Advertising Decision-Making Process

P Ammani*

The world is profoundly changing in the way products and services are valued, communicated, bought and delivered. Strong brands elicit loyalty and enhance market share for the firm. This could be achieved by creating interest for the product and developing the relevance and emotional connection of the product with consumers through advertising. Advertising is an incredibly important communication tool in the hands of firms. A commercial can encapsulate a brand in a very powerful way. Hence, designing an effective advertisement and offering it through the right media is a challenge faced by the advertisers. In order to make a successful campaign, advertisers seek professional help from agencies. In the light of this, a study has been conducted to understand the decision making process of advertisers and the criteria they consider in choosing an advertising agency.

Introduction
Advertising is fascinating and provocative. Advertising creates customer awareness of the product and builds positive psychological associations that can enhance the buyer satisfaction. Consumers interest is provoked and sustained in the product. The purpose of advertising is to make potential buyers respond more favorably to the firms offering. Advertising provides information to customers, creates and modifies their desires and provides reasons for preferring a particular product. Captivating and persuasive advertisements create wants through passive compulsion, which makes the consumers to buy the product. Advertising creates demand, and thereby, accelerates the growth in the gross domestic product. It also helps society by improving competition, lowering prices, encouraging more product choices, supporting the media and providing information. Advertising seems to go beyond merely selling products or ideas and can shape social trends and attitudes in powerful ways. However, advertising has been accused of harming society on the ground that it creates an unnecessary hype for the products and also manifests wants for superfluous products and services (Ammani, 2008).
* Professor, The I cfai School of Marketing Studies (I SMS), Hyderabad, I ndia. E-mail: [email protected]

0 2009 The Icfai University Press. Journal of Management Research, Vol. VIII, No. 6, 2009 6 The Icfaian All Rights Reserved.

The major decisions called for in advertising are: how much should be spent for overall company advertising; what message and mode of presentation should be used; what media should be used; how should advertising be phased during the year; whether the firm should go for outside advertising agency; and what are the best methods for knowing what advertising company is accomplishing. Advertising costs depend on creative development time and production elements, such as production quality, multiple size requirements, publication insertions, photography and illustrations. Well-defined objectives, clear input, communication, planning and scheduling the campaign are essential to control costs and accomplishing the tasks on time.

Review of Literature
Alyque Padamsee says, I fear that the sun has set on the fun, thereby implying that the current trend is that the clients are demanding hard-selling advertising. This has snapped the lid down on fantasy (Aresh, 1998). Some client firms ask the agencies to commit their resources and loyalty to the firm for a certain period. Bovee and Arens (1992) question whether it is ethical to ask an agency to commit all its resources and loyalty to a single account, particularly when a client spreads its business among a number of advertising agencies. According to Bovee and Arens (1989), the account executive is responsible for mustering all the agencys services for the benefit of the client on one hand, and on the other, for representing the agencys point of view to the client, the account executive is often caught in the middle. Bograt (1984) says that, in a competitive economy, the success of a company often hinges on its ability to master the strategy of advertising. And the mastery, in turn, depends on the companys ability to assemble and apply information. Davies (1994) applied the Analytic Hierarchical Process (AHP) to decide the relative weights of advertising agency selection criterion in the final stage, but did not state clearly how the short listing was determined. Oglivy (1983) puts a premium on the talents of an ad agency to innovate or originate a novel way to sell a product. An advertising agency is primarily rated on the basis of its capabilities for creativity. There is ample evidence that the century long domination in marketing communications by mass media advertising is coming to an end; marketing budgets are being shifted away from traditional advertising to behavior-oriented disciplines, like consumer promotions, direct marketing and direct response advertising. Retailers are gaining strength over manufacturers. New media technologies are increasing the fragmentation of media usage. Prime time television, the main channel for mass campaigns, has had its audience diminish according to a survey conducted by Gronstedt and Thorson (1996) in the US.
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Purpose and Significance of the Study

The purpose of the study is to understand and describe the decision-making process of todays advertisers in the context of advertising objectives, expenditure, budget, types of appeals, media choice, choice of an agency and client-agency relationships. It is hoped that the study would contribute to knowledge in the sphere of advertising.

