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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.
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