BSSS-Institute of Advanced Studies

Study/Reading Material

Course Name: Advertising Management

Course Code: FSM – 2 Batch: 2022-24

CEOs :1. To develop knowledge related to theoretical concepts & terminologies of

Advertising Management

2. To acquire an ability of understanding Advertising Management.

3. To device knowledge related to Advertising Management

4. To apply concepts of Advertising Management & its factors which

influence Consumers & Companies

5. To evaluate the business strategies from Advertising Management

perspectives.

COs: 1. Translate the conceptual knowledge of Advertising Management into

practical understanding.

2. Student will able to identify the Advertising Management concepts and

Market dynamics

3. To create an understanding of Advertising Management and its intricacies

4. Ability to implement the Advertising Management tools &frame-works in

practical scenario.

5. Ability to evaluate and develop decisions related to Advertising domain

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COURSE CONTENTS:

UNIT – 4

Introduction

Advertising media refers to the various channels or platforms through which

advertisers communicate their messages to a target audience. These channels serve as
the means by which advertisements are delivered to consumers, with the aim of
creating awareness, generating interest, and influencing purchasing behavior. The
choice of advertising media is a critical aspect of a marketing strategy, as it determines
how effectively a message reaches and resonates with the intended audience.

Advertising Media

Advertising media is the medium through which an advertisement is delivered

to the public. It carries messages, stories or points regarding the product that is being
advertised. It is a highly informative way to reach the masses and ask them to buy the
product or avail of the service. Advertising Media plays a significant role in binding
the direct communication relationship between the seller and the buyer. With the help
of right types of advertising, there is not a single speck of doubt about the fact that
you will be able to make your brand known to people in the best way.

Advertising media is something that would refer to the different channels of

media which are used for advertising the brands or products in the best way. The
media channels help in broadcasting the advertisement about a specific subject.

The advertising media can be used to showcase the content that is promotional
and that is communicated in the best way with the help of many methods. These
methods include speech, text, videos, images, and so much more.

Types of Advertising Media

• Print Advertising
• Broadcast Advertising
• Outdoor Advertising
• Digital Advertising

Print Advertising
 One of the oldest and most popular media of advertising, print media has better
reach and can even be used for copy extensive advertisements. Print advertising
includes

• Newspaper advertisements – Newspapers have the highest reach among other

types of print advertisements. They are in the regional languages and have a
narrower reach as compared to others because of its economical price.

• Magazine advertisements – Magazines can be used for niche advertisements.

They have a higher conversion rate as the advertisements are targeted to the
right audience.
 • Fliers – Fliers are handy and have a great local reach. Fliers turn out to be very
useful for local businesses.

Different print mediums have different reach depending on their type and the
target group involved. Fliers can be used for locally targeted communications whereas
niche magazines can be used for extremely targeted communication at a larger scale.
Newspapers and other non-niche and high reach print mediums are used for above
the line communications.

Broadcast Advertising

Technological advancement has resulted in increased returns from broadcast

advertisements. Broadcast mediums include audio-visual information and
entertainment mediums like radio, television, etc. It’s one of the most effective media
for advertising as a story can be better understood if moving images and audio is used.
But this medium is one of the costliest advertising mediums too. Broadcast
advertisements can be classified into

• Television Advertisements – Television advertisements are usually focused on

brand building and creating brand awareness among prospective customers.
These involve a lot of time and monetary investments and can prove to be one
of the most beneficial advertisement investments for a business. Television
 advertisements have an edge over print advertisements as the people who can’t
read can also understand the message through audio-visual ads.

• Radio advertisements – Radio advertisements have both local and national

reach and are economical in terms of ROI. These can be in the regional language
and have a great recall value.

Outdoor Advertising

Outdoor advertising collectively refers to all media options that are displayed
outdoors like billboards, posters, bus-shelter ads, transit ads, neon sign boards and so
on, and it is the most popular form of traditional advertising.