Objectives
The main objectives of the study are: To delineate the process of advertising in terms of decisions that are to be taken by the advertisers; To investigate and report on the advertisers choice; and To shortlist the significant factors for selecting an advertising agency.

Research Design
The nature of the study was exploratory, descriptive and analytical. Interactions with eminent academicians and advertisers have given an idea about the attributes to be considered in understanding the elements of decision making process of advertisers.

Sample Selection and Size

The sample advertisers were selected from Hyderabad and Secunderabad through convenience random sampling process. The structured questionnaires were administered with a specific purpose of identifying the decision making process of advertisers and prove the importance of selection of an ideal advertising agency. The questionnaires were sent to 75 advertisers, of whom 58 responded.

Advertising Objectives
The advertisers decision making process begins with contemplating the objectives of advertising. The objectives of advertising vary from company to company. They are expressed in terms of communication goals. Most of the advertising seeks to inform, persuade, and remind its target audience about the offering of the organization. Building a companys brand image is one of the major objectives of the advertisers. Advertising informs the potential customer about a new product or a new use of technology. Persuasion changes or reinforces an attitude or behavior in one form or another. The message is sought to be reinformed in the customers minds by repeated release of the same advertisement. Advertising builds a positive image of the company that sells the product. The task of advertising, according to Ogilvy, is to give, a brand a first-class ticket through life.
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The objectives of companies differ based on the purpose for which they wish to use the advertising. At one extreme, the purpose of advertising is to induce direct action, and on the other, is to influence the attitudes of the consumers. Advertising could be used to encourage information search by the potential customers to relate a product to their needs and to encourage recall of rewarding experiences. The data has been gathered to find out the objectives for which companies advertise (Table 1). Table 1: Advertising Objectives of Advertisers
Objectives To Inform To Persuade and Remind To Build the Companys Image No. of Respondents 25 6 27 Percentage 43.10 10.34 46.55

As given in Table 1, 46.55% of the advertisers sought advertising to build their companys image and 43.10% of the advertisers wanted to inform. To persuade and remind, happens to be the least choice with 10.34%. This trend may be due to the fragmented market and increased competition. This could be interpreted as: the advertisers believe that the sales of their products depend on knowledge of the product and the corporate goodwill, rather than on aggressive persuasion.

Methods to Determine Advertising Expenditure

There are no scientific methods which can be employed in appropriation of advertising fund. However, there are a few approaches, which usually, many companies follow in determining the amount of advertising fund to be spent during the year. The approaches that companies usually consider are percentage of sales method, competitive method or objective and task method or the approach chosen would be based on the need of the hour. Percentage of sales method is a ratio related to revenue. It is the percentage of the previous years sales or estimated sales for the following year or it could be combination of the two. Generally, an industry norm is used as a percentage figure. In another method, advertising budget is framed at par with that of the competitors. A company spends as much as its competitors spend. The assumption behind this is that the collective thinking of various firms in the industry cannot be too far from the optimal figure. Advertising objective-and-task method is a logical method, where the advertising budget is based on establishing advertising objectives and the tasks to be accomplished, and then determining the required size of the budget. The respondents are asked to give the method they usually choose in determining the advertising expenditure (Table 2). From Table 2, it can be seen that 20.68% of the respondents adopt percentage of sales method and an equal number of respondents prefer the competitive

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Table 2: Advertising Expenditure Methods

Methods Percentage of Sales Method Competitive Need-Based Method Objective Task Method No. of Respondents 12 12 23 11 Percentage 20.68 20.68 39.66 18.97

method. However, the majority of the respondents (39.66%) go in for objective task method, while 18.97% of them choose any one of the methods depending on the need of the hour.

