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SIX TYPES OF ADVERTISING AGENCY | IMPORTANCE OF ADVERTISING AGENCY

Types of Advertising Agency

What are types of advertising agency? We know that the advertising agency refer to creates, plans and supervise all aspects of a client’s advertising. Let’s discuss in detail various types of advertising agency below;

TYPES OF ADVERTISING AGENCY

The following are the major types of advertising agency that are currently serving the advertising industry:

  1. Full-Service Agencies
  2. Modular Agencies
  3. In House Agencies
  4. Creative Boutiques
  5. Mega Agencies
  6. The Specialist Agency

FULL-SERVICE AGENCIES

A full-service advertising agency is one that provides a range of marketing services. A full – service agency provides services that are directly related to advertising such as copy writing, artwork, production of ads, media planning, etc. It also provides such services in respect of pricing, distribution, packaging, product design, etc.

MODULAR AGENCIES

A modular agency is a full-service agency that sells its services on a piecemeal basis. Thus, an advertiser may commission an agency’s creative department to develop an ad campaign while obtaining other agency services elsewhere. Or, an advertiser may hire an agency’s media department to plan and execute a program for advertising that another agency has developed. Fees are charged for actual work undertaken.

IN HOUSE AGENCIES

Those companies, which prefer to have closer control over advertising have their own in-house agency. This type of agency is owned completely by the advertiser. It performs almost all functions that an outside advertising agency would perform and that’s, why some people refer to it as a full-service advertising department of the advertiser. However. The main difference between an in-house agency and an advertising department is that the in-house agency can undertake to serve several other clients if the owner so desires, but an advertising department solely undertake the work of its owner and not of outside clients. Secondly, an advertising department may not be equipped with the personnel and facilities which an in-house agency would possess. In-house agency not only Provides control over advertising schedule and costs but also offers convenience for its owner because it is just available in the same building as that of the head office of the advertiser. Such in-house agency also benefits the owner as it can bring revenue through agency commissions that, are offered by the media and by way of fees that are collected from outside parties for undertaking their advertising work. Such revenue increases the funds and profits of the company.

CREATIVE BOUTIQUES

These are shop agencies that provide only creative functions and not full-service. The specialized creative functions include copywriting, artwork, and production of ads. They charge a fee or percentage of the media expenditure. Creative boutiques find it very difficult to survive in the presence of full-service agencies and as such most of them convert into a full-service agency or merge with other agencies to provide a wide range of services.

MEGA AGENCIES

This type of agency is one of the large advertising agencies that provide a wide range of marketing services.

THE SPECIALIST AGENCY

There are some agencies that undertake advertising work only in certain areas. There are agencies that specialize only in financial services or only in publicity or only in point-of-purchase materials, etc. For instance, Sobhagya Advertising Agency concentrates or specializes in financial advertising.

IMPORTANCE OF ADVERTSING AGENCY

AGENCY CLIENT RELATIONSHIP

When a new client signs up with the agency, he should be treated with every respect. His advertising program must be executed effectively and efficiently. At the same time, the client should maintain good relations with his agency, in order to motivate the agency to bring out their best in creating a good ad or campaign.

The agency-client relationship is always a give-and-take relationship. In order to build a good bond between the agency and the client, both the parties must keep certain points in mind:

Mutual trusts and concern for each other.

Misunderstanding should be cleared in the least possible time.

The agency should work for the success of the client’s advertising campaign.

Meetings between the client and agency representatives must be held regularly to chalk out plans and to solve problems.

There should be a good rapport between the agency and the client representatives.

In particular, the client should:

  1. Treat the agency with courtesy at all times.
  2. Provide all possible information about the product that is to be advertised and about the organization. This facilitates the agency to do their job much better.
  3. Not unnecessarily bargain for the fees charged by the agency.
  4. Motivate the agency to do good work. Agency charges such as media bills, fees, and other costs must be paid well in time. In no way, the client should wait for the agency to remind of payment.
  5. Not change the agency for the sake of change.
  6. Approve the proposals submitted by the agency. The client should not argue for the sake of arguing.
  7. Give sufficient time to the agency to develop a good advertising campaign. The client should not put the agency unnecessarily in deadline crisis.
  8. Reduce disputes to a minimum.
  9. Finalize well in advance the charges for a particular plan or campaign.
  10. Up-date the agency with any information from his side that would help the agency to serve the client better.