It is commonly referred to as OOH (out- of -home) advertising as it includes

methods of advertising that are designed to reach consumers when they are out of
their homes. The most commonly known type of outdoor advertising is the billboard.
Common forms of outdoor advertising today fall into three categories:

• Billboard advertising: Most people are familiar with billboard advertising,

regardless of where they live or travel. Billboards are placed next to high-traffic
highways as well as along less-traveled roads in non-urban areas. Drivers see
them almost anywhere because they are an efficient and cost-effective means
of communicating information that is geographically important – the location
 of the closest chain fast food restaurant on the route, the nearest motel, or
campgrounds at the next exit.

• Wallscape: Wallscape advertising is a form of out of home advertising that

yields high impact results. Wallscapes can be made in many mediums, but
typically it takes the form of a painting or mural that is on the side of a building.
These wallscapes are often located near downtown shopping areas and can
appear on office buildings or parking garages..
 • Street furniture: A bit of a misnomer, “street furniture” applies not just to bus
or park benches but also to bus shelters, newsracks, and telephone kiosks,
among others.

• Transit: Ads on the sides of busses are the most common form of transit
outdoor advertising, but outdoor advertising is common in subway stations
and within subway cars, in taxis, along airport walkways, and wrapped around
vehicles – one of the newer trends.

Digital Media

Digital advertising refers to marketing through online channels, such as

websites, streaming content, and more. Digital ads span media formats, including text,
image, audio, and video. They can help you achieve a variety of business goals across
the marketing funnel, ranging from brand awareness to customer engagement, to
launching new products and driving repeat sales.

The field of digital advertising is relatively young, in comparison to traditional

channels such as magazines, billboards, and direct mail. The evolution of advertising
isn't just about what the ads look like or where they appear, but also the ways they're
built, sold, and measured. There are four core channels of digital advertising: search,
display, social, and video.

• Search advertising: Search advertising is also known as paid search, PPC,

search engine marketing, search ads, or text ads. Search ads are the text-based
ads you see on the search engine results page (SERP). They appear based on
what a user has searched and can be seen at the top of results, at the bottom,
and sometimes on the side. You can run search ads on Google or Bing, but
Google is the go-to. Search ads also include Shopping ads, as there is a
Shopping tab on Google, and Shopping ads can also appear on the regular
Search tab.

• Display advertising: Display ads, also known as banner ads, are the ads you
see on websites and apps. Unlike search ads that are text-based, these are image
based and they come in all different shapes and sizes. There are tons of
networks you can run display ads on—the Google Display Network, of course,
being one of the most popular.
• Social media advertising: Social media advertising refers to ads on popular
platforms like Facebook, Instagram, Twitter, LinkedIn, TikTok, and more. Like
display ads, they come in many formats and placements and support a range
of creative, from images and video to immersive mobile experiences. Facebook
is the most versatile platform for businesses, so that’s what we’ll be focusing
on in this guide.

• Video advertising: Social and display networks support video ads, but we’re
talking about video as a channel here rather than a format. The world of video
streaming and OTT can be complex, but what is *the* video channel? YouTube
of course. YouTube ads include both video ads that play before, after, and
during videos; as well as non-video ads that appear over videos and in search
results.
Media Planning

Media Planning, in advertising, is a series of decisions involving the delivery

of message to the targeted audience. Media Plan, is the plan that details the usage of
media in an advertising campaign including costs, running dates, markets, reach,
frequency, rationales, and strategies.

Steps in Development of Media Plan

Developing a media plan involves a strategic and systematic approach to

ensure that advertising messages reach the right audience through the most effective
channels. Here are the key steps in the development of a media plan:

• Market Analysis: Every media plan begins with the market analysis or
environmental analysis.Complete review of internal and external factors is
required to be done. At this stage media planner try to identify answers of the
following questions:
✓ Who is the target audience?
✓ What internal and external factors may influence the media plan?
✓ Where and when to focus the advertising efforts?

The target audience can be classified in terms of age, sex, income,

occupation, and other variables. The classification of target audience helps
media planner to understand the media consumption habit, and accordingly
choose the most appropriate media or media mix.