Basis for Deciding Advertising Budget

In setting the total budget as well as determining the allocation of expenditure within the budget, certain factors are taken into consideration. Some of the factors that are usually considered are the stage in the Product Life Cycle (PLC), market share and consumer base, competition, and clutter and advertising frequency. The different stages in the PLC determine the amount to be spent on advertising, products that are newly introduced into the market are heavily advertised, compared to those that are already established in the market. Much of advertising depends on the strategy of the competitors. If the competitors are advertising heavily, a higher amount would have to be allocated to neutralize their edge in the market to retain market share. Advertising is also done to increase the market share and consumer-base. The advertising budget is also determined based on the average number of times different households or individuals are reached by a medium in a given period of time. Table 3 presents the views of the respondents on the subject. Table 3: Bases for Determining Advertising Budget
Basis Stages in PLC Market Share and Consumer Base Competition and Clutter Advertisement Need-Based Frequency No. of Respondents 13 14 5 5 21 Percentage 22.41 24.14 8.62 8.62 36.21

Contrary to the belief that basis for deciding advertising budget is competition and clutter, 24.14% of the respondents said that market share and consumerbase are the bases for determining advertising budget. This is closely followed by 22.41% of the respondents determining their budget on the basis of stages in PLC. Competition and clutter and advertising frequency each with 8.62% are
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far lower. Majority of the respondents (36.21%) opted for need-based, which means they are indifferent to different bases.

Types of Appeals
Advertising appeals are created for the purpose of activating human needs and wants, and showing how the advertised brand can satisfy those needs and wants. The advertiser has to determine the needs at which the advertising message should be directed. The advertising message should appeal directly or indirectly to those key needs which influence behavior response. The different types of appeals usually adopted by the advertisers are rational, sensory, social and ego satisfaction. Rational appeals are based on logic and aim at selling the products based on objective considerations like performance, features or problem solving capacity. They are directed at the thinking process of the audience. The appeals that are aimed at the five senses are sensory appeals. Social appeals cater to the need of belongingness. Man is a social creature. He seeks the company of others to gain some impersonal reward and wants to be a part of national stream. Ego appeals refer to the personality traits of the consumer, their physical appearance, sense of humor, intelligence, beauty and status. The advertisers are asked to which kind of appeals they usually go for. Their responses are summarized in Table 4. Table 4: Types of Appeals
Types of Appeal Rational Sensory Social Ego Satisfaction No. of Respondents 34 21 2 1 Percentage 58.60 36.20 0.03 0.02

A majority of 58.6% of the respondents said that the appeals are rational, whereas 36.2% of them go for sensory appeals according to the survey. Social and ego satisfaction appeals are not preferred, with only 0.03% of them going in for the former and 0.02% for the latter.

Media Choice
Media is required to transmit the message about a product or service to its targeted customers. In the process of transmission, the advertiser tries out different kinds of media, such as print, television, radio, outdoor, direct mail, point of purchase, the Internet and mobile phones to attract its customers. Effective advertising refers to informing the public about the right product at the right time through the right medium. Therefore, right media selection is the key for the
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success of the entire advertising campaign. In order to get the most out of the amount spent on advertising, it should be directed to the right audience and this could be achieved through media. To identify which media is preferred by the respondents, they are asked to rank different media according to their preference. The responses are presented in Table 5. Table 5: Media Choice Percentage of Respondents
Media Print TV Outdoor Radio Internet Direct Mail Phone Total Rank 1 43 46 8 2 1 0 0 100 Rank 2 52 48 0 0 0 0 0 100 Rank 3 5 0 43 0 15 37 0 100 Rank 4 0 0 40 0 45 0 15 100 Rank 5 0 6 9 0 39 0 46 100 Rank 6 0 0 0 98 0 2 0 100 Rank 7 0 0 0 0 0 61 39 100

