is under the control of a traffic controller. Some part of the production work may be brought form outsourcing the services to free-lancers also.
The advertising agency’s business revolves around deadlines. One of the greatest sin in the advertising agency business is to miss a deadline! One of the greatest casualties in the advertising business can result from missing the deadline. In fact, advertising professionals always have this complaint against the advertisers — that anything they are asked to do today was needed by the client yesterday.
On the other hand, the media have their own deadlines to follow. Any delay on the part of the agency may lead to missing on insertion.
The job of the traffic department is to ensure that the work flow is smooth and that everything is completed on time and that all advertisements are received by the media before the deadline. The traffic department keep an eye on ensuring deadlines within the agency and catching up with outside organisation like the media houses, suppliers, traders etc.
Once the production jobs have been completed, the media department steps in for the actual placement of the advertisements in the various media. The media planners are supposed to be experts in understanding the media and the media markets. The media departments job is to match the profiles of the desired target with the profiles of the audiences of a wide range of media. The media are then evaluated according to efficiency, cost and reach.
Media has two separate tasks — media planning and buying and placement. This is the time when the finished advertisement is to be sent to different media. Therefore, the first issue to handle is to determine the total budget, then how it should be allocated to different media, which media would be selected, what would be the frequency, size and position of the advertisement and when will it be published.
All these decisions are taken by a specialist in the agency called the media planner. The media planner is assisted by the media research personnel and media buyers. The media planners get the tear off copies form the media vehicle for when the advertisement was published.
Media buying services involves the scheduling of advertisements, interacting and negotiating with the different media for the purchase of time or space, and supervising that the required material for the final advertisements are sent to the media for release, in time. The media department is headed by a media manager who in turn is assisted by media executives.
Yet another function performed by the advertising agency is of accounting. However, this function should not be confused with account management. It is the department taking care of the accounting requirements of the agency.
Apart from the above mentioned basic functions performed by the advertising agency, many agencies provide a variety of other services and employ specialists to perform these tasks. These activities include designing a sales promotion schemes such as contests, point of purchase displays, public relations, direct marketing, packaging, etc.
All the above discussed functions are the ones undertaken by a full- service agency. In smaller agencies, the above functions may not be rigidly separated. For example, the account executive may also write copy, as well as purchase media time and space for their accounts.
Advertising Agency – 5 Main Principal Areas
The advertising agency should stress on criterion of quality than quantity. The agency organisation should comprise of creative people, who will write the advertiser’s copy, direct its visualisation and produce its finished form. The creative staff will be dependant on the agency service people upon their depth, their adequacy and their availability when needed.
The advertising agency should concentrate on the following principal areas:
1. Research and compilation of factual information about the market needs. This service must be available before the creation of advertising.
2. Advertising distribution channels or media is of utmost importance to reach the target market, efficiently and effectively.
3. Financial management and management of time should be handled judiciously to safeguard the advertiser’s interest.
4. Administration or account execution is the coordinated effort within the agency to bring about harmonisation, concurrency and communication at the highest level.
5. The philosophy of the agency is the inspirational aspect which leads the agency to excel in the field of professionalism.
Advertising agency provides specialised advertising and promotion related services to the advertisers. The advertisers with the assistance of the agencies, develop, prepare and execute their advertising and other promotional programmes.
The advertising business started under the leadership of Volney B. Plamer in 1840. But the integrated marketing services by the agencies were introduced only during 1980s. Different middle-size ad-agencies were merged and formed the structure of super-agencies to serve their clients worldwide.
Advertising Agency – Selection Basis: With Factors to be Considered while Selecting an Advertising Agency
An advertising agency may be a full-service agency or a part-service agency. Each has a different outlook and advertising activities. The selection of advertising agencies depends on whether one wants a full-service agency or a part-time agency. The selection is also made on the basis of compatibility of the agency team, agency stability, services, credibility and the agency’s problem-solving approach.
The full-service agency is involved completely in the advertising functions. It has a large number of expert employees. The organisation is typically useful for performing advertising activities. It looks upon customers as key clients. It communicates with the prospective purchasers. The distinguishing characteristics of the various advertising agencies lie in the creative skills of the personnel of each organisation and in the philosophy of advertising. Larger agencies offer better services.
The part-time agency offers service on free of cost or project basis. These agencies perform various outside activities and co-ordinate the activities of the advertiser and media men. Clients have greater control over advertising campaigns. Advertisers generally embark on advertising activities with the help of part-time agencies. Research agencies generally perform the job of part-time agencies. The selection of a particular agency depends on its size, its services, knowledge and growth.
The selection of an advertising agency depends on the compatibility of the agency. The needs of the company determine the fitness of the agency. The advertiser visits several agencies and chooses the best agency on the basis of its merits, its methods of handling the accounts and using the available opportunities.
The agency team includes management specialists, market researchers, copywriters, media experts, production managers and art directors. The attitude, thinking, experience and personalities of the team members have positive effects on the selection process.
