ADVERTISING AGENCIES - INTRODUCTION

The first Advertising Agency was William Taylor in 1786 followed by James “Jem” White in 1800 in London and Reynell & Son in 1812.

The History of Advertising Agencies

Originally, before the bona fide advertising agencies were born, ads were delivered to various media outlets through representatives who, in the early days of advertising, sold and re-sold advertising space with a markup. These were the humble beginnings of fully fledged advertising companies, i.e. agencies. With time, such individuals would take on more responsibilities: planning, writing, designing, and coordinating, plus an array of other services.

The first agencies date back as far as 1786 when William Taylor opened his office in London, today acknowledged as the first advertising agency in history. However, while the UK business is considered the precursor of advertising agencies in Europe, it was Volney B. Palmer who took the idea across the ocean.

Palmer opened the first agency on American soil in 1840. Adland: A Global History of Advertising cites Palmer describing the services he provided using the term “agent”: “the duly authorized agent of most of the best newspapers of all the cities and provincial towns in the United States and Canada, for which he is daily receiving advertisements and subscriptions.”

DEFINITION OF 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."

An advertising agency, often referred to as a creative agency, is a company providing services associated with creating, planning, and managing advertising campaigns, but may also handle other forms of promotion and marketing for its clients. Advertising agencies are generally independent, external companies working for their clients, which can include businesses, international corporations, non-profit organizations, and other agencies.

Traditionally, brands hired ad agencies to produce television commercials and run print campaigns in magazines, newspapers, and on billboards.

Advertising Agency performs following activities for its clients:

1. 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.

2. 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.

3. 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

Advertising agency performs following functions:

1.       Contacting Clients:

Advertising agency first of all identify and contact firms which are wanting of advertising their product or services. Ad-agency selects those firms which are financially sound, makes quality products or services, and have efficient management.

 

2.       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

 

3.       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.

 

4.       Developing Ad-Copy: Ad-agency with the help of their writers, artists, designers, animators, graphic-designers, and film-directors prepares and develops Ad-copy.

5.       Approval of Client: Ad-copy is shown to the client for his approval

6. 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 likemedia cost, media coverage, ad-budget, nature of product, client's needs, targeted customer, and etc while selecting media.

 7. Ad-Execution: After approval, verification, and required changes, the ad-copy is handed to the media for ad-execution.

8. 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.

9. 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.

10. 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.

11. Accounting Function: Accounting function of ad-agency includes checking bills, making payments, cash discounts allowed by media, collection of dues from clients, Advertising and Sales Promotion Page 29 payment to staff, payment to outside professional’s like- writers, producers, models, etc.

 

Role of Advertising Agency

The major role as advertising agency is to work alongside the clients to develop and sustain the brands that they mutually serve, through consumer understanding and insight and through creative and media delivery skills to provide best advice and the best execution thereof to those clients for the advertising of those brands.

 “A product is something that is made, in a factory: a brand is something that is bought, by a customer.A product can be quickly out-dated; a successful brand is timeless."

The role of advertising and the advertising agency is to help effect this transformation from product or service to brand by clearly positioning the offering to the consumer - its role and its benefits -

Most advertisers assign this job of informing the target audience and creating images to advertising agencies. Thus, the advertising agencies plan, prepare and place ads in the media.

 "Buildings age and become shabby. Machines wear out. People die. But what live on are the brands." Brands are much more than mere products and services. Brands, if successful, are clearly differentiated entities with which consumers can and do form a mutually beneficial relationship over time, because of the values -rational and emotional, physical and aesthetic - that consumer derive from them.

· Creating an advertise on the basis of information gathered about product

· Doing research on the company and the product and reactions of the customers.

· Planning for type of media to be used, when and where to be used, and for how much time to be used.

· Taking the feedbacks from the clients as well as the customers and then deciding the further line of action All companies can do this work by themselves. They can make ads, print or advertise them on televisions or other media places; they can manage the accounts also. Then why do they need advertising agencies? The reasons behind hiring the advertising agencies by the companies are:

· The agencies are expert in this field. They have a team of different people for different functions like copywriters, art directors, planners, etc.

