APR Arens Chapter 3

What are the two main organizations in advertising?

Advertisers: clients. Companies such as Honda, McDonalds, a shoe store, that pay to advertise themselves and their product

Advertising agencies: Employ specialists who assist advertisers with planning, creating, and executing IMC campaigns.

Differences between local and national advertisers:

Local: focus on location, volume, customers. Short term ads, less than $1 mil

National: focus on brand, market share, and markets. Long term campaigns, $5-10 million

What is an advertising manager

Hired for local businesses. The person who performs all the administrative, planning, budgeting, and coordinating functions. Lays out ads, write ad copy, and select the media.

The process of building and reinforcing mutually profitable relationships with employees, customers, other stakeholders, and the general public by developing and coordinating a strategic communications program that enables them to make consecutive contact with the company/brand through a variety of media.

IMC

What is co-op advertising?

The sharing of advertising costs by the manufacturer and the distributor or retailer. The manufacturer may repay 50 or 100 percent of the dealer's advertising costs or some other amount based on sales.

What are the purposes of co-op advertising?

Build the manufactures brand image

Help distributors, dealers or retailers increase sales

What is a centralized ad department?

A staff of employees, usually located at corporate headquarters, responsible for all the organization's advertising. The department is often structured by product, advertising subfunction, end user, media, or geography.

What is a decentralized system?

The establishment of advertising departments by products or brands or in various divisions, subsidiaries, countries, regions, or other categories that suit the firm's needs, which operate with a major degree of independence.

What is the difference between a centralized and decentralized system?

centralized systems emphasize control and uniformity, while decentralized systems emphasize flexibility and independence.

What is an ad agency?

An independent organization of creative people and businesspeople who specialize in developing and preparing marketing and advertising plans, advertisements, and other promotional tools.

What are creative boutiques?

Organizations of creative specialists (such as art directors, designers, and copywriters) that work for advertisers and occasionally advertising agencies to develop creative concepts, advertising messages, and specialized art. A boutique performs only the creative work.

What is media buying?

An organization that specializes in purchasing and packaging radio and television time. Provide customers a detailed analysis of the buy

An advertising agency that specializes in the creation of ads for a digital medium.

Interactive agency

Communication between the agency and clients. Responsible for managing all the agency's services for the benefit of the client and for representing the agency's point of view to the client.

Account executive

A mixed role that connects research, account management, and creative work. People in this role speak for the consumer to help shape and guide the client's advertising plan. Studies consumer needs and desires and translate what they have found into campaigns

Account planning

Where, when, and how often to place advertisements to reach the right audience most effectively. Involves choosing the best media channels (like TV, social media, radio, or print), the timing of ads, and the frequency to maximize impact while staying within budget.

Media planning

People who create the words and concepts for ads and commercials

Copywriter

Along with graphic designers and production artists, individuals who determine how the ad's verbal and visual symbols will fit together.

Art director

Head of a creative team of agency copywriters and artists who is assigned to a client's business and who is ultimately responsible for the creative product—the form the final ad takes.

Creatvie director

The department in an advertising agency that coordinates all phases of production and makes sure everything is completed before the deadline.

Traffic

What is a departmental system?

The organization of an ad agency into departments based on function: account services, creative services, marketing services, and administration.

What is a group system

The organization of an ad agency into a number of little agencies or groups, each with the various people required to meet the needs of the particular clients being served by the group.

What is the difference between a departmental and a group system?

departmental systems focus on job functions across all clients, while group systems focus on teams dedicated to individual clients.

A percentage of the advertising cost that a media company (like a TV station, magazine, or website) pays back to an advertising agency for buying space or time on behalf of a client.

Commission

An extra percentage added to the cost of a service or product to cover expenses and make a profit. Agencies use this when they buy services or materials for a client—they charge the client the original cost plus a percentage on top.

Markup

a fixed fee that a client pays an advertising agency regularly, usually monthly, to keep the agency available and provide ongoing services

Retainer

A form of compensation in which the agency shares in the client's success when a campaign attains specific, agreed-upon goals.

Incentive system

What are pros and cons of in-house agencies?

Pros: Saves money, gives more control over advertising, faster turnaround

Cons: less creative, could lead to loss of neutralness

What are the best ways to develop client agency relationships?

Strong referrals, presentations and pitches, networking, and soliciting

What are the 4 factors affecting client agency relationships? (4 c's)

Chemistry: establishing a good connection with potential clients

Communication: constant, open communication and explicit agreements on mutual contribution for mutual gain

Conduct: good performance output

Changes: client's market or policies may change, causing losses of staff or partnership

What are some examples of suppliers?

Art studios and web designers

Printers

Production houses

Research companies

Graphic designers

The use of automated technology and software to buy and place digital ads in real time, instead of manually negotiating ad space. It uses data and algorithms to target specific audiences with the right ad, at the right time, on the right platform. Marketers buy digital audiences that match the demographics provided by the marketer. The value of the audience is determined in an auction

Programmatic advertising