According to the survey, television happened to be the most preferred media among the respondents, with 46% of them giving rank one, followed by print media at 43%. Outdoor, radio and internet advertising are preferred by a small number of respondents, with 8%, 2% and 1% respectively. Direct mails and telephones are the least sought out media for advertising. There is a greater preference for television, because it is an extremely creative and flexible medium. Virtually, any product or service message can be effectively communicated to the audience. With its mix of color, audio and motion, its impact on the customer is immense. Print media is also preferred by the respondents, since there is no literate household where the day does not begin with a newspaper. Radio has lost its charm and importance after the advent of televisionan audio visual medium. Therefore, it is the least preferred medium by the advertisers compared to TV and print. However, with the introduction of FM radio, for which a large number of consumers have an ear, this medium is likely to regain its importance. Outdoor advertising in India is chiefly utilized by sellers of consumer goods, government, social and charitable organizations, hospitals, commercial houses and newspapers. Internet advertising could appeal only to a small audience, who are computer savvy and those who go for e-shopping. As the reach of the Internet is low, internet advertising is not much preferred. Thus, it has been seen that television and print media lead the way, followed by outdoor advertising, radio and the Internet.
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Choice of Outside Advertising Agency

The advertiser has two clear options. The first is that the entire work of advertisingplanning, creativity, art and copy writing, media selection and buying will be undertaken by the in-house advertising cell of the advertiser. The second option entrusts the entire advertising work to an outside advertising agency. Table 6 gives the preference of advertisers in this regard. Table 6: Choice of Outside Advertising Agency
Advertising Yes No Agency No. of Respondents 35 23 Percent 60 40

It has been observed that majority of the respondents (60%) approach the advertising agencies. Although many advertisers opt to hire outside advertising agencies, a lesser number of firms prefer an in-house advertising cell, for reasons of control, responsiveness and saving time and cost.

In-House Advertising Options

Advertisers advertising through their in-house cell have again a number of options. At one extreme, the in-house cell undertakes the complete advertisement work from planning to buying to attract its customers. Advertisers may develop their own copy and just buy media slots. Another extreme situation is advertising manager buys and coordinates from free-lancers, copy writers, artists, and media planning and buying. Table 7 presents the in-house advertising options. Table 7: In-House Advertising Options
Options Complete Task No. of Respondents 13 7 3 Percent 56.50 30.04 13.00

Mostly from Free-Lancers Buying Media Slots and Planning

It is seen from Table 7 that 56.5% of the respondents make their advertisements completely in-house, 30.4% of them simply coordinate with free-lancers for their advertisements. In the case of 13% of them, the in-house cell does all the work excepting media planning and buying.

Client-Agency Relationship
With the advertising budgets growing fabulously and the competition among the advertising agencies soaring, the clients have become more demanding and expecting state-of-the-art services. On the other hand, advertising agencies are striving to provide excellent services to give value to the clients moneys worth by employing the best creative teams. Consequently, client-agency relationship
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is even more prone to stress and strain than ever before. The relationship ranges from very strong warm relationship to very poor bickering relationship. The nature of relationship of the sample firms with their agencies is presented in Table 8. Table 8: Client-Agency Relationship
Nature of Relationship Very Strong Strong Moderate Poor Very Poor No. of Respondents 20 4 11 0 0 Percent 57.2 11.4 31.4 0 0

Majority of the respondents (57.2%) have a very strong relationship, followed by 31.4% having moderate relationship and the remaining 11.4% have strong relationship. There are no firms with poor relationship. It is obvious that firms which could not maintain good relationship, dispense with the service of such advertising agencies.

