Advertising Agencies Essay

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Today’s  world  is more  media  saturated than  ever before.  We  are  bombarded with  new  ideas  and concepts every day. Advertising has become a phenomenon that  undergoes  transition every now and  then.  It  is being  reexamined and  altered  to address clients’ needs in a more responsive manner. It  has  grown  into  a  nonpersonal form  of  mass promotion that commonly  addresses a sizable audience  or  target  group.  This  art  of promoting products and  services requires  efforts  par excellence and a medium that  tailors  the concepts and fashions  them  into ideas. This medium  is the advertising  agency. Advertisers employ advertising agencies to communicate a marketing message to a  target   group.   Advertising   agencies  serve  this need by bridging the gaps between consumers  and advertisers.

The American Association of Advertising Agencies defines an advertising  agency as a hub of creativity.   The   machinery   includes   clusters   of creative  individuals  who  perceive,  plan,  develop, and produce  an advertisement. These people work on behalf of the advertiser,  catering  to the client’s need with innovative concepts and producing them for the preferred  publicizing  media.

Advertising agencies welcome and cultivate novelty, creativity, and professionalism in their employees. They develop and place advertisements on various  media  for advertisers  who  seek to sell their goods and/or  services.

These advertising agencies are generally local companies   that   operate   in   a   particular  area; however,   at  times  they  also  render   services  to various  global  companies,  such as the Interpublic Group  of Companies. The alliance with the advertising   agencies   helps   global   businesses   to address   the   global   market   demands   and   plan strategies to extend and expand a campaign worldwide. The agency creates  the advertisement, plans  its placement, and  lays out  the  advertising campaign—when  and   where   the   advertisement will be exhibited  and which group will be targeted. After these stages of planning  and producing of the advertisement  are  completed,  it  is  delivered   to the  client.  The  core  purpose   of  this  effort  is  to make the product a success.

Advertising agencies operate by charging a commission  up to 15 percent  of media costs from the media enterprises.  In addition, advertising agencies also charge the advertisers. The size of an advertising  agency is another important factor that results in productivity. Some agencies are run by a small  team  of two  or  three  people,  but  agencies that   operate   on   a  massive   scale  may   employ hundreds of creative  individuals  as well as other experts in various departments. Names like Wieden+Kennedy, Droga5, Euro RSCG 4D, BBDO, Grey Digital, Ogilvy Interactive, Avenue A/ Razorfishare, and McCann World Group  are some of the biggest in the business. The age of globalization has also affected and influenced  the advertising industry. These companies  face the pressure  to expand  and cater to a massive audience  on a universal scale. Many  large and  medium-sized  agencies have expanded their business to different parts of  the  world  and  some  have  even  merged  with other  global  agencies if they do not  have enough resources  to open up new business in a new land.

The relationship between an advertising  agency and  the  advertiser  also  encounters various challenges  related   to  standards. The  advertising agency has to shape strategies to work in the competitive   environment  in  order   to  deliver  its best.

In the middle of the advertising  business are the international advertising  agencies that have an important part  in  developing  worldwide   brands both  nationally and  globally.  Today,  advertising agencies  have  spread  the  canvas  of their  services from  solely  creating  advertisements to  exploring new  horizons  in the  field. These  services include buying   media   space,   conducting   competitive market  research,  compiling  information, and  providing assistance  in pre-and  postsales  promotion activities,  along  with  the  planning  and  executing the advertising  campaign.

The U.S. Census  Bureau  reports  that  there  are some 10,000 advertising  agencies in operation in the United States, which include full-service agencies, media-buying agencies, interactive agencies, and creative and in-house agencies. Most of them are primarily  consumer  advertising agencies, which usually focus on business-to-business  companies;  others  are  multicultural and also cater to international and ethnic business, like the   Asian,   African   American,    and    Hispanic markets.


The human intellect has the ability to develop innovative    concepts.   Although    this   ability   is valuable for many industries and domains, it is particularly exciting  in  the  world  of  advertising. The concept of the advertising  agency goes back to colonial times, when post offices served the purpose of taking  advertisements. In the  17th  century  the local   post   offices   accepted   advertisements   to publish  in  colonial  newspapers. In  1843,  Volney Palmer established the first advertising agency in Philadelphia. The advertising  business further expanded, and new ideas were introduced. During the   early   1870s,   advertisement-writing  services were  taken  up  as a business  by both  agents  and advertisers.

Functions  Of The Advertising  Agency

Advertising plays a significant role in today’s consumer  world. It is considered  one of the biggest businesses across the globe; it is estimated  that  the amount spent  on  advertising  will be nearly  $604 billion in 2015. Corporations universally endeavor to set and maintain standards for advertising  strategies. On the other hand, they also strive to understand  and address  the need for change in different environments. Advertising agencies work  to maintain their distinctive position in the competitive environment. Those advertising  agencies that believe in responsible  advertising  are considered  to be the ones that  will survive for a longer  time in this age of competition. Integrity  and  well-articulated  ethical  practices   are  deemed  necessary  to prosper  and to maintain a dignified position  in the business environment and the advertising  industry at  large. To  achieve  a global  advertising  strategy, the agencies seek to outline their functions. Generally, an advertising  agency executes the functions described below.