• Establishing Media Objective: Media objectives describes what you want the
media plan to accomplish. There are five key media objectives that a advertiser
or media planner has to consider - reach, frequency, continuity, cost, and
weight.
 ✓ Reach - Reach refers to the number of people that will be exposed to to
a media vehicle at least once during a given period of time.
✓ Frequency - Frequency refers to the average number of times an
individual within target audience is exposed to a media vehicle during
a given period of time.
✓ Continuity - It refers to the pattern of advertisements in a media
schedule. Continuity alternatives are as follows:
Continuous: Strategy of running campaign evenly over a period
of time.
Pulsing: Strategy of running campaign steadily over a period of
time with intermittent increase in advertising at certain intervals,
as during festivals or special occasions like Olympics or World-
Cup.
Discontinuous: Strategy of advertising heavily only at certain
intervals, and no advertising in the interim period, as in case of
seasonal products.
✓ Cost - It refers to the cost of different media
✓ Weight - Weight refers to total advertising required during a particular
period.
• Determining Media Strategies: Media strategy is determined considering the
following:
✓ Media Mix - From the wide variety of media vehicles, the advertiser can
employ one vehicle or a mix suitable vehicles.
✓ Target Market
✓ Scheduling - It shows the number of advertisements, size of
advertisements, and time on which advertisements to appear.
Seasonal Pulse: Seasonal products like cold creams follows this
scheduling.
Steady Pulse: According to this scheduling one ad is shown over
a period of time, say one ad per week or one ad per month.
Periodic Pulse: A regular pattern is followed in such scheduling,
as in case of consumer durable, and non durable.
Erratic Pulse: No regular pattern is followed in such scheduling.
Start-up Pulse: Such scheduling is followed during a new
campaign or a launch of a new product.
 Promotional Pulse: It is for short time, only for a promotional
period.
✓ Reach and frequency
✓ Creative Aspects - Creativity in ad campaigns decides the success of the
product, but to implement this creativity firm must employ a media that
supports such a strategy.
✓ Flexibility - An effective media strategy requires a degree of flexibility.
✓ Budget Considerations - In determining media strategy cost must be
estimated and budget must be considered.
✓ Media Selection - It covers two broad decisions - selection of media class,
and selection of media vehicle within media class.
• Implementation of Media Plan: The implementation of media plan requires
media buying. Media Buying refers to buying time and space in the selected
media. Following are the steps in media buying:
✓ Collection of information: Media buying requires sufficient information
regarding nature of target audience, nature of target market, etc.
✓ Selection of Media/Media Mix: Considering the collected information
and ad-budget, media or media mix is selected which suits the
requirements of both - target audience and advertiser.
✓ Negotiation: Price of media is negotiated to procure media at the lowest
possible price.
✓ Issuing Ad - copy to media: Ad-copy is issued to the media for broadcast
or telecast
✓ Monitoring performance of Media: Advertiser has to monitor whether
the telecast or broadcast of ad is done properly as decided.
✓ Payment - Finally, it is the responsibility of advertiser to make payment
of media bills on time.
• Evaluation and Follow-up: Evaluation is essential to assess the performance of
any activity. Two factors are important in evaluation of media plan:
✓ How successful were the strategies in achieving media objectives?
✓ Was the media plan successful in accomplishing advertising objective?

Media Buying

Media buying is a process used in paid marketing efforts. The goal is to identify
and purchase ad space on channels that are relevant to the target audience at the
optimal time, for the least amount of money. Media buying is a process relevant to
both traditional marketing channels (television, radio, print) and digital channels
(websites, social media, streaming). When done effectively, media buyers achieve
maximum exposure among their target market for the least amount of spend.

Media Buying Vs. Media Planning

While media buyers and media planners certainly work closely together, their
roles are very different. In short, media planning is the first step. Based on the
conclusions and strategies determined by this team, media buyers execute the media
plan – placing the agreed-upon ads on the appropriate channels.