An agency which has been long in existence generally performs efficiently and effectively. The greater the investment in the agency, the more vital the contribution of the agency to the advertising activities. The personnel, finance, management and credit are examined before selecting a suitable advertising agency.
The services rendered by the agency are evaluated with a view to choosing the best advertising agency. Cost accounting, general agreement, project estimates, selling attitudes and other services performed by the advertising agencies are considered to evaluate their efficiency and credibility in performing advertising jobs.
The greater the range of an agency’s services, the more fully it can serve the clients’ needs. The agency can serve the clients by its potential capacity for advertising, sales promotion, media placement, public relations, market research, sales training and distribution channels.
Creativity is the main element in advertising. If the advertising agency is capable of great creative effects, it is selected for the purpose. Style, clarity, impact, memorability and action – these are taken into account while evaluating creativity.
The agency which has a problem-solving approach is considered to be superior and useful. The importance of choosing the right agency cannot be ignored. Calibre, compatibility, balanced services, responsiveness, talent and equitable compensation – these are important factors in selecting an advertising agency.
There are numerous factors which have to be considered by the client before selecting an advertising agency for his products/brand’s campaign.
1. The Requirement of the Client:
Different clients have different requirements and they want tailor made advertisements for their brand. The agency which is capable of handling their requirements should be chosen by them for advertisement campaign. Big companies will go with full-fledged advertising houses as they want special skills to be used in creating most effective ads.
The medium scale or small scale firms may be satisfied with creature boutiques or local ad agencies with lesson budgets. Clients may also take help of more specialized service agencies in combination with their main agency to take specific advantage of their skills.
2. Past Experience of the Client:
Generally, clients keep up with the agency for years if it has been working with them without any major problems right from the stages of development till implementation of the campaigns. Their past equation will give the agency staff a better perspective for future creative campaigns also, so clients do not take the risk of changing their agency in every change in cycle or situation. If the campaign has worked well for one product, the agency is given the contract to work for new products also.
3. Reputation of the Agency:
Some agencies have global fame e.g., Leo Burnett, DDB Needham, Ogilvy and Mather, Mudra Communication are very reputed for their creative skills and professionalism. They have been completing their projects timely. Such agencies have bagged the best clients in the past. The new ones also consider the past reputation of an agency before coming into a business relation with that agency.
4. Compensation to the Agency:
The client have to see the budget they have for the campaign at any point of time. Organisations which can afford a good budget select National and even international agencies but the ones with lesser budget generally stick to smaller; or local agencies. Some clients may even select in-house agencies to save on the media commission or fees.
5. Creative Skills:
Some clients do not want to use in-house agencies because they feel that in-house agencies will not have specialized skill people. Also the creative people do not want to work in small in-house agencies. To take advantage of their creative design, clients go for outside agencies. Client may not be able to attract best web designer; photographer or artists in in-house agency. So to take the advantage of skillful people clients opt for outside agencies. Besides, the special skill people give objectivity to the program more than employee of client.
6. Top Management’s or Promoter’s Interest:
Media planning and buying, agency appointment are major decisions taken by the top management of any company in consultation with the advertising department. More often than not, that agency gets the contract with which the management reviewed as the best, their existing clients have suggested to top management to go for the same agency. Top management also gets influenced with media reviews, supplier’s reviews and other agencies views about the agency they want to choose.
Advertising Agency – 3 Major Types: Large Size Full Service, Small Limited Service and In-House Agencies
Advertising agencies range from one person agency to large size organizations which perform various functions including planning, preparing and placing ads and also provide additional service.
Large size full service agencies and small size limited services agencies are the two broad types of advertising agencies that operate outside the advertising organization and are hired by the advertisers for carrying various functions on commission or fee basis. Instead, advertisers may decide to operate through in-house agencies also being set up by the advertiser to serve their own communication needs.
These are the dominant type of agencies providing full spectrum of services regarding market research, new product introduction plans, and creative services and media purchases. These agencies tend to serve large advertisers who are concentrated relatively in few product categories, including packaged goods, frequently purchased goods and those having high volume of sales.
Generally, full service agencies group their services into four major departments, viz. account management, creative services, marketing services and administrative management group, and roles and responsibilities of these groups are defined clearly-
i. Account Management Group:
It is headed by account executives who manage the interactions with the client called as ‘client servicing’. Account executives (also called as account supervisors or management supervisors) are close to the client and represent the client to the agency and in turn the agency to the client.
They are basically involved in coordinating the work between the agency and the client. Client servicing was used to be considered the backbone of the agency. Over the years there has been an expression of discomfort and dissatisfaction coming from various advertising quarters.
According to head-marketing Marico, client servicing needs to add value otherwise its role turns out to be a simple operational, project management work. Moreover, in today’s scenario when growing number of marketing teams and creative people prefer to interact directly, client servicing needs to be reinvented. As such getting information from the client and putting it in right language does not make any relevance today.
ii. Marketing Services Group:
It renders services related to media, research and sales promotion. Agencies provide marketing services related to sale promotion of the product whereby they manage both consumer and trade promotions. Media related services include analysis of various media opportunities, their advantages and disadvantages.
