Chapter 4 The Scope of Advertising: From Local to Global - PowerPoint PPT Presentation

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Chapter 4 The Scope of Advertising: From Local to Global

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  1. Chapter 4The Scope of Advertising: From Local to Global

  2. Chapter Overview Introduces the people and groups who work in advertising

  3. Chapter Objectives Describe the various groups in advertising and their relationships Examine factors that affect agency-client relationships Define the main types of ad agencies Explain how advertisers organize Discuss how agencies get clients, make money Explain what people do in ad agencies Debate the pros/cons of an in-house agency Explain how the media and suppliers help

  4. The Advertising Industry: Organizations Advertisers Agencies Suppliers Media

  5. The Advertising Industry: People Most often employed by advertisers, not clients: Research Artists Sales Writers Management Photographers Accounting Musicians Computer science Performers Legal Cinematographers

  6. Advertisers: Local Franchisees and dealers Chain retailers Govt. & nonprofits Independent businesses Directed to customers in the same geographic area

  7. Advertisers: Local An ad for Rubio’s Baja Grill showcases its unique products

  8. Advertisers: Local Typical structure of small advertisers with high volumes of work

  9. Types of Local Advertising Regular price-line, sale, or clearance Create favorable image, increase awareness, foster goodwill Recruit employees, offer services, sell merchandise Institutional Classified Product

  10. Local Advertisers: Integrators DirectMarketing SalesPromotion PublicRelations MediaAdvertising IntegratedApproach

  11. Advertisers: Cooperative Vertical Co-op Horizontal Co-op Manufacturer provides complete ad & shares costs Firms in the same business or part of town advertise jointly National brand association Expands advertising budget Professional quality ads

  12. Advertisers: Regional and National Top 10 advertisers in the U.S. Ranked by total U.S. advertising in 2008

  13. Advertisers: Regional and National Regional: one or several states National: several regionsor entire country

  14. Advertisers: Regional and National Comparison of national and local advertising

  15. Centralized Department Structure

  16. Decentralized Department Structure

  17. Decentralized International Structure • Divisions are responsible for their own product lines, marketing, and profits • Each division has an advertising dept. to coordinate sales and promotion across brands • The corporate advertising dept. provides information and guidance

  18. Centralized Global Structure • Assumption that product use and needs are universal • Standardized approach in all countries • Extensive research to ensure ad is basic and universal

  19. Agencies: Defined AgencyRoles Develop marketing & ad plans Develop ads & promotions Purchase ad space and time

  20. Agencies: Types Reach Local National Global Internatl Regional Full Service Consumer BTB Boutiques Media Buyers Specialty Interactive

  21. Agencies: People Account Management Traffic Control Administration Media Management Production Creative Concepts Research, Acct planning Other Services

  22. Agencies: Compensation Media Commissions Ad rate card price: $100,000 Agency buys ad at 15% discount: $85,000 Agency bills client full ad amount: $100,000 Agency keeps $15,000 difference

  23. Agencies: Compensation Markups Agency buys materials for campaign Materials cost $85,000 Agency bills for materials plus a 17.65% markup Agency bills $100,000 (cost plus markup)

  24. Agencies: Compensation Fees Incentive system Fee- commission combination Straight-fee (retainer) method

  25. Agencies: In-House Pros Cons May save money Lower creative quality Allows tighter control Less experience and talent May allow greater attention to the brand Loss of objectivity

  26. Agencies: Client Relationships Presentations Referrals Solicitation Community relations& networking Finding and Attracting New Clients

  27. Client-Agency Relationship Stages Development Maintenance Pre-relationship Termination

  28. Client/Agency Relationship Factors Chemistry Communication The Four Cs Conduct Changes

  29. Suppliers Art studios &web designers Printers &related specialists Film & videohouses Researchcompanies

  30. Media Print Out-of-home Electronic Direct mail Digitalinteractive Other

  31. Media Around the World McDonald’s honors an Islamic observance