The development, execution and administration of an advertising and promotions program involve the efforts of many individuals, both within the company and outside it. The following schematic shows the Participants in the Integrated Marketing Communications process:
To understand this better, envision a scenario where P&G is the Advertiser (client), which is using J. Walter Thompson as its Advertising agency for its Tide brand. The role of a Media organization is to provide an environment for the firm's marketing communications message. The media must have editorial or program content that attracts consumers so that advertisers and their agencies will want to buy time or space with them. The next group of participants are organizations that provide specialized marketing communications services. They include direct-marketing agencies, sales promotion agencies, interactive agencies, and public relations firms. The final participants shown in the promotions process are those that provide collateral services, the wide range of support functions used by advertisers, agencies, media organizations, and specialized marketing communications firms. These individuals and companies perform specialized functions the other participants use in planning and executing advertising and other promotional functions.
Companies use three basic systems to organize internally for advertising and promotion:
1. Centralized system: The most common example of a centralized system is when the advertising manager controls the entire promotions operation, including budgeting, coordinating creation and production of ads, planning media schedules, and monitoring and administering the sales promotions programs for all the company’s products or services.
2. Decentralized system: Popular in large corporations with multiple divisions and many different products. Consist of separate manufacturing, research and development, sales, and marketing departments for various divisions, product lines, or businesses. Assign each product or brand to a brand manager who is responsible for the total management of the brand, including planning, budgeting, sales, and profit performance. There may be additional layers of category managers above them, like in P&G.
3. In-house agencies: An in-house agency is an advertising agency that is set up, owned, and operated by the advertiser. Some in-house agencies are little more than advertising departments, but in other companies they are given a separate identity and are responsible for the expenditure of large sums of advertising dollars. E.g. Calvin Klein.
The figure below shows the advantages and disadvantages of using one of the above 3 systems of advertising organization systems:
Types of Ad agencies:
Full-service agencies - Offers the client a full range of services, including creative, account, marketing, financial and management services.
Creative boutiques - Specialize in creative services.
Media buying services - Specialize in media buying.
These agencies are typically compensated through a commission system which works somewhat similar to the depiction below:
However, increasingly marketers are using an performance incentive based compensation system for paying ad agencies.
Companies use three basic systems to organize internally for advertising and promotion:
1. Centralized system: The most common example of a centralized system is when the advertising manager controls the entire promotions operation, including budgeting, coordinating creation and production of ads, planning media schedules, and monitoring and administering the sales promotions programs for all the company’s products or services.
2. Decentralized system: Popular in large corporations with multiple divisions and many different products. Consist of separate manufacturing, research and development, sales, and marketing departments for various divisions, product lines, or businesses. Assign each product or brand to a brand manager who is responsible for the total management of the brand, including planning, budgeting, sales, and profit performance. There may be additional layers of category managers above them, like in P&G.
3. In-house agencies: An in-house agency is an advertising agency that is set up, owned, and operated by the advertiser. Some in-house agencies are little more than advertising departments, but in other companies they are given a separate identity and are responsible for the expenditure of large sums of advertising dollars. E.g. Calvin Klein.
The figure below shows the advantages and disadvantages of using one of the above 3 systems of advertising organization systems:
Types of Ad agencies:
Full-service agencies - Offers the client a full range of services, including creative, account, marketing, financial and management services.
Creative boutiques - Specialize in creative services.
Media buying services - Specialize in media buying.
These agencies are typically compensated through a commission system which works somewhat similar to the depiction below:
However, increasingly marketers are using an performance incentive based compensation system for paying ad agencies.
Thanks for sharing this rich information. These marketing methods has changed the technique of discovering different products and services which is now connecting the audiences to the business owners. Nowadays, many marketing communications firms, like Vine Communications, is providing an approach to build communication platforms effectively and efficiently.
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