The advantages are weighed against disadvantages to understand their implications for media reach and cost involved. Also, media policies are analyzed to facilitate media planning and media buying.
iii. Research Services:
It includes testing product concepts, defining target markets and developing marketing and advertising strategies.
iv. Creative Services:
They are provided by the full service agencies through their creative specialists including copy writers, artists, art directors, and graphic designers and so on. These creative specialists combine their creative skills to develop an advertising message. Administrative service group manages agency affairs concerning their financial and human resource.
Management of financial resources involves financial planning, budgeting of revenue and expenditures and formulation of various operating policies. Management of human resource involves formulation of policies and procedures to hire, train, motivate and reward the agency people. This is one of the important functional areas of full service agencies as it relates directly to agency people—the key to the success of any advertising organization.
v. Other Services:
Large agencies are able to administer entire communication needs of their clients. They offer a number of other services to their clients in the fields other than advertising. Sales promotion, publicity, public relations, merchandising, organizing sales meeting and preparing sales literature are the ad-on-services for which agencies have range of expertise available with them.
Since there is a centralization of responsibility and accountability in serving of client’s communication needs, these agencies are found better able to coordinate and integrate various communication services.
Better working environment, a stronger pool of talent, synergistic experience of working with different communication tools, more objectivity in client’s dealings, wider contacts and international links, better market reach and media buying facilities and availability of more professional facilities are the various strengths of large full service agencies and it makes them a dominant player in the advertising industry.
They are, therefore, referred to as ‘Communication Agencies’ also. There are, however, some disadvantages of working with large full size agencies. First, these agencies are more impersonal in their interactions with their clients. There is a lack of personal touch in clients’ dealing for which these agencies often fail to appreciate client’s problems sympathetically and at times there is a risk of losing clients too.
Secondly, large agencies have excessive overhead cost which gets added up to the cost of creating advertising and makes it a less attractive alternative. Thirdly, at times there is found the problem of lack of coordination between various departments. Concerning provision of additional services other than ‘advertising’ to address total communication needs of their clients, agencies are now gradually failing in their attempts to dominate the integration process.
One of the prime reasons is that the specialist divisions floated by full service agencies to provide these additional services are staffed with advertising agency personnel, who lack the experience as well as have lesser inclination for these additional services. Moreover, full service agencies lack common strategy to knit these disciplines together.
As advertising strategy evolves to communication strategy, its purpose predominantly remains to serve as the under pinning for the big idea, which is then translated into TV and print executions. Adapting this idea to other media and thereafter into other communication disciplines was termed as integration, euphemistically.
These are the specialized agencies which offer lesser breadth of services to their clients. While independent media buying agencies concentrate on media buying function, ‘creative boutiques’ are the specialists in creative function and so their client services are limited to creative planning and execution.
Specialized research service agencies offer research services to support the advertising process. Advertising agencies’ failure to provide effective integration of various promotional disciplines has led to a further growth of specialist small agencies providing services in areas other than advertising.
Overtime, these small limited service agencies have grown to a number that they now pose threat to large agencies. There are a number of good reasons for their growth. Small agencies are concentrated in one functional area and they provide a more focused and personalized services to their clients.
Advertisers’ preference for creative boutiques is based on the expectation that these agencies provide good creative work and better solution. Media buying agencies being specialized in media buying function are able to negotiate lower prices with media houses and usually get better buys as compared to full service agencies.
Being isolated from day-to-day routines and diversions of full service agencies, creative people get better environment to interact and are able to concentrate more on creative work. Advertisers, thus, get specialized creative services at lower cost as they do not have to pay for services which are not required.
The specialized small agencies have shorter hierarchical structure and channel of command which results into operational flexibility for these agencies. Advertisers find these agencies more accessible for interaction purposes. Due to their focused approach and proper awareness of client’s problems the speedy production of ad is another positive feature of these small agencies.
But there are some disadvantages too. First, being small in size these agencies at times lack talent, certain experiences and best technical facilities which make them less attractive alternative for advertisers. However, through networking of their services with others, these small agencies make an attempt to fill the gap in their client services. Secondly, a situation of imbalance may arise in agency functioning in case an agency has a client with large advertising spend.
The enormous growth of small independent agencies offering specialized services in the area of advertising and other disciplines has caused full service agencies to do introspection of their services and their capabilities to integrate various disciplines.
As evidence to agencies’ realization of the changed scenario, many large agencies are trying to strengthen their core areas of operations and increase their efficiency to keep the cost lower. As an alternative, outsourcing some of their operations to smaller agencies or else buying out these small agencies to add to their specialization are the other emerging trends in the large agency scenario.
As against large full service and small limited service agencies, in house agency is the internal arrangement done by the advertisers to internally create advertising and/or negotiate for media buying. Although internal, the in-house agencies are physically separate from advertising organization.
