Launch! Advertising and Promotion in Real Time, 2009a
Launch! Advertising and Promotion in Real Time, 2009a Launch! Advertising and Promotion in Real Time, 2009a
P&G reacted to this problem when it shifted all its ad and marketing duties for its Oral B brand to a newly created team at Publicis Groupe that will not work on any other brands. As P&G’s global marketing officer explained, “We find many of our brands are working with lots of agencies who all have their own creative people, their own planners, their own account people, and it gets to be unmanageable.” Only time will tell if other advertisers follow P&G’s lead. [1] How Do We Get Paid? Historically, an agency receives a commission or percentage of the cost of the media it buys for the client. Traditionally, mass media has paid advertising agencies a 15 percent commission on all business brought to them. The commission covers the agency’s copywriting, art direction, and account service charges. Today, this compensation model makes less sense because many advertising services no longer include a traditional media buy. Figure 2.11 Here is an example of how agency compensation works for a single commercial during the Super Bowl. The straight 15 percent commission is still used in some cases, but some agencies charge less than 15 percent, or have sliding scales based on how much the client spends (the more money spent, the lower the percentage fee). Some agencies offer flat-fee arrangements that clients and the agency agree upon, while others charge on an hourly basis. Others will do a combination of a flat base fee plus smaller percentages Saylor URL: http://www.saylor.org/books Saylor.org 47
per media. Interactive media currently charges the highest commission because it requires the most management time from agency personnel. Other innovative models include licensing fees or royalties for ideas. Some even use performance fees, in which the agency’s fee depends on the success of the campaign. The client and the agency define what they mean by “success” at the start; they might measure this by looking at how well consumers recall the ads or might measure actual product sales. Agencies using performance-based models can earn much more—or much less—than the standard 15 percent commission. The rationale, however, is that the compensation would be tied to the value of the ideas. As we’ll see later, the question of just how—and whether—we should quantify the effect of advertising is one of the burning issues the industry faces. Types of Clients We group clients into three main categories: 1. Manufacturers and service providers (like Boeing and Bank of America) 2. Trade resellers (namely, retailers like Best Buy or Starbucks, as well as wholesalers and distributors) 3. Government and social organizations (such as local, state, or federal governments and their specialized offices like tourism boards; and social organizations from national groups like the United Way or local hiking clubs) Job Functions inside the Agency Account Managers Account managers (with titles like account executive, account supervisor, or account manager) work with clients to identify the benefits a brand offers, to whom it should focus its messages (the target audience), and the best competitive position. They then develop the complete promotion plan. Account Planners On the market research side, account planners from the agency work with clients to obtain or conduct research that will help clients understand their markets and audiences. Creative Services Staff Creative services staff (such as an art director or copywriter) work with clients to develop the concepts and messages that will catch consumers’ interest and attention. Media Buyers Saylor URL: http://www.saylor.org/books Saylor.org 48
- Page 2 and 3: This text was adapted by The Saylor
- Page 4 and 5: 1.1 Why Launch!? LEARNING OBJECTIVE
- Page 6 and 7: 1.2 Meet Our Agency Partner: SS+K L
- Page 8 and 9: This perspective is a consumer-cent
- Page 10 and 11: Follow the e-mail trail. Dr. Duke C
- Page 12 and 13: As you can see, it takes a village
- Page 14 and 15: 1.3 The Pitch: Win the Account LEAR
- Page 16 and 17: Initial strategic thinking. Before
- Page 18 and 19: Figure 1.9 The Pitch Process How do
- Page 20 and 21: 1.4 Let’s Meet the Potential Clie
- Page 22 and 23: 1.5 Exercises TIE IT ALL TOGETHER N
- Page 24 and 25: message to them. What do you percei
- Page 26 and 27: LEARNING OBJECTIVES After studying
- Page 28 and 29: eally are trying to fake you out. F
- Page 30 and 31: MySpace. We weren’t early enough
