advertising agencies

structure & organization

what agencies do.

and how they’re organized
to do it.
7 primary services:
 complete a marketing analysis
 develop an advertising plan
 prepare a creative strategy
 create advertising executions
 develop and implement a media plan
 handle billing and payments
 integrate other marketing communications
4 functions of full-service agencies

 account management
 creative
 media planning and placement
 research
agency organization chart
Board of
Directors
[Chairman/CEO]

Pres ident
[COO]

Other Marketing Strategy Office Management

Communications Review Board [Personnel,
Services [Managment Accounting,
[PR, etc.] Committee] Legal, etc.]

Account Mgmt. Creative Research Media Dept.

Director Exec CD Director Director

Management As sociate Project As sociate

Supervis or Creative Managers Media
Director Director

Account Creative Research Media

Executive Group: As sistants Supervis or

As st. Account Copy Spvr. & Art Supervisor Media Media

Executive Copywriters & Art Directors Planner Buyer

Broadcast Print Analys ts

Production Production

Traffic
account management

 liaison between agency and client

 responsible for understanding...
 the client’s business
 the client’s marketing needs
 strategy development
 representing client point of view
within the agency
 account management
Account Mgmt.
Director
 account management
director
Management.
Supervisor
 management supervisor
Account
Supervisor  account supervisors
Account  account executives
Executive
 assistant account execs
Asst. Account Account
Executive Coordinator
 account coordinators
Traffic
 traffic
creative department
 responsibility
 the creative department is responsible
for creating and producing the print and
broadcast advertising
 strategy is key
 good creative work is always guided by a
creative strategy that sets forth goals to
be accomplished and key message
points to be relayed
 creative department
Strategy
Review
Board
 executive & group creative
Executive
directors
 creative director
Creative
Director (ECD)

Creative
Director (CD)  associate creative director
Associate
Creative
Director (ACD)
 copywriters
Creative
 art directors
Group:

Copy Spvr. & Art Supervisor

 broadcast producers
 print production managers
Copywriters & Art Directors

Broadcast Print
Production Production

Traffic
 traffic coordinators
media department

 The media department has two main

functions - planning and buying.
 The planning group handles more
strategic marketing and media issues.
 The buying group handles media
negotiations and implementation.
 media department
Media
Director  media director
Associate  associate media directors
Media
Director
 media supervisors
Media
Supervisor
 media planners Media
Plan
Media
Planner
Media
Buyer  media buyers
Analysts  media analysts
big changes in the
media department
 mega-agency media departments
have now become profit centers
 agencies have set up their media
departments as free-standing units
 many large clients now look at media
as a separate service
 research department
 interpret market environment
 gather and analyze research data.
 primary and secondary techniques
 determine consumer needs/perceptions
 understand problems
 advise how ads can meet Research
strategic goals Report
 help find solutions
 research department
Research
Director  research director
Project
Managers  research project managers

Research  research assistants

Assistants
Research
Outside  outside research Report
Research
Suppliers specialists
auxiliary agency functions

 account planning
 strategy/creative review board
 office management
 human resources
 legal services
 accounting
 recruitment
3 ways agencies make money

 commissions
 usually 15% of gross costs
 fees
 usually based on negotiated hourly rate
 incentives
 still relatively new and problematic
 usually based on performance goals
agency commissions

 media commission system

 15% media commission
 adjustable commission rates
 negotiate to match client budget
 sliding scale
 markups-production & service
 add a percentage markup to costs
 17.65% of net = 15% of gross
4 types of fee systems

 fixed fee (retainer)

 cost-plus fee
 performance fee
 hybrid fee &
commission
incentives
 in theory, a good way to work
 get paid based on how well you do, not
how much you bill
 in practice, difficult to implement
 if client makes final decision (instead of
agency), how can agency be responsible
for final results?
 results based on many factors, such as
competitive efforts, not just advertising
new business

 three primary sources

“The
build existing
critical client’s business
objective and role
of any
add andadsell
agency is gaining
new IMC services
 solicitnew
new business.”
accounts
 two ongoing problems
 “spec” work
 teams “walking” with accounts
 things to think about:

 why might you be interested in

going into the agency business?
 what might keep you from choosing
a career in the agency business?