· The agencies make optimum use of these people, their experience and their knowledge.

· They work with an objective and are very professionals.

· Hiring them leads in saving the costs up to some extent.

 

THE IMPORTANCE OF AN ADVERTISING AGENCY:

The reason can be enlisted as follows:

a)       EXPERTISE AND EXPERIENCE- An advertising agency brings together people with the required expertise and experience of the various sub-disciplines of advertising. Thus, it has the copywriters, visualizes, researchers, photographers, directors, planners and people who get business and deal with clients working in ad agencies. An agency moulds all these people into a team and gives them a highly conducive work atmosphere. The agency makes the best use of their talents and experience to deliver rapidly, efficiently and in greater depth than a company or organization could do on its own.

 

b)      OBJECTIVITY AND PROFESSIONALISM- Advertising agencies are highly professional. Objectivity is a major virtue of ad agency. They operate in a strange way. While they take up advertising for others, agencies hardly advertise themselves. Ad agencies being outside intermediaries can be objective. They thus will offer independent and detached viewpoints and suggestions based on objective analysis.

 

 

c)       COST EFFECTIVE- If an organization wants to hire people to do its advertising, it cannot provide them work all through the year. Also, most experts in the fields of advertising like directors, musicians, photographers, charge huge amounts and are often not affordable. Moreover, hiring, organizing and managing all talents required to produce advertising campaigns is not an easy thing. And the fact that 98% of advertisers the worlds over hire as agencies is proof enough about the cost effectiveness of the agencies. Also, the kind of consistent, powerful and compelling advertising that can be created by using the expertise, experience, objectivity and professionalism of ad agencies cannot be measured economically.

 

 

a)                  TYPES OF ADVERTISING AGENCIES

There are basically 5 types of advertising agencies.

 

1.       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.

 

2.       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.

 

3.   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.

 

4.   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.

 

5.     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.

 

 There are some specialized agencies which work for some special advertisements. These types of agencies need people of special knowledge in that field. For example, advertisements showing social messages, finance advertisements, medicine related ads, etc.

 the Internet and online advertising technologies

 The rise of the Internet and online advertising technologies have given agencies access to unparallelled amounts of data about consumers and their online behavior. The resulting diversification of marketing options has become the main challenge for brands, influencing what they expect from agencies today. Because digital marketing creates vast amounts of information, new tools are needed to make sense of and leverage the data.

While many brands still think of ad agencies in traditional terms, specialized agencies increasingly explore opportunities offered by social media, display ads, retargeting, and content personalization. Online tracking and data-collection techniques have elevated advertising to a completely new level, allowing for efficiency unattainable with offline methods, but advertising agencies do not have to be software-development experts to remain competitive.

Today, AdTech companies build complex technologies for brands and advertisers, letting them fully leverage recent advancements in AdTech like demand-side platforms (DSPs). This offers targeting and data-analytics possibilities unheard of in the world of traditional advertising, combining data from both past campaigns, and an advertisers’ first-party data, and from third-party data sources.

Examples of Large, International Ad Agencies

Globalization of advertising and rapid growth of agencies started in the 20th century when American agencies began opening their overseas offices before the two World Wars.

McCann Erickson, established in New York City in 1902, opened its first European offices in 1927. South American and Australian offices followed in 1935 and 1959, respectively. Companies such as J. Walter Thompson adopted a strategy to expand in order to be able to provide their services right where their clients operated.

English agencies followed suit and also started to explore opportunities associated with globalization in the 1960s and 1970s. Overseas expansion offered access to new markets. Saatchi & Saatchi, perhaps one of the most iconic English agencies today, was founded in 1970 and rose to international prominence following relationships with clients such as British Airways and Toyota. This allowed them to build a network of offices worldwide.

Source: https://clearcode.cc/blog/history-advertising-agency/