ADVERTISING AGENCIES

An ad agency is an independent company set up

to render specialized services in advertising in
particular and in marketing in general.
Types of advertising agencies
1) Full service agency
2) In house agency
3) A creative boutique
4) Media buying services
5) The la Carte agency
6) Special service agency.

1. Full service agency

Offers its clients a full range of marketing
communications and promotion services including
planning, creating the advertisement, performing
the research and selecting the media.
Functions
a. Research
b. Creative services
Copy writers, art directors, and broadcast
producers usually combine their efforts.
c. Print and broadcast production.
The actual mechanical production of the
commercial may be done by an outside producer
under the supervision of an agency TV producer.

d. Media Selection
An agency must select what it considers to be the best
medium.
Reasons for using a full service advertising agency.
Centralization of responsibility and accountability
Professional strength in marketing area.
Stronger pool of talent.
2. In house agency
The in house agency as its name implies is owned
outright by and operated under the direct supervision of the
advertiser.
Organisation decides to establish its own operation for all
services of an advertising agency within its own structure.

Merits
Reduces cost
Ensures lighter control over the agency operations
in terms of creativity.
Demerits
Talents are less likely to be attracted into an inhouse agency.
An in house agency may be influenced by built in
political forces.
3. A Creative Boutique
Provides only creative services.
Full service agency often sub contract work to
creative boutiques when they are very busy.

4. Media buying service.

These are independent companies specialize in
the buying of media particularly radio and TV time.
Specializes in the analysis and purchase of
advertising time and space.
5. The La Carte Agency
Like having dishes listed separately and
independently priced. Advertisers prefer to order a
la carte rather than using all of an agencys
services.
A la Carte services can be purchased from a full
service agency or from an individual firm that
specializes only in creative work, media,
production, research or new product development.

6. Special service agency

Some agencies focus their efforts only in some related
areas and then become specialists in those areas.
These firms collectively are called special service groups.
Selecting an Agency
Agency skills
Current clients
Agency size
Agency location
The length of time the agency has been in business.
Agencys financial position.
The compensation packages.
Product conflicts.

Agency Compensation
1. Commission from advertising media.
2. Clint fees
Commission from advertising media.
Commission is percentage based on the mediums charge
for the advertising space or time used by the advertiser.
Agency receives a specified commission usually 15%
from the media on any advertising time or space it
purchases for its clients.

Goes up to 20%
Clint fees (Cost basis or fee system)
The system is based upon the cost of performing the
services which include direct and indirect costs of
servicing the accounts plus a percentage mark up for
profit.

Ethics in Advertising
Advertising should be right in its approach
and claims.
It is immoral for an advertiser to deceive his
prospects.
Ethical
Unethical
T

DEMAND

DEMAND

Advertising is considered unethical when,

It gives false information
It degrades the rivals product or substitute
product
It makes exaggerated or tall claims
It is against the national and public interest
It gives misguiding information
It conceal information that vitally affects
human life like side effects, precautions etc.
It is obscene.

Unethical advertising can take any of the following

forms.
1.The use of sex, especially the use of women as the
sex objects.
Women are used in advertisements of after shave,
motor bikes etc, but in real life they have nothing to
do with these products.
2. Alcohol & Tobacco advertising
Though the alcohol advertising is banned on
broadcast and print media in India, but then also it
appears indirectly through the advertisements of
soda.
E.g. McDowell Mera No.1 soda (Surrogate
adverting)

Advertisers give very catchy advertisements of

cigarettes and give the psychological impression
that smoking cigarettes is graceful.
They may support it with legal warnings
3. Untruthful claims
E.g. Ad for an AC brand claimed that the Air
Conditioner is fitted with U.S made compressor but
actually it was fitted with Kirloskars compressor.
4. The use of testimonials or endorsements.
Sport stars and film stars advertise for products
which have nothing to do with their profession and
personality.
E.g. Kapil Dev on Kawasaki 100.

5. Exaggerated claims
Includes doing promises exaggeratedly.
E.g. Clinic All Clear ad claims to clear all
dandruffs in just 2 weeks looks to be
exaggerated claim.
6. Unverified claims in a language that is
ambiguous
MALTOVA claims that it is a high energy
drink which is especially good for children.
The question is what it is meant by hi
energy drink and what are its parameters.
There is no verification of the energy it
possesses.

Code for Commercial advertising.

By the act of parliament in 1986, the following
advertisements should not be permitted.
1) Ads which exploits national emblem, any part of the
constitution, personality of national leaders, or state
dignitaries.
2) Ads which have nay relation to religion, political or
industrial dispute.
3) No advertisement shall be presented as news.
4) Ads which tend to incite people to crime or cause order or
adversely affect friendly relation with foreign states.
5) Ads which promote chit funds, money lenders, fortune
tellers etc will not be permitted.
6) Advertisement which portray women as passive or
submissive.
7) Ads which are likely to startle viewers, such as gun fire,
sirens, screams etc.