The agency also has certain obligations toward the client:

  1. The agency should work for the success of the client’s advertising campaign.
  2. The agency should devise a very good advertising plan and with the client’s approval must implement efficiently and effectively.
  3. It is the duty of the account executive of the agency to keep the client happy and satisfied.
  4. The agency should not charge unreasonably high rates.
  5. The agency should not handle a client’s competitor’s account.
  6. Try to make every possible effort to obtain, information from the market that would help to create better ads for the client.
  7. Discuss the compensation plan with the client well in advance to avoid disputes later on.
  8. Brief the client, about the various personnel that would handle the client’s advertising work.
  9. Keep the client well informed of any proposed changes at the agency.
  10. Never hurt the client’s ego.
  11. The agency should always provide timely service to the clients.

CLIENT TURNOVER

Client turnover is a situation that arises when an existing client leaves the agency and joins another agency. At the same lime new clients may contract with the agency. Generally client turnover refers to leaving of clients. The reasons for such turnover are as follows:

Inadequate Services:

When the advertising requirement increases and if the present agency cannot satisfy the client with additional required services, the client will contract with some other agency that can provide the advertiser with adequate services and facilities.

Dis-satisfaction:

The client may be dissatisfied with the service and treatment received from the agency. In such circumstances, the client terminates the contract with the agency and joins some other agency.

Changes in personnel:

Changes in the creative personnel of the agency may cause concern to the client and he may follow the creative people to another agency. Again changes in the personnel (in-charge of advertising) of the client may also result in client turnover.

Change in location:

A change in the location of the agency’s office may lead to client turnover. Again, when there is a change in the location of a client’s sales or head office may also lead to client turnover.

Unsuccessful advertising campaign:

When the advertising campaign fails to achieve desired objectives or response from the audience, the advertiser may feel that his campaign is not properly handled by the agency and he may switch over to another agency for his further advertising campaigns.

Higher rates:

If the advertiser feels that the present agency bills high rates, the client may have some reason to contract with another agency.

Reputation of a new agency:

When a new agency with highly creative people enters the advertising scene, the client may be tempted to contract with the new agency.

Difference in opinion:

When there is a difference of opinion between the agency and the client then it may block their relationship.

Change for the sake of change:

At times, some clients change the agency for the sake of change, Divorce is frequent with such clients.

Withdrawal of the product from market:

Again, the advertiser may withdraw the product from the market and as such there may be no need of advertising agency for that line of product.

 AGENCY ACCREDITATION

It refers to official recognition of the agency by various authorities such as Doordarshan, AIR, and India Newspaper Society (INS):

Purpose of accreditation:

The main purpose of granting accreditation to bring out professionalism in the advertising agency’s conduct of business. Only those advertising agencies, which carry on business observing the ethics of maintaining high professional standards, are granted accreditation.

Criteria for granting accreditation:

An ad agency shall be considered eligible for grant and/or continuation of accreditation if it satisfies the following criteria.

  1. Skill and Experience: Those agencies which have sufficient training and professional experience and skill; is adequately equipped to handle advertising business and has actually carried on agency business for a minimum period (six months in case of INS).
  2. Minimum Business Limits: The agency has fulfilled the minimum business limits with DD, AIR and the INS.
  3. Rules and Regulations: The agency must adhere to the rules and regulations framed by DD /AIR and INS. The agency should also handle business in accordance with the Code of Ethics adopted by DD/AIR and INS.

Declaration and Application:

An advertising agency wishing to obtain accreditation with DD/ AIR and INS shall make a declaration, testifying to its ability to fulfill the conditions of eligibility (as mentioned earlier) and its resolve and intentions to abide by the Rules and Regulations in respect of accreditation of Advertising Agencies and the Code of Ethics. The agency shall submit an application to get an accreditation certificate.

Granting of Accreditation:

If the agency satisfies the recognition criteria, then the declaration form application form is accepted and the agency is granted accreditation.

Loss of Accreditation:

An accredited agency shall lose its recognition:

Upon its resignation as an accredited advertising agency. Upon death or bankruptcy of the sole proprietor, dissolution of a firm or winding up of the company, as the case may be. Upon the accredited advertising agency ceasing to do advertising business as provided for under the rules and regulations framed by DD/AIR and INS.

Power to Restore Accreditation:

The concerned authority i.e. DD, AIR, INS shall always have the power renew or restore full or provisional accreditation of any ad agency subject to conditions that may be imposed for such renewal or restoration.

Benefits to accredited agency:

  1. The accredited agency gets 15% commission from the media. Non-accredited agencies get up to 10% commission.
  2. Credit period of about 45 days is allowed to pay media bills.
  3. Advertisers have more faith in such agencies.
  4. Such agencies enjoy better media connections. 
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