Media Planning Media Buying

The process of media planning is With the media plan established, media
focused on establishing an audience, buyers connect with their counterparts
conducting market research, across the agreed-upon media sites.
establishing a budget, and building out These are often sales/account
goals. Media planners work with their executives, whose responsibility is to
clients to understand who the target find relevant advertisers. These two
audience is for their offering, which parties negotiate placement, time, and
channels that audience uses and at what cost. Media buyers often use the
times, and what type of messaging that following tactics to execute media plans:
audience is most likely to engage with. • Programmatic Buys: AI and
With this information, the planning team algorithm-enabled real-time
will select which channel they want to bidding on ad space that matches
purchase ad space on, and for what consumer profiles (e.g. fashion
price. designers leveraging a platform
that will automatically bid on and
place ads on fashion-oriented
channels).
• Direct Buys: When a media buyer
negotiates ad rates and run times
with a specific advertiser (e.g.,
fashion designers working
directly with the Vogue team to
place ads on their site or
magazine).
• Manual Buys: Bidding on ad
space and managing bids directly
through an ad platform such as
AdWords.

Importance of Media Buying

• Get the Best Deal: Media buyers often have a wide network of relationships,
which they can leverage to maximize the value of your investment. Media
 buying professionals are well versed in negotiation techniques and common
industry standards, such as the average cost of leads or what brand exposure
should cost. Media buyers can also help extend the benefits of an agreement.
In advertising the terms “value added” or “added value” refer to ad space or
impressions tacked on to an agreement without charge. Experienced media
buyers can negotiate prices to increase reach or frequency and can often get
value added at media channels they have worked with in the past.
• Get the Best Slots: Media buyers understand where your advertising dollars
should be spent, and which placements tend to get the most engagement.
Media buyers stay aware of trends and world events (such as the Olympics or
political campaigns) that may influence ad availability and negotiate ad
placements directly into the contract to ensure ads are delivered as promised.
• Plan Campaigns with Best Practices: Media buyers understand what strategies
will best lead to conversions (for example: placing ads at a certain time of day).
Media buyers have experience working across publishers and channels. They
bring the best practices they learned in previous campaigns and can apply them
as they negotiate ad placements for maximum returns.

Media Buying House

A media buying house, also known as a media buying agency or media agency,
is a specialized firm or entity that acts as an intermediary between advertisers and
media outlets. The primary role of a media buying house is to facilitate the purchase
of advertising space or time across various media channels on behalf of clients, such
as businesses, brands, or organizations.

Here are key functions and characteristics associated with media buying
houses:

• Negotiation and Purchase: Media buying houses negotiate and purchase

advertising space or time on behalf of their clients. This can include buying
space in newspapers, magazines, on television, radio, outdoor billboards,
digital platforms, and other relevant media channels.
• Cost Efficiency: Media buying houses aim to secure the best possible rates and
terms for their clients. They leverage their industry knowledge, relationships
with media outlets, and buying power to obtain cost-efficient advertising
opportunities.
 • Media Planning: These agencies are involved in media planning, helping
clients determine the most effective media mix based on the target audience,
campaign objectives, and budget constraints. They strategize the allocation of
advertising resources across different channels.
• Market Research: Media buying houses conduct market research to gather
information on audience demographics, media consumption habits, and
trends. This data informs their recommendations for the most suitable media
channels for a particular campaign.
• Ad Placement: Once media space is secured, media buying houses are
responsible for coordinating the placement of advertisements. This includes
determining when and where ads will appear and ensuring that creative
materials are delivered to the respective media outlets.
• Tracking and Analytics: Media buying houses implement tracking mechanisms
and analytics tools to monitor the performance of advertising campaigns. They
analyze key metrics, such as reach, frequency, impressions, and return on
investment (ROI).
• Relationships with Media Outlets: Building and maintaining strong
relationships with media outlets are crucial for media buying houses. These
relationships help in negotiating better deals, accessing exclusive
opportunities, and staying informed about industry trends.
• Adaptability: Media buying houses need to be adaptable to changes in the
media landscape, including emerging platforms and shifting consumer
behaviors. They stay updated on new advertising technologies and trends.
• Full-Service vs. Specialized: Some media buying houses offer a full range of
advertising services, including media planning, creative development, and
campaign management. Others may specialize solely in media buying.
• Client Collaboration: Effective communication and collaboration with clients
are essential. Media buying houses work closely with clients to understand
their goals, target audience, and overall marketing strategy.
• Campaign Optimization: Throughout the campaign, media buying houses
continuously assess performance data and may make adjustments to optimize
the effectiveness of the advertising strategy.