- Page 32 and 33: Specialty print media include bookl
- Page 34 and 35: Ad-Supported Content Ad agencies ar
- Page 36 and 37: [5] “Traditional Radio’s Digita
- Page 38 and 39: the promotional activities that int
- Page 40 and 41: increasingly thin layer of audience
- Page 42 and 43: Figure 2.8 A sales promotion is a t
- Page 44 and 45: 2.3 Advertising Industry Structure
- Page 46 and 47: Figure 2.10 Matrix Organization in
- Page 50 and 51: Media buyers and media planners eva
- Page 52 and 53: Within a company, the jobs of the a
- Page 54 and 55: [1] Suzanne Vranica, “Ad Houses W
- Page 56 and 57: drumsticks and simulated drumhead p
- Page 58 and 59: Figure 3.1 Build a Foundation Chapt
- Page 60 and 61: 3.1 Economic Effects of Advertising
- Page 62 and 63: Broadcast radio and TV rely exclusi
- Page 64 and 65: 3.2 The Good: Advertising Enhances
- Page 66 and 67: washing with soap, that remain kill
- Page 68 and 69: share, so they tend to be more stri
- Page 70 and 71: now one of the primary attributes s
- Page 72 and 73: [8] Mister Snitch!, “Top Ten Reje
- Page 74 and 75: here is subjective—your image of
- Page 76 and 77: “If you let me play sports, I wil
- Page 78 and 79: Categories can be made quite specif
- Page 80 and 81: Luxury products are not a bad or wa
- Page 82 and 83: [9] Jean Grow and Joyce M. Wolburg,
- Page 84 and 85: 3.4 Advertising Regulation: Who Loo
- Page 86 and 87: Agencies), the ANA (Association of
- Page 88 and 89: [3] American Association of Adverti
- Page 90 and 91: about one-half the size of existing
- Page 92 and 93: Chapter 4 Consumers and the Communi
- Page 94 and 95: messages they see or hear, and when
- Page 96 and 97: 4.2 Is the Medium the Message? Comp
per media. Interactive media currently charges the highest commission because it requires the most<br />
management time from agency personnel.<br />
Other <strong>in</strong>novative models <strong>in</strong>clude licens<strong>in</strong>g fees or royalties for ideas. Some even use performance fees, <strong>in</strong><br />
which the agency’s fee depends on the success of the campaign. The client <strong>and</strong> the agency def<strong>in</strong>e what<br />
they mean by “success” at the start; they might measure this by look<strong>in</strong>g at how well consumers recall the<br />
ads or might measure actual product sales. Agencies us<strong>in</strong>g performance-based models can earn much<br />
more—or much less—than the st<strong>and</strong>ard 15 percent commission. The rationale, however, is that the<br />
compensation would be tied to the value of the ideas. As we’ll see later, the question of just how—<strong>and</strong><br />
whether—we should quantify the effect of advertis<strong>in</strong>g is one of the burn<strong>in</strong>g issues the <strong>in</strong>dustry faces.<br />
Types of Clients<br />
We group clients <strong>in</strong>to three ma<strong>in</strong> categories:<br />
1. Manufacturers <strong>and</strong> service providers (like Boe<strong>in</strong>g <strong>and</strong> Bank of America)<br />
2. Trade resellers (namely, retailers like Best Buy or Starbucks, as well as wholesalers <strong>and</strong> distributors)<br />
3. Government <strong>and</strong> social organizations (such as local, state, or federal governments <strong>and</strong> their<br />
specialized offices like tourism boards; <strong>and</strong> social organizations from national groups like the United<br />
Way or local hik<strong>in</strong>g clubs)<br />
Job Functions <strong>in</strong>side the Agency<br />
Account Managers<br />
Account managers (with titles like account executive, account supervisor, or account manager) work with<br />
clients to identify the benefits a br<strong>and</strong> offers, to whom it should focus its messages (the target audience),<br />
<strong>and</strong> the best competitive position. They then develop the complete promotion plan.<br />
Account Planners<br />
On the market research side, account planners from the agency work with clients to obta<strong>in</strong> or conduct<br />
research that will help clients underst<strong>and</strong> their markets <strong>and</strong> audiences.<br />
Creative Services Staff<br />
Creative services staff (such as an art director or copywriter) work with clients to develop the concepts <strong>and</strong><br />
messages that will catch consumers’ <strong>in</strong>terest <strong>and</strong> attention.<br />
Media Buyers<br />
Saylor URL: http://www.saylor.org/books<br />
Saylor.org<br />
48
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