Advertising Management Agency 2003
Content
Advertising Management
Advertising Agency
3 main components of advertising industry
1. 2. 3.
Sponsor or advertiser Media, and The advertising agency
Meaning
1. 2. 3. 4.
Advertising agency is an independent organization Renders specialized services in advertising Operational responsibilities: Creative services Account management Research Promotional services
Functional departments of an advertising agency
1. 2. 3. 4. 5. 6. 7. 8.
Contact department Media department Copy department Art and visualization department Production department Finance department Research department Public relations department
Services rendered by advertising agency
1. 2. 3. 4.
Timely and satisfactory work Boon to small and medium sized enterprises Sound appropriation of funds Conducting market research Non ± advertising activities Selecting target customers Determining prices and discounts Designing products and packages Developing channel distribution strategies
Remuneration
1. 2.
The two popular methods for compensating advertising agencies for their services are« Commission method Fee method or system
Commission method
An agency receives an amount equal to 15% of the cost charged for media space or time as commission from media owners
Process:
1.
2.
3.
The media bills the agency for the rate less than 15% The agency in turn bills the advertiser for the full rate charged by the media before deducting the commission The difference amount is the agency's income for services rendered
Example
Rs 20,000(paid)
Rs 17,000
Agency
Rs 17,000
Media
Advertiser
Rs 20,000 (bill) Commission for agency = Rs 3,000 ( 15% of 20,000)
Fee system
The agency payment consist exclusively of service fees Computed on basis of cost plus system A certain fixed percentage on cost may be charged as fee to be paid to agency along with the bill
Advertising Agency
3 main components of advertising industry
1. 2. 3.
Sponsor or advertiser Media, and The advertising agency
Meaning
1. 2. 3. 4.
Advertising agency is an independent organization Renders specialized services in advertising Operational responsibilities: Creative services Account management Research Promotional services
Functional departments of an advertising agency
1. 2. 3. 4. 5. 6. 7. 8.
Contact department Media department Copy department Art and visualization department Production department Finance department Research department Public relations department
Services rendered by advertising agency
1. 2. 3. 4.
Timely and satisfactory work Boon to small and medium sized enterprises Sound appropriation of funds Conducting market research Non ± advertising activities Selecting target customers Determining prices and discounts Designing products and packages Developing channel distribution strategies
Remuneration
1. 2.
The two popular methods for compensating advertising agencies for their services are« Commission method Fee method or system
Commission method
An agency receives an amount equal to 15% of the cost charged for media space or time as commission from media owners
Process:
1.
2.
3.
The media bills the agency for the rate less than 15% The agency in turn bills the advertiser for the full rate charged by the media before deducting the commission The difference amount is the agency's income for services rendered
Example
Rs 20,000(paid)
Rs 17,000
Agency
Rs 17,000
Media
Advertiser
Rs 20,000 (bill) Commission for agency = Rs 3,000 ( 15% of 20,000)
Fee system
The agency payment consist exclusively of service fees Computed on basis of cost plus system A certain fixed percentage on cost may be charged as fee to be paid to agency along with the bill