Criteria for Selecting Advertising Agency

Since the promotional process determines the success or failure of the marketing and sales of the product/services, the choice of the right advertising agency is of great significance. A wrong choice of the advertising agency is not only dearer but also costs heavily in terms of time and missed opportunities. Advertising firms are deliberative and screen and select the right agency on the bases of rigorous selection criteria. The selection criteria include capability for creativity and simplicity to a host of other factors, such as the agencies track record, size and image, etc. Table 9 shows the relative importance given to each of the sought out attributes of the advertising agency. From Table 9, it is seen that creativity, innovative ideas to attract

customers topped the list with an average rating of 4. The ability to present the advertisement also goes a long way in the success of an advertisement. This is evident from the equal rating of 4 given to the criterion, ability to present. These are closely followed by track records, image of the agency, personal working in the agency and cost effectiveness, worth with a rating of 3.8. Thus, it can be said that these factors are also equally important in selection of an agency. Simplicity, which is the secret of creativity, is given a rating of 3.3, branding and positioning skills are each given a rating of 3. Personal equation is also moderately considered. However, all other factors, like size of the agency and accounts gained and lost, are not given much importance.

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Table 9: Selection Criteria

Attribute Creativity Simplicity Track Record Average 4.0 3.3 3.8 1.8 2.6 4.0 2.4 3.8 3.8 3.4 3.0 3.8 2.8 3.0 Rating

Accounts Gained and Lost Personal Equation Skills

Presentation

Size of the Agency Image Personnel Working in Agency Mutual Understanding

No. of Awards Cost Effectiveness Management

Accounts

Branding and Positioning Skills

As revealed by the results, advertisers bank on creative capabilities of the advertising agency in producing an advertisement of excellence. Qualitative features are stressed upon more than quantitative aspects. The responses given by 35 respondents for 14 attributes that are mentioned in Table 9 have been further analyzed by factor analysis to reduce the number of variables in the research problem to smaller and more manageable numbers by combining related ones into factors.

Factor Analysis
The output of the factor analysis is obtained by performing principal component analysis and specifying the rotation. There are two stages in factor analysis, wherein the objective is to identify how many factors are to be extracted from the data. As evident from Table 9b, we find that six factors extracted together account for 74.2% of total variance (information contained in the original 14 variables, Table 9a). Hence, the number of variables are reduced from 14 to 6 underlying factors. Looking at Table 9d, the attributes mutual understanding and number of awards have loadings of 0.881 and 0.838 on component 1. This suggests that factor 1 is a combination of these factors. Table 9c also suggests the same grouping. This component can be termed as credibility.
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Table 9a: Communalities

Attributes Creativity Simplicity Track Record Initial 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Analysis.

Extraction 0.821 0.509 0.697 0.699 0.631 0.837 0.774 0.901 0.676 0.805 0.747 0.771 0.764 0.755

Accounts Gained and Lost Personal Equation Skills

Presentation

Size of the Agency Image Personal Working in the Agency Mutual Understanding

No. of Awards Cost Effectiveness Management

Accounts

Branding and Positioning Skills

Note: Extraction Method: Principal Component

Table 9b: Total Variance Explained

Initial Component 1 2 3 4 5 6 7 8 9 10 Total 2.364 2.063 2.001 1.637 1.272 1.051 0.717 0.710 0.642 0.538 Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

% of Cumula% of Cumula% of CumulaTotal Total Variance tive % Variance tive % Variance tive % 16.884 14.736 14.292 11.695 9.086 7.510 5.120 5.073 4.587 3.843 16.884 31.620 45.912 57.607 66.694 74.204 79.324 84.396 88.984 92.826 2.364 2.063 2.001 1.637 1.272 1.051 16.884 14.736 14.292 11.695 9.086 7.510 16.884 31.620 45.912 57.607 66.694 74.204 2.256 2.021 1.840 1.525 1.501 1.247 16.111 14.436 13.140 10.895 10.718 8.904 16.111 30.547 43.687 54.581 65.300 74.204 (Cont.)

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Table 9b: Total Variance Explained

Initial Component 11 12 13 14 Total 0.461 0.281 0.167 0.096 Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

% of Cumula% of Cumula% of CumulaTotal Total Variance tive % Variance tive % Variance tive % 3.292 2.005 1.194 96.118 98.124 99.317
Analysis.

