Advertising Unit 1 Study Guide

Account Planner

An agency professional who bridges traditional research, account management, and creative direction. The account planner represents the consumer's perspective to help define and plan the client's advertising program.

Account Planner — Main Role

To represent the view of the consumer when developing an advertising program.

Account Planner — What does it connect?

Traditional research, account management, and creative direction.

How do advertising agencies make money?

Media commissions and the straight-fee/retainer method.

Media Commission

Compensation paid by a medium to a recognized advertising agency for advertising placed with that medium.

Traditional Media Commission

Traditionally, the media commission was 15%.

Why was the media commission traditionally 15%?

The tradition began when advertising agencies first served as ad-space brokers for newspapers.

Ad-Space Broker

An agency that historically acted as a middleman between advertisers and newspapers by helping sell/place advertising space.

Straight-Fee (Retainer) Method

A method of agency compensation in which the agency receives a straight fee or retainer based on the agency's time spent servicing the client.

Media Commission vs. Straight Fee

With a media commission, the medium compensates the agency for advertising placed. With a straight fee/retainer, the client compensates the agency based on the agency's time spent servicing the client.

How do agencies get new clients?

The three most successful ways are referrals, presentations (pitches), and relationships.

Referrals

One of the three most successful ways agencies get new business; existing contacts or clients recommend the agency to potential clients.

Presentations (Pitches)

One of the three most successful ways agencies get new business; agencies present their ideas and capabilities to potential clients.

Relationships

One of the three most successful ways agencies get new business; agencies develop and maintain professional relationships that can lead to new clients.

Networking

A way agencies develop new business by building professional contacts and connections.

Community Relations

A way agencies build contacts and develop relationships within their communities, which can lead to new business.

Pro Bono Work

Working for charities or nonprofit organizations without charging the normal fee. Agencies can use this work to make new contacts and build relationships.

Why do agencies work pro bono for nonprofits?

To make new contacts, build relationships, and potentially develop future business opportunities.

Lesser-Known Agencies

Agencies that are less established or less well-known and therefore need to be more aggressive in pursuing new business.

How can lesser-known agencies get new business?

They can advertise themselves, write letters, make cold calls, follow up on leads, network, work pro bono, and submit their best ads to competitions.

Soliciting and Advertising for New Business

A strategy agencies use to actively seek new clients through advertising, letters, cold calls, and following up on leads.

Cold Calls

Contacting potential clients who have not previously expressed interest in the agency in order to pursue new business.

Following Up on Leads

Contacting people or organizations who may have shown interest or could potentially become clients.

Advertising for New Business

An agency can advertise itself to increase awareness and attract potential clients.

Advertising Competitions

Agencies can submit their best advertisements to competitions to potentially win awards and gain publicity.

Why do agencies enter advertising competitions?

To win awards and gain publicity, which can increase the agency's reputation and help attract new business.

Three Most Successful Ways Agencies Get New Business

Referrals, presentations (pitches), and relationships.

Historical Origin of Media Commission

Advertising agencies originally acted as ad-space brokers for newspapers.

Big Picture: Account Planner

The account planner makes sure the consumer's perspective is represented in the agency's advertising strategy.

Big Picture: Agency Compensation

Agencies can earn money through media commissions or through a straight-fee/retainer arrangement.

Big Picture: Getting Clients

Agencies primarily gain new business through referrals, pitches/presentations, and relationships.

Big Picture: Lesser-Known Agencies

Lesser-known agencies need to be more aggressive about pursuing new business through networking, community relations, self-promotion, cold calls, lead follow-up, and advertising competitions.