Advertising Agency
 According to American marketing Association, "An Advertising agency is an
independent business organization composed of creative and business people who
develop, prepare and place advertising in advertising media for sellers seeking to find
customers for their goods and services."

Advertising Agency is an independent business organization specialized in

advertising related work which undertakes the work of planning, preparing, and
executing advertising campaign for its clients. Advertising Agency is a body of experts
specialized in advertising. Advertising Agency performs following activities for its
clients:

• Planning: Advertising agency studies the product or services of clients to

identify the inherent qualities in relation to competitor's product or services,
analysis competition and marketing environment to formulate advertising
plan.
• Preparing: After the study of product, competition, and marketing
environment the experts of agency has to write, design, and produce the
advertisement, it is also called formulation of ad-copy.
• Executing: Now, media is selected for time or space, ad is delivered to media,
checked, verified, and released in media. After ad release payment is done to
media and client is billed for the services provided.

Functions of Advertising Agency

• Contacting Clients: Advertising agency first of all identify and contact firms
which are desirous of advertising their product or services. Ad-agency selects
those firms which are financially sound, makes quality products or services,
and have efficient management.
• Planning Advertisement: Advertising agency's next function is to plan ad for
its client. For ad planning following tasks are required to be performed by ad-
agency:
✓ Study of client’s product to identify its inherent qualities in relation to
competitor’s product.
✓ Analysis of present and potential market for the product.
✓ Study of trade and economic conditions in the market.
✓ Study of seasonal demand of the product
✓ Study of competition, and competitor’s spending on advertising.
 ✓ Knowledge of channels of distribution, their sales, operations, etc.
✓ Finally, formulation of advertising plan
• Creative Function: Creative people like - the copywriters, artists, art-directors,
graphic-specialists have to perform the creative function which is most
important part of all advertising function.
• Developing Ad-Copy: Ad-agency with the help of their writers, artists,
designers, animators, graphic-designers, and film-directors prepares and
develops Ad-copy.
• Approval of Client: Ad-copy is shown to the client for his approval
• Media Selection and scheduling: It is very important function of ad-agency to
select appropriate media for its clients. Ad-agency has to consider various
factors like- media cost, media coverage, ad-budget, nature of product, client's
needs, targeted customer, and etc while selecting media.
• Ad-Execution: After approval, verification, and required changes, the ad-copy
is handed to the media for ad-execution.
• Evaluation Function: After execution, it is the responsibility of ad-agency to
evaluate the effectiveness of ad to know how beneficial the ad is for its client.
• Marketing Function: The advertising agency also performs various marketing
function like- selecting target audience, designing products, designing
packages, determining prices, study of channel of distribution, market
research, sales promotion, publicity, etc.
• Research Function: Ad-agency performs various research functions like-
research of different media, media cost, media reach, circulation, entry of new
media, information regarding ratings, and TRP's of TV programmes, serials.
• Accounting Function: Accounting function of ad-agency includes checking
bills, making payments, cash discounts allowed by media, collection of dues
from clients, payment to staff, payment to outside professionals like- writers,
producers, models, etc.

Types of Advertising Agencies

• Full-service Agencies
✓ Large size agencies.
✓ Deals with all stages of advertisement.
✓ Different expert people for different departments.
 ✓ Starts work from gathering data and analyzing and ends on payment of
bills to the media people.
• Interactive Agencies
✓ Modernized modes of communication are used.
✓ Uses online advertisements, sending personal messages on mobile
phones, etc.
✓ The ads produced are very interactive, having very new concepts, and
very innovative.
• Creative Boutiques
✓ Very creative and innovative ads.
✓ No other function is performed other than creating actual ads.
✓ Small sized agencies with their own copywriters, directors, and creative
people.
• Media Buying Agencies
✓ Buys place for advertise and sells it to the advertisers.
✓ Sells time in which advertisement will be placed.
✓ Schedules slots at different television channels and radio stations.
✓ Finally supervises or checks whether the ad has been telecasted at opted
time and place or not.
• In-House Agencies
✓ As good as the full service agencies.
✓ Big organization prefers these type of agencies which are in built and
work only for them.
✓ These agencies work as per the requirements of the organizations