Recognizing Clients. Identifying the potential clientele is one of the core functions of an advertising agency. The agencies contact  the clients who  seek to advertise  their services and products. The focus remains on big names, usually those that are financially  strong  and  provide  quality  services or products.

Planning  the Advertisement. The  second  function of an advertising agency is to plan the advertisement according  to the features that highlight the product or  service. In this  process,  the  advertising  agency first evaluates  the product’s  quality  and features  in a  competitive   milieu.  Thorough research  on  the client business is conducted to evaluate its economic stability   and   the   quality   of  its   products  and services. The agency then reviews the competitor’s expenditures  on  advertising.   Finally,  the  agency plans the production and execution  of the advertisement.

Creative Strategy. One of the major functions  of an advertising  agency comprises formulation of a thorough and creative strategy to execute the campaign. In this process, a group of creative individuals  contribute their skills to make the campaign  a success. These people include art directors,   copywriters, graphic   designers,  artists, photographers, and other creative people.

Creating Advertisement Copy.  The content  of any advertisement is one of the important elements that contributes to its success. Be it a print advertisement, radio jingle, or television visual, the message has to be  catchy  and  appealing.  Copywriters, designers, animators,  film  directors,   and   other   specialists work  together   in  a  professional   environment to develop creative material for the advertisement and bring business to the agency.

Client’s Approval. Once the advertising team comes up with  an idea, it discusses the concept  with  the client,  and   the   copy  for   that   advertisement  is shown to the advertiser  for approval.

Media Selection. Choosing  an appropriate medium for the particular advertisement is an integral task. The  advertising   agency  makes   certain   that   the message will hit the targeted group, whether it goes into a newspaper, magazine, or any other publication; is shown  on TV; or is aired on radio. This decision is taken considering certain important factors such as the cost of time and space, the advertisement budget,  the  nature  of the  message, and more.

Execution. Once the advertisement reaches its final stages, the advertising  agency places it in the media selected for execution.

Evaluation Function.  In the postexecution stage of an advertisement, the advertising  agency evaluates its  success.  It  is crucial  and  considered   ethically professional  for  an  advertising  agency  to  inform the client of its findings.

Roles  Of Advertising  Agencies

In this competitive arena, the role of the advertising agency has grown in many ways. Among the other functions   of  a  present-day advertising   agency  is providing  services such as marketing, research, and accounting. These  agencies  conduct   surveys  and independent market research on the target markets, the packaging industry, the product design, effective media  for  the  promotion of a certain  product or service, and so on. In addition, these agencies often provide  services to  different  media  organizations to  evaluate  the TRPs  (television  rating  points)  of various  television programs, media costs, program ratings,   media  reach,  circulation  of  newspapers and other  publications, as well as market  research in a competitive  environment. The accounting function includes payments from clients, bills, discounts,  research,  and so on.

Challenges For The Agencies

Advertising is considered a fundamental instrument for social communication as well as for promoting, marketing,  and   strengthening   world   business today.   The   ever-changing   world   scenario   has caused major  transformations to take place in the business  community as well. The old practices  of advertising  agencies have  been  modified  with  the passage   of  time.  Today,   many   businesses   have shifted interest from advertising to promotional strategies. They spend more on promotion than on advertising  campaigns.  To overcome  the gradually growing cost gap, many advertising agencies are rendering other services by opening subsidiary companies that provide public relations services, packaging   and   logo   designs,   direct   marketing, and television marketing. Presently, advertising agencies render more services than just creating advertisement copy.

The  purpose   of  advertising   agencies  is  clear. These agencies not only provide advice or suggestions  to  clients  but  also  counsel  them  on their   marketing  and   advertising   strategies,   and on a larger  scale, they also provide  counseling  on potential media strategy. These agencies create and produce all kinds of advertising necessary for a product based on the advertiser’s allocated  budget. Be it print,  electronic,  or  digital  advertising,  they carry out the process up to the postexecution stage to facilitate  the process  for the client.  Over  time, not only have the advertising  agencies altered their organizations but many of them have also assumed the   status   of  “specialty   firms”   that   focus   on particular fields like health  care, interactive advertising,   online  and  digital  advertising,   mail order, and other media. The advertising agency business has thus undergone a huge transition. It is being assessed and restructured over the course of time  not  only  to  introduce novel  concepts  to  the field but  also  to  address  clients’ need  in a more effective manner.


  1. Isayeva, Aygul. “The Role of the Advertising Agency: Standardization/Adaptation.” IBSU Scientific Journal, v.5/2 (2011).
  2. Kawashima, Nobuko. “Advertising Agencies, Media  and Consumer Market: The Changing  Quality  of TV Advertising in Japan.” Media, Culture  & Society, v. 28/3 (2006).
  3. Melewar, T. C. and Claes Vemmervik. “International Advertising Strategy: A Review, Reassessment, and Recommendation.” Management Decision,  42/7 (2004).
  4. Sinclair, John. “Globalization and Regionalization of the Advertising Industry in the Asia-Pacific.” Asian Studies Review,  31/3 (2007).
  5. Wilmshurst, John and Adrian   Fundamentals  of Advertising. London:  Routledge, 2010.

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