These are set up and owned by the advertisers themselves to address their own advertising needs on a priority basis. Calvin Klein, Avon, Revlon, Benetton, Dabur India Ltd. are some of the organizations which have set up their own in-house agencies to take up either in full or in partial manner the various advertising related activities. Adbur’ an in-house agency, for example, looks after media buying operations for Dabur India Ltd.
The very purpose of owning and operating through in-house agency is to save on advertising and promotion cost, save time and to have a more effective control on advertising process. In- house agencies hire specialists and experts like outside agencies. But for the lack of exposure and fewer avenues for growth, these agencies fail to attract as well as retain the good specialized persons.
This at times gets reflected into lack of experience and objectivity in the operations of in-house agencies. Therefore, advertisers prefer not to operate entire advertising process through in-house agencies only. According to their strengths and the needs of the advertiser, the in-house agencies are used for a part of the advertising related activities. For the rest outside agencies are hired to have the benefits of specialization.
Thus, one of the prime aspects of advertising planning is to decide about its creation – whether internally or externally, through outside agency or through combining of the two for different activities of advertising processes. The decision in this regard cannot be unilateral, as it depends upon situation and various other factors such as availability of specialized skills both internally and externally, the advertising objectives and budget, the competitors, the nature of competition and so on.
Advertising Agency – Agency Evaluation
The process of agency evaluation involves regular assessment of two aspects of performance area-financial and qualitative. The financial assessment focuses on how the agency conducts its business to verify costs and expenses, the number of personal hours charged to an account and what payments are made to media and other outside service suppliers.
Qualitative assessment explores the agency’s efforts devoted in planning, developing and implementing the client company’s advertising campaign and an assessment of the achievements.
Depending on the importance of advertising in a company’s marketing programme, both informal and formal methods of assessments are used by different companies.
Some companies develop a formal and systematic evaluation method that uses a ranking scale for creative and media services such as poor-average-excellent on a scale from 1 to 10.
Brand or Promotion managers complete the advertising agency performance evaluation, usually once a year. These reports are reviewed with the agency at each annual meeting.
Some large companies as may use more than one advertising agency for different product lines. The advertising budgets for smaller companies being small, smaller agencies may be willing to work with them and hope to grow with them.
According to an expert in the field, the average tenure of client agency relationships has declined from 7 years to 5 years since the mid-eighties.
Advertising Agency – 3 Basic Ways for an Agency to Earn Money: Media Compensation, Mark ups and Fees
The agencies earn profits for the service they give but the recent trends in business i.e., mergers of super-agencies, shifts in emphasis from advertising to sales promotion and direct marketing, increased production costs and fragmentation of media vehicles have led to a sizable cut into agency profits. Besides this, different clients demand different services, forcing the agency to develop various compensation methods.
There are basic three ways for an agency to earn money. They are:
1. Media Compensation:
When ad agencies came into being, they were only space brokers or representative for newspapers, since they saved the media of the expense of sales and collection, the media allowed these agencies to retain some part of money as media commission on the space and time they purchased from them on behalf of their clients. That started a tradition which is followed even today. This is now changing rapidly.
For large accounts, the agency provides extensive services for this commission, e.g., if for a full page in Times of India the rate card says Rs. 1, 00,000, the newspaper bills the agency Rs. 1, 00,000, which is in turn taken from client by the agency and agency commission of 15-20 percent is retained by agency as its earning.
The agency provides creative media, accounting and account management services for this commission. With the trend of clients negotiating smaller commission, many agencies now charge fee for services that used to be free in the initial days when agencies had come up.
2. Mark ups:
When making a creative ad, the agency has to buy a variety of services or material from suppliers outside for which it pays to the suppliers. The agency marks up this bill to the client’s bill which becomes some 15-20 percent of the invoice. To get their commission, local agencies have to use the markup formula.
Today, many agencies feel the mark up formula does not cover their costs of handling the work, so they are increasing their mark ups beyond twenty percent. While this helps, many agencies are still under pressure, many of them are going for a fee system in place of the commissions and markups.
The clients in modern day want agencies to do more than just place the ads for them in the media. Fees thus is becoming a more common way of compensation to the agencies. Very few national advertiser rely on fifteen percent commission system or a fee based system. Maximum clients use some reduced commission or incentive system. There are two pricing methods in the fee system. With the fee-commission combination, the agency charges a basic monthly fee for all its services to the client and retains any media commission earned.
In the retainer method, agencies charge for all their services either by hour or by the month, and credit any media commission earned to the client. Accountability is a major issue in client-agency relationships. With a new type of agency compensation, the incentive system, the agency earns more if the campaign attains specific, agreed upon goals. If it falls short, the agency earns less.
The agencies thus, are rewarded on the basis of their performance. If they perform better than agreed goals they are given an added reward but if their performance is less than the agreed goals, they are put on review. If the performance is very poor, the contract for the next cycle may not be given to the agency by the client.