Advertising Agencies Departments

• Creative Department:
Modern advertising agencies usually form their copywriters and art
directors into creative teams. Creative teams may be permanent partnerships
or formed on a project-by-project basis. The art director and copywriter report
to a creative director, usually a creative employee with several years of
experience.
Although copywriters have the word “write” in their job title, and art
directors have the word “art”, one does not necessarily write the words and the
other draw the pictures; they both generate creative ideas to represent the
 proposition (the advertisement or campaign’s key message). Creative
departments frequently work with outside design or production studios to
develop and implement their ideas. Creative departments may employ
production artists as entry-level positions, as well as for operations and
maintenance.
• Account Service

The other major department in ad agencies is account services or account

management. Account Services or account management is somewhat the sales
arm of the advertising agency. An account executive (one who works within
the account services department) meets with the client to determine sales goals
and creative strategy.

They are then responsible for coordinating the creative, media, and
production staff behind the campaign. Throughout the creative process, they
keep in touch with the client to update them on the ad’s progress and gain
feedback. Upon completion of the creative work, it is their job to ensure the ad’s
production and placement.

• Creative Services ‘Production’

The creative services department may not be so well known, but its
employees are the people who have contacts with the suppliers of various
creative media. For example, they will be able to advise upon and negotiate
with printers if an agency is producing flyers for a client.
However, when dealing with the major media (broadcast. media,
outdoor, and the press), this work is usually outsourced to a media agency
which can advise on media planning and is normally large enough to negotiate
prices down further than a single agency or client can.
• Other Departments and Personnel
In small agencies, employees may do both creative and account service
work. Larger agencies attract people who specialize in one or the other, and
indeed include a number of people in specialized positions: production work,
Internet advertising, or research. An often forgotten, but still important,
department within an advertising agency is traffic. The traffic department
regulates the flow of work in the agency. It is typically headed by a traffic
manager (or system administrator).
 Traffic increases an agency’s efficiency and profitability through the
reduction of false job starts, inappropriate job initiation, incomplete
information sharing, over- and under-cost estimation, and the need for media
extensions. In small agencies without a dedicated traffic manager, one
employee may be responsible for managing workflow, gathering cost estimates
and answering the phone.
Advertising interns are typically university juniors and seniors who are
genuinely interested in and have an aptitude for advertising. Internships at
advertising agencies most commonly fall into one of six areas of expertise:
account services, creative, interactive, media, public relations and traffic.
An internship programme in account services usually involves
fundamental work within account management as well as offering exposure to
other facets of the agency. The primary responsibility of this position is to assist
account managers.

Advertising Agency – Selection

Advertising, if properly used, is a potent-and crucial factor in ultimate

marketing success, provided that the other ingredients of the marketing mix have
been properly planned and implemented, and keeping in view a realistic picture of
the various competitive forces.

From the existing available case histories, it is evident that, at times, one
advertising campaign out-pulls and out-performs another advertising campaign by
up to five times as much. What makes all the difference is the creativity in the concept
of the campaign and its media planning? As marketers and/or advertisers, you will
naturally expect your advertising to bring in the desired results. Since you are
investing a considerable amount of money in advertising, you will have to be careful
in selecting a good full-service advertising agency that can help you to get the most
for your advertising money. Here is a guide in this precipitous mission.

When you go round to various agencies on your selection tour, you might well
meet with either of the two hazards. These are- The wise client doesn’t want an agency
that only talks. He wants one that listens, too.

