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Chapter 02

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Piyush Seth
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125 views14 pages

Chapter 02

Uploaded by

Piyush Seth
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Chapter 2

The Structure of the Advertising


Industry:
Advertisers, Agencies, Media
Companies, and Support
Organizations

© 2009 South-Western, a part of Cengage Learning


PPT 2-1
Trends Affecting the Advertising
and Promotion Industry

 The “Undoing” of Agency Consolidation


and Globalization—or not
 Media Proliferation, Consolidation, and
“Multiplatform” Media Organizations
 Media Clutter and Fragmentation
 Consumer Control: Blogs and TiVos
 Web 2.0

PPT 2-2
Scope of the Advertising
Industry

U.S. Advertising Spending >$300 B

Worldwide Advertising
Spending >$600B

PPT 2-3
Structure of the Advertising
Industry (text Ex. 2.5)

Advertisers

Advertising and Promotion Agencies

External Facilitators

Media Organizations

Target Audience

PPT 2-4
Advertisers

Manufacturers and Service Firms


Procter & Gamble, Verizon

Trade Resellers
Sears, McDonald’s

Government
Federal, State, Local

Social/Not-for-profit Organizations
United Way, Nature Conservancy

PPT 2-5
Ad in Context Example

In
In addition
addition to
to
companies,
companies, thethe
government
government makes
makes
extensive
extensive use
use of
of
advertising.
advertising.

PPT 2-6
The Role of the Advertiser in IBP

 Describe the value that the firm’s brand provides


 Describe the brand’s position in the market
Describe the firm’s objectives for the brand in the
near-term and long-term
 Identify the target market(s) that are most likely to
respond favorable to the brand
 Identify and manage the supply chain/distribution
system that will most effectively reach the targets
 Be committed to using advertising and other
promotional tools to grow the brand
PPT 2-7
Agencies

Advertising Agencies: Promotion Agencies:


Full-Service Direct Marketing/
Creative Boutique Database
Interactive E-commerce
In-House Sales Promotion
Event Planning
Media Specialists
Design Firms
Public Relations Firms

PPT 2-8
Ad in Context Example

Advertising
Advertising agencies
agencies
make
make extensive
extensive use
use
of
of advertising
advertising to
to
acquire
acquire new
new clients.
clients.

PPT 2-9
Full Service Agency Services

 Account Services

 Marketing Research Services

 Creative and Production Services

 Media Planning and Buying Services

 Administrative Services PPT 2-10


Agency Compensation

 Commissions:
– around 15% of airtime fees—in flux
– 16 2/3 percent for outdoor media
– web media is all negotiated
 Markup Charges:
– production cost + fixed %
 Fee Systems:
– hourly rates, or by project
 Pay-for-Results:
– tightly-specified objectives
PPT 2-11
External Facilitators

 Consultants
– Creative, Media, Database

 Production Facilitators

 Software Firms
– Web tracking, fulfillment

PPT 2-12
Media Organizations

 Broadcast
– TV, radio
 Print
– Magazines, direct mail,
– Newspapers, specialty
 Interactive Media
– Internet, interactive broadcast,
– iPod, Cell Phone
 Support Media
– Outdoor, directories, sponsorship,
– Point-of-purchase, branded entertainment
 Media Conglomerates
– Time Warner, Disney, Turner

PPT 2-13
Target Audiences

 Household Consumers
 Businesses
 Professionals
 Government Organizations

PPT 2-14

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