Information about Advertising Agency

An advertising agency or ad agency is a service business dedicated to creating, planning and handling advertising (and sometimes other forms of promotion) for its clients. An ad agency is independent from the client and provides an outside point of view to the effort of selling the client's products or services. An agency can also handle overall marketing and branding strategies and sales promotions for its clients.

Typical ad agency clients include businesses and corporations, non-profit organizations and government agencies. Agencies may be hired to produce single ads or, more commonly, ongoing series of related ads, called an advertising campaign.

Types of advertising agencies

Ad agencies come in all sizes. They include everything from one or two-person shops (which rely mostly on freelance talent to perform most functions), small to medium sized agencies, large independents, and multi-national, multi-agency conglomerates such as Omnicom Group, WPP Group,Publicis, Interpublic Group of Companies and Havas.

An agency's size should not necessarily be considered a barometer of their billing or ability to handle large accounts. Indeed, these days, smaller boutique agencies are just as likely to count very large corporations amongst their accounts.

Full-service, or Media-neutral advertising agencies have the talent and ability to produce creative and advise clients for a full range of media, for virtually any type of account, or company. Some agencies specialize in particular fields such as medical, charitable, FMCG, white goods, retail, etc. Other agencies specialize in particular media, such as print ads or television commercials. Other agencies, especially larger ones, produce work for many types of media (creating integrated marketing communications, or through-the-line (TTL) advertising). The "line", in this case, is the traditional marker between media that pay a (traditionally 15%) commission to the agency (mainly broadcast media) and the media that do not. Most Full-Service agencies work on a combination of fee-based (to help offset the cost of non-commission production and planning) and commission based (the traditional 15% for electronic) compensation.

Interactive Agencies may differentiate themselves by offering a mix of Web Design/Development, Search Engine Marketing, Internet Advertising/Marketing, or E-Business/E-Commerce consulting. Interactive agencies rose to prominence before the traditional advertising agencies fully embraced the Internet. Offering a wide range of services, some of the interactive agencies grew very rapidly, although some have downsized just as rapidly due to changing market conditions. Today, the most successful interactive agencies are defined as companies that provide specialized advertising and marketing services for the digital space. The digital space is defined as any multi-media enabled electronic channel that an advertiser's message can be seen or heard from. The 'digital space' translates to the; Internet, Kiosks, CD-ROMs, DVDs, and Lifestyle Devices (iPod, PSP, and Mobile). Interactive Agencies function similar to advertising agencies although they focus solely on interactive advertising services. They deliver services such as strategy, creative, design, video, development, programming (Flash and otherwise), deployment, management, and fulfillment reporting. Often times, Interactive Agencies offerings are; Digital Lead Generation, Digital Brand Development, Interactive Marketing and Communications Strategy, Rich Media Campaigns, Interactive Video brand experiences, Web 2.0 website design and development, e-Learning Tools, email marketing, SEO/SEM services, Content Management Services, web application development, and overall Data Mining & ROI Assessment.

Lately, Search Engine Marketing (SEM) and Search Engine Optimization (SEO) firms have been classified by some as 'agencies' due to the fact that they are creating media and implementing media purchases of text based (or image based in some instances of search marketing) ads. This relatively young industry has been slow to adopt the term 'agency' however with the creation of ads (either text or image) and media purchases they do qualify technically as an 'advertising agency' as well as recent studies suggest that both SEO and SEM are set to outpace magazine spending in the next 3-5 years.

Not all advertising is created by agencies. Companies that create and plan their own advertising are said to do their work in house.

Inside the agencies

Creative department

The creative department -- the people who create the actual ads -- form the core of an advertising agency. Modern advertising agencies usually form their copywriters and art directors into creative teams. Creative teams may be permanent partnerships or formed on a project-by-project basis. The art director and copywriter report to a creative director, usually a creative employee with several years of experience. Although copywriters have the word "write" in their job title, and art directors have the word "art", one does not necessarily write the words and the other draw the pictures; they both generate creative ideas to represent the proposition (the advertisement or campaign's key message). Creative departments frequently work with outside design or production studios to develop and implement their ideas. Creative departments may employ production artists as entry-level positions, as well as for operations and maintenance.

Account services

The other major department in ad agencies is account services or account management. Account Services or account management is somewhat the sales arm of the advertising agency. An account executive (one who works within the account services department) meets with the client to determine sales goals and creative strategy. They are then responsible for coordinating the creative, media, and production staff behind the campaign. Throughout the creative process, they keep in touch with the client to update them on the ad's progress and gain feedback. Upon completion of the creative work, it is their job to ensure the ad's production and placement.

Creative services

The creative services department may not be so well known, but its employees are the people who have contacts with the suppliers of various creative media. For example, they will be able to advise upon and negotiate with printers if an agency is producing flyers for a client. However, when dealing with the major media (broadcast media, outdoor, and the press), this work is usually outsourced to a media agency which can advise on media planning and is normally large enough to negotiate prices down further than a single agency or client can.

Other departments and personnel

In small agencies, employees may do both creative and account service work. Larger agencies attract people who specialize in one or the other, and indeed include a number of people in specialized positions: production work, Internet advertising, or research, for example.

An often forgotten, but still important, department within an advertising agency is traffic. The traffic department regulates the flow of work in the agency. It is typically headed by a traffic manager (or system administrator). Traffic increases an agency's efficiency and profitability through the reduction of false job starts, inappropriate job initiation, incomplete information sharing, over- and under-cost estimation, and the need for media extensions. In small agencies without a dedicated traffic manager, one employee may be responsible for managing workflow, gathering cost estimates and answering the phone, for example. Large agencies may have a traffic department of ten or more employees.

Advertising interns are typically university juniors and seniors who are genuinely interested in and have an aptitude for advertising. Internships at advertising agencies most commonly fall into one of six areas of expertise: account services, creative, interactive, media, public relations and traffic.

An internship program in account services usually involves fundamental work within account management as well as offering exposure to other facets of the agency. The primary responsibility of this position is to assist account managers. Functions of the account management intern may include:

• Research and analysis: Gathering information regarding industry, competition, customer product or service; as well as presenting findings in verbal/written form with recommendations

• Involvement in internal meetings and, when appropriate, client meetings

• Assisting account services in the management of creative projects

Interns often take part in the internal creative process, where they may be charged with creating and managing a website as well as developing an advertising campaign. Hands on projects such as these help interns learn how strategy and well-developed marketing are essential to a sound advertising and communications plan.

During their internship, the intern will experience the development of an ad, brochure and broadcast or communications project from beginning to end. During the internship, the intern should be exposed to as much as possible within the agency and advertising process.

Largest advertising groups

According to the Research Company Evaluating the Media Agency Industry, the 2004 top-six largest advertising groups ranked by worldwide billings were:

• WPP Group: $48.055 Billion
• Publicis: $34.365 Billion
• Interpublic Group: $27.870 Billion
• Omnicom Group: $25.230 Billion
• Aegis Group: $20.355 Billion
• Havas: $8.775 Billion

See also

• List of advertising agencies
• List of interactive agencies

Footnotes

References

• AdForum.com, Global Directory of Ad Agencies and Creative Work
• American Association of Advertising Agencies
• World Federation of Advertisers
• The Advertising Research Foundation