Advertising Final

clients

the advertisers

advertising agency

an outside firm that specializes in the creation, production, and/or placement of the communications message

agency of record (AOR)

a single agency that has primary responsibility for most of the IMC services that the company or brand might require

media organizations

provide information or entertainment to subscribers, viewers, or readers

specialized marketing communication services

provide services in their area of expertise, such as direct marketing, sales promotion, public relations

collateral services

the wide range of support functions used by advertisers, agencies, media organizations, and specialized marketing communications firms

advertising manager

responsible for all promotions activities except sales, sometimes called a marketing communications (marcom) manager

centralized system

the advertising manager controls the entire promotions operation

decentralized system

separate sales and marketing departments for various divisions, product lines, or businesses

brand manager

responsible for the total management of the brand, including planning, budgeting, sales, and profit performance. part of a decentralized system

category management system

includes an additional layer of management above the brand managers to coordinate the efforts of a related group of products

in-house agency

an advertising agency that is set-up, owned, and operated by the advertiser

billings

the amount of client money agencies spend on media purchases and other equivalent activities

superagencies

large agencies that have merged with or acquired other agencies and support organizations to form large advertising organizations

full-service agency

offers its clients a full range of marketing, communications, and promotions services

account executive

responsible for understanding the advertiser’s marketing and promotions needs and interpreting them to agency personnel

account planners

individuals that gather information that is relevant to the client’s product or service and can be used in the development of the creative strategy as well as other aspects of the IMC campaign

copywriters

conceive the ideas for the ads and write the headlines, subheads, and body copy

departmental system

each of the agency functions is set up as a separate department and is called on as needed to perform its specialty and serve all of the agency’s clients

group system

individuals from each department work together in groups to service particular accounts

creative boutiques

small ad agencies that provide only creative services

media specialist companies

organizations that specialize in the buying of media, particularly for television and digital advertising

programmatic buying

the wide range of technologies that are automating the buying, placement, and optimization of advertising media

commission system

the agency receives a specified commission (usually 15%) from the media on any advertising space it purchases for its client

negotiated commission

commissions are based on a sliding scale that becomes lower as the clients’ media expenditures increase

fixed-fee method

the agency charges a basic fee for all of its services, and credits to the client any media commissions earned

fee-commission combination

the media commissions received by the agency are credited against the fee

cost-plus system

the client agrees to pay the agency a fee based on the costs of its work plus some agreed-upon profit margin (often a percentage of total costs)

incentive-based system

ties agency compensation to performance

percentage charges

a markup of various services the agency purchases from outside providers

financial audit

verifies how the agency conducts its business, including costs and expenses, the number of personnel hours charged to an account, and payments to media and outside suppliers

qualitative audit

focuses on the agency’s efforts in planning, developing, and implementing the client’s advertising programs and considers the results achieved

direct-marketing agencies

provide a variety of services including database analytics and management, direct mail, research, media services, and creative and production capabilities

sales promotion agency

develops and administers sales promotion programs

public relations firm

develops and implements programs to manage the organization’s publicity, image, and affairs with its relevant publics

digital agencies

specialize in the use of various digital marketing tools

media planning

the series of decisions involved in delivering the promotional message to the prospective purchasers and/or users of the product or brand

media objectives

specific objectives the media plan hopes to accomplish

media strategies

plans of action to achieve the media objectives

medium

the general category of available delivery systems

media vehicle

the specific carrier within a medium category

reach

a measure of the number of different audience members exposed at least once to a media vehicle in a given period of time

coverage

the potential audience that might receive the message through a vehicle

frequency

the number of times the receiver is exposed to the media vehicle in a specified period

sweeps periods

periods in February, May, July, and November used to measure TV audiences and set advertising rates

index number

percentage of users in a demographic segment divided by the percentage of the population in the same segment times 100

survey of buying power index

considers population, effective buying income, total retail sales, and other factors to chart the buying power in a major metropolitan market

brand development index (BDI)

percentage of the brand to total U.S. sales in the market divided by percentage of total U.S. population in the market times 100

category development index (CDI)

percentage of product category total sales in market divided by percentage of total U.S. population in market

waste coverage

the media coverage exceeds the target audience, also called overexposure

continuity

a continuous pattern of advertising; ie everyday, every week, every month

flighting

intermittent periods of advertising and nonadvertising

pulsing

continuity is maintained, but at certain times promotional efforts are stepped up

unduplicated reach

the total number of people exposed to an ad once from any one of multiple media vehicles it is on

duplicated reach

the number of people exposed to the same ad from multiple media vehicles

program rating

a measure of potential reach in the broadcast industry

gross ratings points (GRPs)

reach x frequency. includes waste coverage

target ratings points (TRPs)

the number of people in the primary target audience the media buy will reach, and the number of times it does. does not include waste coverage

effective reach

the percentage of a vehicle’s audience reached at each effective frequency increment

recency

the timing of ads relative to the consumer’s purchase decision

recency planning

focusing on short interval reach at minimum frequency levels as close to the purchase decision as possible

absolute cost

the actual total cost required to place the message

relative cost

the relationship between the price paid for advertising time or space and the size of the audience delivered, used to compare the cost of an ad in different media vehicles

cost per thousand (CPM)

cost of ad space (absolute cost) divided by circulation times 1,000

cost per ratings point (CPRP)

cost of commercial time divided by the program rating

daily inch rate

the cost per column inch of a newspaper

digital pricing

the process of purchasing an ad in digital media

bidding

the buyer participates in an auction to purchase placement for the ad format

programmatic

an automatic process used to bid for digital ad placement

target CPM (TCPM)

calculates CPM based on target audience, not overall audience

readers per copy

the number of people exposed to a print ad, based on the idea that more than one person may read the media vehicle

pass-along rate

the number of people who read the magazine without buying it

modular pricing

costs are based on the size of a set module such as a full, half, quarter, or eighth page

average frequency

the average number of times the target audience reached by a media schedule is exposed to the vehicle over a specified period