CLIENT – AGENCY RELATIONSHIP Submitted By : Aakash Gupta Roll No : 49 Submitted To : Prof. M.R. RAINA
Contents • Introduction • Principles of Client-Agency Relationship • Principles of Agency-Media Relationship • Selection of an Advertising Agency • Client Turnover • Agency Compensation • Factors for Client Agency Relationship Break
Introduction • Client – Agency Relationship is maintaining compatibility among the client, the agency and the brand. • Client - Agency Relationships are attaining more attention and are becoming more prone to stress and strain than ever before. • The average tenure for a client - agency relationship is 9-10 years in India and about 5-7 years in the developed countries.
Principles of Client-Agency Relationship • Agency avoids advertising a close substitute competing products. • Agency receives the green signal from client for all the expenses • Agency keeps the media commission for itself • Cash discounts are passed on to the client • Agency is not taken to task for media lapses.
Principles of Agency-Media Relationship • Agency alone is responsible for payment to media. • Agency does not allow any cut from the commission received from media to go to the client. • Media do not discriminate amongst clients. • Media do not alter the advertising material itself.
Selection of an Advertising Agency • Firstly, agency must be known. • Secondly, agency must have creativity. • Thirdly, agency must have good deal of experience. • Fourthly, account executive must have ability to understand the client’s problems. • Fifthly, the account handling capacity of the agency. • Sixthly, personal equation of the client with agency. • Seventhly, the agency’s ability and presentation. • Lastly, the staff of the agency and its top management quality.
Client Turnover Reasons for client turnover are : • Account is not profitable. • Advertiser is interested in a new medium. • Lack of co-ordination between top executives of the client and the agency. • Staff changes. • Loss of confidence. • Politics and nepotism. • Client and agency perceive the ad strategy in a difefrent manner.
Agency Compensation Basically three methods which are in practice these days to pay the agency are : • Commission system. • Fee system. • Service charges.
Factors for Client Agency Relationship Break • International alignments. • Management changes. • Product conflicts with mergers, takeovers or new product introductions. • Disenchantment with each other. • Brand failures.