0.683 100.000

Note: Extraction Method:

Principal Component

Table 9c: Component Matrixa

Component 1 VAR00001 VAR00002 VAR00003 VAR00004 VAR00005 VAR00006 VAR00007 VAR00008 VAR00009 VAR00010 VAR00011 VAR00012 VAR00013 VAR00014 0.161 0.494 0.168 0.053 0.373 0.263 0.148 0.181 0.609 0.865 0.788 0.237 0.021 0.068 2 0.370 0.169 0.717 0.691 0.072 0.264 0.549 0.168 0.151 0.151 0.216 0.469 0.420 0.112 3 0.740 0.135 0.370 0.388 0.164 0.409 0.205 0.304 0.017 0.004 0.076 0.571 0.611 0.336 4 0.002 0.314 0.128 0.231 0.580 0.324 0.516 0.591 0.461 0.182 0.094 0.340 0.027 0.202
a

5 0.154 0.340 0.046 0.119 0.076 0.569 0.371 0.590 0.263 0.018 0.087 0.232 0.135 0.391

6 0.295 0.069 0.008 0.015 0.343 0.319 0.068 0.225 0.016 0.028 0.239 0.019 0.441 0.657

Note: Extraction Method: Principal Component Analysis;

6 components extracted.

Table 9d: Rotated Component Matrixa

Component 1 VAR00001 VAR00002 0.048 0.416 2 0.753 0.059 3 0.478 0.199 4 0.136 0.413 5 0.007 0.102 6 0.069 0.336 (Cont.)
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Table 9d: Rotated Component Matrixa

Component 1 VAR00003 VAR00004 VAR00005 VAR00006 VAR00007 VAR00008 VAR00009 VAR00010 VAR00011 VAR00012 VAR00013 VAR00014 0.033 0.032 0.099 0.000 0.140 0.105 0.724 0.881 0.838 0.170 0.062 0.034 2 0.819 0.811 0.043 0.005 0.245 0.081 0.049 0.035 0.028 0.163 0.051 0.141 3 0.125 0.124 0.038 0.219 0.428 0.232 0.060 0.021 0.007 0.750 0.829 0.017 4 0.039 0.156 0.601 0.873 0.248 0.164 0.213 0.150 0.081 0.000 0.141 0.066 5 0.009 0.024 0.468 0.163 0.668 0.887 0.050 0.018 0.053 0.057 0.030 0.011 6 0.090 0.008 0.194 0.008 0.060 0.125 0.312 0.063 0.185 0.388 0.220 0.854

Note: Extraction Method: Principal Component Analysis; Normalization;

a

Rotation Method: Varimax with Kaiser

Rotation converged in 7 iterations.

Factor 2 is a combination of track record, accounts gained and lost, with loadings of 0.819 and 0.811 respectively. Table 9c also suggests the same combination. This factor is termed as performance. As for factor 3, it is evident that cost-effectiveness and accounts management have the highest loading of 0.75 and 0.829, respectively and it is also reflected in Table 9d. This factor consisting of above two variables can be termed as efficiency. Factor 4 consists of the attributes personal equation and ability to present with the highest loadings of 0.601 and 0.873. This factor could be termed as relationship. Factor 5 consists of the attribute size of the agency with a loading of 0.668 and the factor is termed as size. Factor 6 consists of the attribute branding and positioning skills with a loading of 0.854 and the factor is termed brand. Thus, it can be said that the significant factors of analysis for choosing an advertising agency are creativity, performance, efficiency, relationship, size and brand.