Advertising Agency – Agency Organization: Creative, Account, Marketing and Administrative Services
Agencies organize themselves in different ways. The large agencies group their various specialists into departments with defined areas of responsibility. The four functional groupings are- (1) creative services, (2) account services, (3) marketing services and (4) administrative services. Though this, chart locates the specialists it does not show how, they work together. They work in account groups composed of individuals from each area; creativity, research, media, and account, management.
The account group works as a team for a particular client, its plans are reviewed and approved within the agency by a group of senior managers variously referred to as a plans board, a strategy review board, or a creative review committee. The plans must be approved by the client. After the plans are confirmed the process of producing the ads gets under way.
1. Creative Services:
According to David Ogilvy “The creative function is the most important of all. The heads of our offices should not relegate their key creative people to positions below their salt. They should pay them, house them, and respect them as individual stars.” The copywriters, artists, art directors and graphics specialists are creative people. These people are directly involved in creating the advertising messages, though they have no monopoly on creativity. Account managers, media planners, and researchers also work creatively in their own areas.
Agencies pride themselves on their creative work. While some set forth a philosophy or guidelines to be adhered to others develop a style reflected in the ads they do. A 1977 Wall Street Journal article thus commented on the creative work done by the Leo Burnett Company. Burnett’s ads personify products with a single character, often in a gently humorous vein.
Some of its characters have become stars in their own right, such as the Jolly Green Giant, Tony the Tiger, Charlie the Tuna, Morris the Cat, the Pillsbury Doughboy, the Keebler Elves and the lonely Matyag repairman. The agency excels at creating distinct images for its clients. It gave United Air Lines its “friendly skies” Schlitz beer its gusto, and RC Cola a sassy country image. Burnett’s Marlboro campaign is considered a classic.
Copywriters are generally grouped under a copy supervisor who reports to a creative director, who may report to an executive creative director. Creative directors spread their attention over several accounts. While a writer may work exclusively in one account, a creative review board at the top oversees the creative work on all accounts.
The number of layers of supervision increases with the size of the agency and the size of the account. A writer is often teamed with an art director and a television producer to stimulate interaction. Working together on the same problems, they experience the enterprising spirit of a small agency.
2. Account Services:
People with titles such as account executives, account supervisors or management supervisors handled account management. Account executives are closest to the client in terms of day-to-day contact. They are assigned full time to one of the client’s brands. They represent the agency to the client and represent the client within the agency. They must be competent in both worlds. They must have a thorough knowledge of their client’s business. They must understand all operations within the agency.
From initial planning to final executions they organize and control the flow of work on the account through all stages. They assemble all relevant facts bearing on the brand, analyses and interpret them, develop strategy, present the agency’s plans including creative work to the client, obtain ail necessary approvals, oversees the execution of those plans, and monitors the results.
To do all this they have to build good business relations with in the agency and a good rapport with the client. They must be able to get cooperation. They must be able to synthesize the thoughts of all involved and communicate them well to others. As leaders they must take the initiative and generate enthusiasm among those who work with them.
In larger agencies, account executives are responsible to an account supervisor who brings greater experience to strategic planning and client relations. At the next highest level, management supervisors function similarly. They are more likely to be concerned with policy matters and the agency’s own plans for its future.
3. Marketing Services:
Marketing services include media research and sales promotion.
(i) The Media Department:
It is staffed with analysts, planners and buyers.
(a) Analysts – The analysts keep abreast of changes in media audiences, costs and competitors spending. They test alternative plans for reaching the clients best prospects most efficiently.
(b) Planners – The planners work closely with other members of their respective account groups in developing media strategy, allocating the clients dollars and planning the schedule.
(c) Buyers – The buyers execute the plan. Those who buy spot television and radio time look for the best rates and place the orders. A detailed knowledge of the media situation in each market area can be of much advantage. Therefore television and radio spot buyers in some agencies are assigned particular markets and buy time in those markets for all of the agency’s clients.
In other agencies these buyers concentrate on assigned clients and buy for those clients in all markets. Due to the large investment involved when buying network television time, most agencies assign that responsibility to a person who specializes in negotiating with the networks. Other buyers specialize in the print media—magazines, newspapers and outdoor.
(ii) The Research Department:
It is involved in all phases of agency planning—testing product concepts, defining market targets, developing marketing and test marketing and measuring results. Research requires specialists in questionnaire construction, sampling, focus- group interviewing, statistical analysis and experimental design.
Assigned to particular clients research supervisors serve as the department’s representatives on those account groups. They focus on the problems to be solved. They marshal the resources of the research department to help solve those problems. People in the research department design the projects, interpret the data, and present the findings. Field work, including large-scale interviewing and data collection and tabulating, is framed out to outside firms specializing in those operations.
In the marketing of packaged goods sales promotions directed to consumers and the trade are highly important. Hence large agencies have specialists in planning and managing promotions. Typical consumer promotions include sampling, couponing premiums, contests and sweepstakes. Trade promotions include trade allowances, cooperative advertising and point of purchase displays.
4. Administrative Services:
To earn a profit, advertising agencies like any other Successful business, must be well managed. In addition to be bookkeeping functions now largely performed by the computer, there should be people who plan and control the agency’s financial future, budget revenues and expenses, set operating policies, and function as administrators from the president of chief executive officer to the various department heads.