The “meet some of our people” approach is not good. So much about the
hazards. If you already have an agency, but aren’t getting enough mileage out of it,
here are some neat ways of doing so.
• Announce that your competitor’s advertising is much better than your own.
Your agency may be too tactful or too frightened to point out that you turned
down a similar scheme two years ago.
• Say sadly that you never get any good ideas out of your advertising agency. To
many people, an idea does not look like an idea until it’s been around some
time.
• Your competitor’s slogan seems much more apt after he has invested Rs. five
lakhs to remind you of it. How would your agency’s suggestions look to your
competitors after you had invested a similar sum on them?
• Tell your agency you’ve received a very good mailing shot from a rival but you
can’t let them see it because you’ve passed it on to your chairman. That will
really stir them up.
• Or mention casually that A, B & C Associates have a new scheme, of creative
sitting-rooms. This may start your agency’s creative team cantering off to ABC
Associates with their specimens. They’d just love to sit and be creative.
• Refer to your warm friendship with a director of a rival agency. That’ll set the
coffee cups ringing like castanets in their trembling hands.
• If you really want to set your agency agog, sit through their latest presentation,
and when it ends, ask expectantly, “Haven’t you anything else? I was just
getting interested”. Of course, you could jump on their layouts in muddy boots;
but it takes a colourful personality to carry this off with suitable panache.
• Insist on getting more than your money’s worth from the agency. Soon they
will be so worried about staying in business that they will cease to worry about
your advert-ising.
• Demand daily contact with the agency. The people who are willing to dance
attendance in this way are usually only suitable for the last waltz.
• Call for more contact men to be available. This often means getting several
minions to do one man’s job multi­plying the messengers doesn’t necessarily
improve the message.
• Ask for the service department heads to call and discuss matters with you.
You’ll soon be firm friends with all of them, and nobody will be getting any
service.
• When mentioning to the agency’s chairman that you tried all yesterday to
contact someone in the agency who knew about your business and could only
get the account group’s temporary typist, add that “D” Advertising Service
 handle twice the billing with half the people, and that you can always get the
head man immediately.

Advertising Agency Compensation

The revenues of advertising agencies are derived from commis-sions and fees.
It has been customary for full-service agencies to charge a commission of 15 per cent
on total billings for their services, plus reimbursement for advertising production
costs. The 15 percent commission comes from the media in which a client firm’s
advertising is placed rather than from the firm.

An advertiser is billed by its agency for the full cost of the advertising space
used in the media. Then, the media bill the agency for the full cost of space lest a
commission of 15 per cent (any early payment discount is passed back to the client).
The agency’s revenue, then, is primarily the difference between what it bills clients
and” what it pays to media.

In effect, the media are paying the agency a 15 per cent commission through a
reduction in its billing to the agency. Moreover, this 15 per cent commission must
cover most expenses of operating the agency, so that a client is actually paying for the
full-service offering.

Boutiques, on the other hand, charge, a fee, rather than a com-mission, for
services rendered. The movement toward a fee system will change the agency client
relationship to the advantage of the client, for advertisers will be better able to buy
only those services that they need from agencies.

There are two major methods of compen-sating advertising agencies-the

commission and the fee method. Under the typical commission system, an agency
receives an amount equal to 15 per cent of the cost of the media time or space. The
commission is paid by the media, which bill the agencies for the stated rate, less 15
per cent- the advertiser pays the full rate to the agency.

Thus, if an agency prepares and places an advertisement in a magazine worth

Rs. 40,000, the media will bill the agency for Rs. 34,000 (Rs. 40,000 less 15 per cent).
The agency, in turn, bills the client for the full Rs. 40,000. It is with this income of Rs.
6,000 that the agency performs its services.
 Most retailers deal directly with the local media and pay lower rates. No agency
commission is paid on these rates. If a local advertiser uses an agency, he usually pays
a fee.