Tenure of Client-Agency Relationship

Advertisers leave one advertising agency and switch over to the other due to several reasons. The average tenure for a client-agency relationship is 9-10 years
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in India. Hence, a question has been posed to the respondents on how often they change the agency. The results are shown in Table 10. Table 10: Tenure of Client-Agency Relationship
Tenure 0-5 years (Frequently) 5-10 years (Sometimes) 10-15 years (Rarely) Never Change No. of Respondents 7 18 10 0 Percentage 20.0 51.5 28.5 0.0

It can be seen from Table 10 that 80% of the advertisers either change their agencies sometimes or rarely. More than half of the respondents (51.5%) said that they change the agencies once in 5-10 years; 28.5% of them said they rarely change their agencies and 20% change their agencies frequently. This could be because the switching costs are quiet high. The table also shows that it is a myth that the organizations never change their advertising agencies, as it shows 0% against the column.

Reasons for Changing the Agency

There are various reasons for the client switching over to the other agencies. Some of the common reasons are: The agency might have been acquired by international alignments, management and staff changes; product conflicts because of mergers and take-over of new product interactions; brand failure or differing perceptions of agency and the advertiser about an advertising strategy. Table 11 summarizes the relative importance of reasons for the change of agency. Table 11: Reasons for Changing the Agency
Cause for Change of an Agency International Management Product Alignments Changes No. of Respondents 02 28 02 0 03 Percentage 5.7 80.0 5.7 0.0 8.6

Conflicts

Disenchantment with Each Other Brand Failure

A overwhelming majority 80% of the sample firms changed their agency due to the management changes in the agencies. From this, it could be concluded that advertisers go to an agency not just by its name or size, but the people working in it. 8.6% of the respondents changed their agency due to brand failure and meager 5.7% of the respondents due to international alignment and product conflicts. It means, by and large client-agency relationship is cordial.
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Relative Importance of Key Factors in Agency Selection

The advertisers are asked to compare the five key factors in selecting an advertising agency based on their preference level of one factor over the other. Table 12 presents a pair-wise comparison of different factors. The numbers in each cell represent the percentage of respondents who prefer the factor given in the row to that of the factor given in the column. Table 12: Pair-Wise Comparison Matrix of Key Factors
Key Factors Strategic Planning Strategic Planning 85.7 100.0 42.8 42.8 Media Ability 14.3 100.0 42.8 85.7 Creativity 0 0 0 0 Service Level 57.1 57.1 100.0 71.4 Cost Consciousness 57.1 14.3 100.0 28.6

Media Ability Creativity Service Cost Level

Consciousness

With 100% respondents preferring creativity over all the factors, it could be said that creativity is most expected from the agency. 85.7% of the respondents preferred media ability over strategic planning, 57.1% preferred it over service level and 14.3% over cost consciousness. Strategic planning is more important than service level and cost consciousness to 57.1% of the respondents. Service level over strategic planning and media ability is preferred by 42.8% of the respondents. An overwhelming 85.7% of the respondents are price sensitive as compared to media ability and 71.4% to that of service level. Thus, though all the key factors are essential, creativity is considered to be the very essence of advertising.

Sub-Factors of Key Factors of Selection

The key factors which are discussed in the above paragraphs have been sub-categorized, so as to have a clear idea about which sub-key factor is most preferred by the advertisers. Table 13 presents the ratings given to different sub-criterion by the respondents. The respondents have rated them on a 5 point Likert scale, where 5 represents the highest significance and 1 the least significance. The creative work that sells under the criterion creativity is the most significant, compared to any other factor. Business understanding, media planning and media buying are given an equal importance with a rating of 4.5 each. The next two important factors are holistic planning and market research. Advertising awards is the least significant factor to the advertisers.
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Table 13: Rating of Sub-Key Factors

Key Factors Planning Sub-Key Factors Average 3.0 3.5 4.5 4.5 4.5 5.0 1.0 Rating

Strategic

a. Market research b. Holistic planning c. Business understanding

Media Ability

a. Media planning b. Media buying

Creativity

a. Creative work that sells b. Advertising awards

Generation of New Ideas and Concepts

Advertising agencies are hired for their creativity in generating new ideas and concepts. How far this capability is demonstrated by the advertising agencies has been enquired into. In order to know how frequently the new ideas and concepts provided by the agencies are, the respondents are asked to select the most suitable alternative according to their view (Table 14). Table 14: Generation of New Ideas and Concepts
Frequency Always Most of the Times Sometimes Rarely Never No. of Respondents 0 14 14 7 0 Percentage 0 40 40 20 0