As agency is a people business, its success largely depends on its personnel practices, on how well it hires, trains, inspires and rewards its people. Strong leadership at the top is often the key. David Ogilvy chairman of Ogilvy & Mother International USA said, I want all our people to believe that they are working in the best agency in the world. A sense of pride works wonders.
The best way to “install a generator” in a man is to give him to greatest possible responsibility. Our management should devote more time to this than routine salary reviews.
Of course salaries must be reviewed at regular intervals and “routine” raises must be given out; they are expected.
But the most effective way to use money is to give outstanding performers spectacular rewards at rare intervals. Nothing is too good for our make-or-break individuals.
It is virtually important to encourage free communication upward. Encourage your people to be candied with you. Ask their advice—listen to it.
Ogilvy and Mother offices should not be structured like an army, with over privileged officers and underprivileged subordinates. We are all fellow-professionals, dedicated to the service of our clients.
Advertising Agencies – Advantages and Disadvantages
A manufacturer of a product can-either do all the advertisement related work by himself or get such work done by an advertisement agency.
The following are the benefits of using the services of an advertising agency:
1. Expertise – An advertisement agency has a large amount of expertise in all the aspects of advertising. Therefore, a company gets highly professional services from an ad agency.
2. Contacts – An ad agency has good contacts with copywriters, artists, photographers etc. This is very useful to a company which wants to advertise.
3. Economy – A company pays lesser amount to an ad agency for the advertisement services than what it would spend if it does everything by itself. This is because an ad agency can get everything done at a lesser cost on account of its experience, expertise and contacts.
4. Savings in time – An ad agency can do the work much faster than what a company itself can do.
5. Marketing research – An ad agency can conduct market research on behalf of its clients which is very useful and effective while launching advertisements.
6. Concentration on production – A company can entrust its advertisement related work to an ad agency and concentrate its time and efforts on production.
7. Media mix – An ad agency can suggest the best media mix to advertise the products based on the nature of the product, the consumers etc.
8. Brand development – Brand development is a complex task. An advertisement agency lends its expertise in the brand development to a company.
Though there are several advantages of using the services of an advertising agency, there are also the following disadvantages:
1. Additional expense – The charges paid to an advertisement agency are considered an additional expense by some companies. Small companies cannot afford these expenses.
2. Unfamiliarity of the product – An advertisement agency may have the expertise in most of the products but not in the product of a particular company, in which case the advertisement may not be effective.
3. Unclear Expectations – There is always a difference between what one expects to accomplish with the ad campaign and what the agency actually delivers.
4. Low priority – Unless a company is regarded as a big client by the ad agency, it may not allocate its best resources to the project. If the agency picks up more big clients after signing a contract with a company, the latter may get pushed even farther down the priority line. As a result, the project may be assigned to inexperienced staff members.
5. Limited Creative – Thinking-An advertisement agency itself may have limited creative capacity. In such a case it may use an already used advertisement campaign again. In such a case the advertisement will lack creativity, novelty and also effectiveness.
Advertising Agencies – Client-Agency Relationship: With Stages and Factors
One of the most important factors in the success of advertising program is the client-agency relationship. Advertising agencies need clients to succeed in their business. New contacts come from personal contacts with top management, referrals from satisfied clients or advertising consultants, publicity or recent successful campaigns, trade advertising, direct mail solicitation, or the agency’s general reputation. The most successful ways to develop new business are clients who strongly refer the agency to others, having competitive presentation skills and cultivating a personal relationship with a network of top executive.
Most agencies get clients by referral from existing clients, review consultants, friends and other agencies. The head of a company may suggest an agency to other company heads if he is satisfied with his agency. If a prospective client presents a conflict of interest with an existing client, the agency may decline the business and refer the prospect to another agency.
Independent agency review consultants often help arrange contracts between agencies and clients. Sales representatives for media and suppliers frequently refer local advertisers to an ad agency they know. So it is important for agencies to maintain cordial relations with the media, suppliers, and their existing clients and also with other agencies.
2. Excellent Presentation:
For being successful in business every agency needs to have excellent presentation. Some advertisers ask for speculative presentations because they want to place order only after judging the presentations before signing the contract. But most agencies prefer to build their presentations around the work they have already done, to demonstrate their abilities without giving away idea for new campaign. .
The bigger the client, the bigger will be the presentation. The process of presentation allows the agency and the client to know each other before agreeing to work together. Here the integrity, regards for each other, trust and perfect communication play an important role in yielding the best results.
3. Networking and Community Relations:
New business comes from people you know and the community you interact with. Agencies can be helped by old clients, experts in the business, employees of agencies etc. Agencies work free for non-profit organizations and charities. Agencies may help local politicians, or contribute to arts, education, religion or the community. Some agencies sponsor seminars some assist clubs or other professional organizations. All these activities help an agency gain visibility and respect in its community.