Advertising Agency Appraisal

Appraising an advertising agency involves evaluating its performance,

effectiveness, and overall contribution to the success of advertising campaigns. Here
are key aspects to consider when appraising an advertising agency:

• Campaign Effectiveness: Assess the effectiveness of the agency's advertising

campaigns. Examine key performance indicators (KPIs) such as reach,
engagement, conversion rates, and return on investment (ROI). Evaluate how
well the agency's work aligns with the campaign objectives.
• Creativity and Innovation: Evaluate the agency's creativity and innovation in
developing advertising concepts and campaigns. Consider the originality of
ideas, visual appeal, and the ability to stand out in a crowded market.
• Strategic Planning: Examine the agency's strategic planning capabilities. Assess
its ability to understand client goals, target audience characteristics, and market
dynamics. A successful agency should provide strategic insights that
contribute to the overall marketing strategy.
• Media Planning and Buying: Evaluate the agency's expertise in media planning
and buying. Consider how well it selects and negotiates media placements to
reach the target audience effectively. Assess the agency's understanding of
traditional and digital media channels.
• Budget Management: Appraise the agency's ability to manage budgets
efficiently. Evaluate its cost-effectiveness in executing campaigns, ensuring
that it delivers value for the allocated budget.
• Client Communication and Collaboration: Assess the agency's communication
and collaboration with clients. Evaluate how well it understands client needs,
responds to feedback, and maintains transparency throughout the campaign
development process.
• Timeliness and Project Management: Consider the agency's ability to meet
deadlines and manage projects effectively. Timely delivery of creative
materials and adherence to project timelines are crucial for successful
campaigns.
 • Adaptability to Market Changes: Evaluate the agency's adaptability to changes
in the market and industry trends. An effective agency should stay informed
about emerging technologies, consumer behaviors, and shifts in the advertising
landscape.
• Client Satisfaction: Gather feedback from clients to gauge their satisfaction with
the agency's services. Client testimonials, reviews, and references can provide
valuable insights into the agency-client relationship and overall satisfaction.
• Industry Recognition and Awards: Consider any industry recognition or
awards the agency has received. Awards can be indicative of the agency's
excellence in creativity, innovation, and overall performance.
• Ethical Standards and Compliance: Assess the agency's adherence to ethical
standards and industry regulations. A reputable agency should operate with
integrity, transparency, and compliance with relevant advertising standards.
• Continuous Improvement: Evaluate the agency's commitment to continuous
improvement. Agencies that invest in training, technology, and staying ahead
of industry trends are more likely to deliver innovative and effective
campaigns.
• Financial Stability: Assess the financial stability of the agency. A financially
stable agency is better positioned to invest in talent, technology, and resources
needed for successful campaigns.
• Market Reputation: Consider the agency's reputation in the market. Client
referrals, positive industry reviews, and a strong market presence are
indicators of a reputable agency.

appraising an advertising agency involves a comprehensive evaluation of its creative

output, strategic capabilities, client relationships, and overall impact on campaign
success. A thorough assessment ensures that the agency is aligned with client goals
and capable of delivering effective and innovative advertising solutions.

************************************************************************************

Annexures:

Reference Books

• Batra, R., Myers, J. G., & Aaker, D. A. (2006). Advertising management.

Pearson.
 • Tyagi, C. L., & Kumar, A. (2004). Advertising management. Atlantic
Publishers & Dist.
• Rosenbaum-Elliott, R. (2020). Strategic advertising management. Oxford
University Press.

Case study Links

• Rosenbaum-Elliott, R. (2020). Strategic advertising management. Oxford

University Press.
Other links

• https://advertising.amazon.com/library/guides/what-is-digital-advertising
• https://www.yourarticlelibrary.com/advertising/advertising-agency/99756
• https://www.managementstudyguide.com/advertising-agencies.htm
• https://www.obicreative.com/media-buying-and-planning/
• https://mediatool.com/media-planning
• https://www.marketingevolution.com/marketing-essentials/media-buying

Sample Questions:

• How do you approach negotiations with media outlets to secure the best
rates and terms for advertising space or time?
• Can you provide examples of successful instances where your negotiation
skills resulted in cost-effective media buys?
• What criteria do you use to determine the most suitable media channels for
a specific campaign?
• What tools and methodologies do you use to track the performance of
media buys?
• How do you stay informed about emerging trends in media consumption
and advertising technologies, and how does this impact your media
planning?
• Can you provide examples of campaigns where the agency's work directly
contributed to achieving client objectives?