Ad Agency Structure is about the structures of business and the development of ads within an advertising agency. Many ad agencies divide the labor of creating an advertisement into four main parts: account planning, creative development, media coordination, and account management (Campbell, Martin, & Fabos, 2017, p. 360). There are also two main types of advertising agencies, such as mega-agencies and boutique agencies. Another main part of an advertisement agency is the space broker, “who purchases space in newspapers and sells it to merchants” (Campbell, Martin, & Fabos, 2017, p. 354).
The account planner has the task of creating an effective advertising strategy. The strategy usually consists of the combined views of the client, the creative team, and the consumers (Campbell, Martin, & Fabos, 2017, p. 360). Another responsibility of the account planner is to coordinate market research which helps the company analyze and understand the behaviors and attitudes of the consumers towards the product they are trying to sell. The account planner also uses the Values and Lifestyles (VALS) strategy “which measures the psychological factors and divides consumers into types” (Campbell, Martin, & Fabos, 2017, p. 360). VALS researchers advise advertisers to vary their sales.
The creative development team outlines the rough sketches for print and online advertisements and then works on the logos, words, slogans, designs, and graphics for the ad (Campbell, Martin, & Fabos, 2017, p. 361). The creative development team usually consists of writers and artists. For different forms of media, there are different needs of preparation: radio prepares a working script while for television, the team uses a storyboard. For digital media, the team develops websites or interactive tools. “The business structure for digital media is heavily influenced by the technological structure of the media” (Mijung, Jun, & Chan-Olmsted, 2010, p. 11). The creative side of the team struggles with the research side of the team, since the creative part might not agree with what research says.
Advertising agencies also focus on media coordination which is about the planning and placing of advertisements. Media departments are staffed by media planners and media buyers. Media buyers are people who choose and purchase the types of media that are best suited to carry a client’s ads, reach the targeted audience, and measure the effectiveness of those ad placements” (Campbell, Martin, & Fabos, 2017, p. 361). Advertisers also attach incentives to their contracts with certain agencies that allows them to raise the fee if sales are met and lower the fee if the sale goal is missed (Campbell, Martin, & Fabos, 2017, p. 361). The media coordination team chooses the target audience for the advertisement. Account management ties into the media coordination in the sense that they are responsible for the interaction between client and the agency. They are responsible for making sure that the agency meets the requirements of the client and follows the functions of the advertising agency.
There are two types of advertising agencies that operate in the United States: mega-agencies and boutique agencies. Mega-agencies are large ad firms that formed by having several agencies merge together and maintain regional offices worldwide, while boutique agencies are small agencies that focus their talents and effort on only a certain number of clients (Campbell, Martin, & Fabos, 2017, p. 358). Mega-agencies provide a full range of services all over the world, such as advertising and public relations to having their own house radios and television production studios. In 2015, “Omnicom had more than 74,000 employees operating in more than 100 countries around the world” (Campbell, Martin, & Fabos, 2017, p. 358). Mega-agencies attend to multiple types of businesses around the world. Mega-agencies are considered a threat to smaller boutique agencies which have been decreasing over the years. Boutique agencies consists of creative individuals who broke away from the bigger agencies. Boutique agencies offer more personal service since they are smaller and have less clients. The boutique agencies have prospered by innovative campaigns and increasing profits from television accounts (Campbell, Martin, & Fabos, 2017, p. 359). Boutique agencies operate as subsidiaries within multinational corporate structures.
Campbell, R. Martin, C.R., & Fabos, B (2017). Media & Culture: Mass Communications in a Digital Age 11th Edition. Boston and New York: Bedford/St. Martin’s.
Mijung, Kim, M., Jun, H., & Chan-Olmsted, S. M. (2010). PERCEIVED EFFECTIVENESS AND BUSINESS STRUCTURE AMONG ADVERTISING AGENCIES: A CASE STUDY OF MOBILE ADVERTISING IN SOUTH KOREA. (cover story.) Journal of Media Business Studies, 7(2), 1-20.
Image Attribution: Image 1 CC BY-SA 2.0; Image 2 Public Domain
Written by Michael Smith, 2018