4. Soliciting and Advertising of New Business:
Agencies which are less known must take an aggressive approach. Agency may ask for new business by advertising, writing letters, making cold calls, or even posting a viral video, or YouTube. An agency principal usually solicit new business, but staffers help prepare presentations. This exercise will get them business and help them sustain in this cut-throat environment.
All agencies try their level best to give most creative presentation to prove their excellence. The better the presentation the greater the business contracts for the agencies.
Stages in the Client-Agency Relationship:
There are stages in the life cycle of the agency-client relationship as it is with any other business.
This relationship between the client and agency passes through four different stages:
This is the stage that happens before an agency and client officially do business. They may know each other by reputation, by previous ads, through social networks or social contacts. In the initial stage, the perceptions about the agency in the mind of client plays an important role.
Through the presentations, the agency tries to give the best impression it can because it is selling and the client is buying. There are some magazines which give reviews about the agency’s performances. There are some review magazines which help the client with the criteria for selection of the most suitable agency.
The development stage begins soon after the agency is decided. During this period, the agency and the client are at the peak of their optimism and eager to develop a mutually profitable relationship. Each sides expects high results from the other side and both are forgiving. During the development, the norms of relationship are established. Each one’s role gets set, the true personalities of all the players come out, and the agency creates its first work.
At this stage, the client eagerly awaits the output of the agency. The client then judges each and every aspect of the creative campaign made by the agency. The agency also gets to understand the mind of the client after he has seen the first creative work. The agency gets to see how receptive the client is to the new ideas and how easy the client’s staff is to work with the agency.
This stage also tells the agency how well the client pays its bills. During the development stage, the issue is that the relationship also happens. If things are not smooth at this stage, the client or the agency many withdraw itself from business relationship.
Stage 3- The Maintenance Stage:
The regular day-to-day or year-in-year out relationship is successful, it may carry on for many years. If on the other hand, the client is not satisfied with the agency, the relationship is much shorter. May be a couple of years or more whereas when the relationship clicks, it can go for decades.
Stage 4 – The Termination Stage:
The most unfortunate situation comes up when there are irreconcilable differences between the two parties. The relationship then get terminated. This happens mostly when the agency acquires a competing account, or the agency’s creative work doesn’t seem to be working or when one party decides not to work with the other party any more. It is not very rare to find clients terminating the agency.
The way termination is handled will affect both sides for a long time. Sometimes the two parties may come back and reconstruct the relationship but many times the two never get back together. Termination, therefore, should be handled properly so that each party feels all is not gone, it can be re-engineered later.
Factors Affecting the Client-Agency Relationship:
Many variables have an impact on the client agency relationship.
They can be grouped into four major C’s:
3. Conduct, and
The Chemistry is most important factor between the staff of agency and client’s staff. If the teams do not understand each other’s perspective, a breakup in partnership happens. Whenever there is a gap between the cultures of the two firms, there are bound to be some noises and they lead to breakup of agent-client relationships.
Poor Communication is very often cited as the reason for both parties not doing well. When there is lack of communication on either side about objectives of advertising, roles, expectations from the campaign and from the agency, misunderstandings between the two crops up. Regular communication and explicit agreement on mutual contribution for mutual gain are the key to success in any situation.
The reason in most countries for agency switches is Bad Conduct or performances of the ad agency. The client demands more services from the same agency than what they demanded some years ago due to cut throat competition it is now facing in the global market for any product / service.
When the agency does not respond to the marketing issues of the client, the contracts are cancelled. The client sometimes is not able to give due information to the agency at the appropriate time or does not appreciate the good work or treats agency like a vendor, then too the relationship gets upset.
Changes happen in every relationship whether it is formal or informal. Some of them unfortunately, damage the client-agency relationship.
The client’s management may change or the marketing politics may change within a short period. New arrangements have to be made for such changes. Sometimes, the agency may lose key designers or photographers to other agencies. Client conflicts occur when the agency starts an account with the advertiser’s competitors.
Though legally an agency cannot work without its clients permission with their competitors, but there are cases in which such situations have happened. These changes hamper the relationship between the client and the agency if not handled with strong principals of professional ethics.
The best solution given by some researchers to improve the understanding between clients and agencies would be to have staff members change places for a while. It gives people a whole new perspective on their agency job and the daily challenges that their clients are facing.
Advertising Agencies – Role
The American Association of Advertising Agencies (AAAA) defines an advertising agency as an independent organization of creative people and business people who specialize in developing and preparing marketing and advertising plans, advertisements and other promotional tools. The agency also purchases advertising space and time in various media on behalf of different advertisers, or sellers (its clients), to find customers for their goods and services.
Reasons for the Advertiser’s to Hire Agency or the Role of Ad Agency:
1. The agencies are independent:
They are not owned by the advertiser, the media, or the suppliers, so they can bring an outside, objective viewpoint to the advertiser’s business. This state the advertiser can never attain if he is not using the agencies.