Forty percent of the advertisers said that advertising agencies provided new ideas most of the time. An equal number of respondents felt that they are provided new ideas sometimes. Only 20% of the respondents felt that they are rarely provided with new ideas. This shows that most of the times agencies support the advertisers by providing them innovative ideas and concepts, and thus, fulfilling the purpose for which they are engaged.

Autonomy for the Advertising Agency

Companies are demanding more from the agencies and there is always a conflict between the client and agency regarding the autonomy or freedom given to the agency. The agencies feel that they are not given full freedom and they are working under pressure. On the other hand, advertisers feel that they are giving a free hand to the advertising agencies. Advertisers opinions regarding the autonomy extended are given in Table 15.

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Table 15: Autonomy Given to the Agency

Extent of Autonomy Full Autonomy Moderate Partial Autonomy No. of Respondents 0 33 2 0 Percent 0 94.3 5.7 0

Autonomy

No Autonomy

Majority of the advertisers (94.3%) felt that they are giving moderate autonomy to the advertising agencies.

Choice of Single or Multiple Agencies

Some of the companies choose more than one agency. For example, they may choose one agency to make the advertisement and the other for media planning and buying slots. Table 16 presents the survey results of whether a single agency or multiple agencies are chosen. Table 16: Number of Agencies
No. of Agencies Single Multiple No. of Respondents 21 14 Percent 60 40

According to the survey, majority of the respondents (60%) prefer to go for a single agency rather than multiple agencies. This may be because they do not want to run from pillar to post and control costs and time.

Conclusion
To sum up, it can be said that the main objective of advertising agencies is to build the brand image, closely followed by the objective to inform. As far as the method to determine advertising budget is concerned, the most preferred method is objective task method, followed by percentage of sales method and competitive method. As far as the basis for determining advertising budget is concerned, equal importance is given to all the factors, i.e., determining the budget is based on the need. Most of the advertising appeals are rational or sensory. Television happens to be the most preferred media, closely followed by print media. Most of the advertisers go for advertising agencies. The relationship shared by the advertisers with agency according to their view is very strong. Creativity and media ability are rated the highest by the advertisers. Building the brand image, personal working in the agency, cost-effectiveness are some other factors which advertisers look for in an agency. Advertisers switch their agency, if at all, for reasons like, the management changes in the agency. Advertisers opine that they are provided with new ideas and concepts by their agencies most of the times and they also give autonomy to them in their sphere of work.
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This study has also some limitations. The sample being small relative to the number of advertisers and the advertising agencies in India, and also due to the contingent and situational nature of the advertising.

References
1. Ammani P (2008), Advertising Options, Ph.D. Thesis, OU, Hyderabad. 2. Aresh Shirali (1998) What do you Care?, Anniversary Report, A&M. 3. Bovee C L and Arens W F (1989), Contemporary Advertising, 3rd Edition, Richard D Irwin, Illinois. 4. Bovee C L and Arens W F (1992), Contemporary Advertising, Richard D Irwin, Illinois. 5. Bograt Leo (1984), Strategy in Advertising, pp. 19-23, Harcourt Brace Jovanovich, New York. 6. Davies M A P (1994), A Multicriteria Decision Model Application for Managing Group Decisions, The Journal of the Operational Research Society, Vol. 45, No. 11, pp. 47-58. 7. Gronstedt A and Thorson E (1996) Five Approaches to Organise an Integrated Marketing Communication Agency, Journal of Advertising Research, Vol. 36, March, pp. 48-58. 8. Ogilvy David (1983), Ogilvy on Advertising, Vintage Books.

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Advertising Decision-Making Process

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