2. They employ a combination of business people and creative experts:
The agencies employ many skillful professionals including administrators, accountants, marketing executives, researchers, market and media analysts, writers and artists. They have day- to-day contact with outside professional suppliers who create illustrations, take photos, do the art work, and shoot commercials, record sound and print brochures.
3. Agencies have media experts:
The agency provides yet another service by researching, negotiating, arranging, and contracting for commercial space and time with the various print, electronic, and digital media. Because of its media expertise, the agency saves its clients time and money.
4. Agencies are exposed to a broad spectrum of market situations:
A good agency serves its client’s needs because of its daily exposure to a wide spectrum of marketing situations and problems both here and abroad. As technology has enabled companies to work across borders with relative ease, the advertising business has boomed worldwide. All the large agencies of UK or USA maintain their offices all over the globe.
5. Their moral, legal and ethical obligation towards clients:
Agencies do not work for the media or the supplier. Their moral, ethical, financial and legal obligation is to their clients. Just as a well-run business seeks professional help from attorneys, accountants, bankers, or management specialists, advertisers use agencies out of self-interest because the agencies can create more effective advertising and select more effective media than what the advertisers can themselves. Today all big advertisers rely on an ad agency for expert, objective counsel and unique creative skills-to the guardian of their brands.
Advertising Agencies – Services Performed by Advertising Agencies for their Clients
Services Performed by Advertising Agencies for their Clients:
Advertising agencies are outside companies that provide for the marketing and advertising needs of other businesses and organisations. Advertising agencies offer a full range of advertising services and advice based on market studies, popular culture and advanced sales techniques. Because they are independent from the client company, they can be objective about a client’s promotional needs.
(i) They create advertisements and place them in the appropriate media outlets throughout the world.
(ii) They produce logos, creating effective and attractive colour schemes to draw the consumer’s attention to their clients’ ads.
(iii) They also prepare slogans and brochures, and write descriptive copy for sales materials.
(iv) They may produce public service announcements for charitable organisations and social programmes as well, and issue press releases for new programmes, events, and products.
(v) They use assorted forms of media to promote their clients’ businesses or organisations, including magazine advertisements, newspaper ads, radio and TV commercials, websites, and even infomercials.
(vi) They also plan events, provide booths at conventions, and give away promotional items.
The way advertising agencies work is by getting to know their clients’ product or service well and determining which demographic provides the best audience for promotion. If a company sells designer handbags, an ad agency would likely try to position the company’s TV commercials during women’s programming or on a channel geared toward women. The look and tone of an ad campaign is also dependent upon demographics. If the company’s target audience is mature adults, design elements should be more traditional than if the target were a younger generation.
Advertising Agencies – Trends of Advertising Agencies in India
In today’s modern world of cutthroat competition and survival for fittest, one can hardly imagine the survival of a brand without advertisement. This is where advertisement agencies in India come into the picture.
From building a brand to promoting it, advertisement agencies in India have been providing its services to its clients all over. Going ahead, advertisement agencies in India have a bright future considering the ever expanding Indian market and its dependence on advertisement.
Advertising agencies in India service their client by preparing slogans, brochure and logos in a way that the brand connects well with the consumers and attracts their attention. They come up with descriptive copy for sales materials. Apart from these activities, they also issues press releases for upcoming programs, events, as well as products.
With increasing competition in the market, technological changes, advertising agencies in India is undergoing many changes. One such trend is the extensive market services, studies and research conducted by these agencies. The broad scope this marketing research includes quantity and quality, international marketing and ethical issues.
These include a redefinition of the marketing researcher, the ongoing nature of marketing research, qualitative research, quantitative research, international marketing research, Internet marketing research, and ethical issues in marketing research. Based on their findings, they advise the manufactures.
Another visible trend is the increasing use of television as an advertising medium. With cable television reaching to millions of homes, and with an increasing number of channels, television is clearly the favorite medium among advertising agencies and their clients. With its advantage of creating visual and emotional appeal, more than 40 per cent of total money spend on advertising is consumed by this medium.
The use of Internet for advertising is yet another trend. With about 25 million users, Internet advertising in India is increasingly on the rise. This may well explain the growth of Graphic Design & Advertising Agencies servicing their clients with high quality professional graphics, advertising material. With mobile phones and FM climbing the popularity chart, telecom firms and FM radios have joined hands with advertising agencies in India. Likewise outdoor advertising like billboards, hoarding have also become a reckoning force.
An advertising agency acts as a consultant to the client in formulating the advertising plans and translating them into an advertising campaign. Another role of the agency is placing the advertisement in the media, because of its traditional association with the media.
The placement aspect has assumed considerable importance owing to media boom and the resultant complexities these complexities could be reduced by ad agencies. An advertising agency can be defined as an independent organization of creative business people who develop, prepare and release the advertisements for the marketers seeking to find customers for their goods and services.
In India, there are about 7,000 advertising agencies out of which 700 ad agencies are recognized by the Indian Newspapers Society (INS).
INS is a regulatory organization regulating ad agencies for:
i. National Income Accounting
ii. Annual Billing