Participants in the IMC Process

Marketing
communications
specialist
organizations
Media organizations
Advertiser (Client)
Advertising agency
Collateral services
Direct-
response
agencies
Sales
promotion
agencies
Interactive
agencies
Public
relations
firms
Organizing for Advertising and Promotion
The way a company (the client)
organizes depends on
Its size
The number of products it markets
The role of advertising and promotion in
the marketing mix
The budget
Its marketing organization structure
Advertising Dept. Under Centralized System
President
Production Finance Marketing
Research
and
develop-
ment
Human
resources
Marketing
research
Advertising Sales
Product
planning
Pros & Cons of a Centralized System
Fewer
personnel
Better
communications
Continuity
Longer
response time
Less goal
involvement
The
Centralized
System
+ Positive - Negative
Impractical for
multiple brands,
products,
divisions
More top
management
involvement
Decentralized Advertising System
Production Finance
Sales
Brand
Manager
Ad agency
Product
Management
Sales promotion
Package design
Marketing
services
Marketing R & D
Human
Resources
Corporate
Brand
Manager
Ad agency
Advertising
Dept
Marketing
Research
Merchandising
Pros & Cons of Decentralization
Internal conflicts
Ineffective
decision making
Rapid problem
response
Concentrated
attention
Increased
flexibility
The
Decentralized
System
+ Positive - Negative
Unequal
distribution
of funds
Lack of
Authority
In-House Agencies
Benettons in-house agency works with
outside agencies to develop ads
Pros & Cons of In-House Agencies
More
control
Cost
savings
Better
coordination
Less
objectivity
Less
experience
The
In-house
Agency
+ Positive - Negative
Less
flexibility
The Ad Agencys Role
Reasons for using an ad agency
Highly skilled specialists
Specialization in a particular industry
Objective viewpoint of the market
Broad range of experience
Ad Agencies Have Skilled Specialists
Artists Writers Researchers
Photographers Media Analysts Other Skills

Full-Service Agencies
Creating
advertising
Planning
advertising
Producing
advertising
Performing
research
Selecting media
Sales
promotions
Strategic market
planning
Direct
marketing
Interactive
capabilities
Package design
Full range of
marketing
communication
and promotion
services
Nonadvertising
services
Public relations
and publicity
Typical Full-Service Agency Organization
Writers
Art directors
TV
production
Traffic
Print
production
Account
Executive
Account
supervision
VP account
services
Media
Research
Sales
Promotion
VP marketing
services
Personnel
Accounting
Finance
Office
management
VP management
and finance
President
Board of
directors
VP creative
services
Services Provided by Agencies
Agency Services
Research
department
May include
account
planners
Media dept.
obtains
media
space, time
Marketing
Services
The link
between
agency and
client
Managed
by the
account
executive
Account
Services
Creation,
execution of
ads
Copywriter
artists,
other
specialists
Creative
Services
Accounting
Finance
Human
resources
New
business
generation
Mgmt &
Finance
The Role of Creative Boutiques
Creative
Boutiques
Provide only creative services
Full-service agencies may
subcontract with creative
boutiques
Ability to turn out inventive
creative work quickly
Media Buying Can be Specialized
Specialize in buying media,
especially broadcast time
Agencies and clients develop
media strategy
Media
Specialist
Companies
Media buying organizations
implement the strategy and
buy time and space
Test Your Knowledge
Which of the following statements about changes in the way
advertising agencies are being compensated is true?
A) Most clients do not pay full commissions to
their agencies because they prefer fee- or
incentive-based systems.
B) From the viewpoints of both the client and the agency,
the traditional commission system is superior to
negotiated commissions.
C) Most clients want their agencies to be in total charge
of the integrated marketing communications process,
so they prefer to compensate them based on media
commissions.
D) Statements A, B, and C are all true.
Methods of Agency Compensation
Commissions
from media
Fee, cost, and
incentive-based
systems
Percentage
charges
Compensation
Methods
Evaluating Agencies
Financial
Audit
Qualitative
Audit
Verify costs, expenses
Personnel hours charged
Payments to media
Payments to suppliers
Planning
Program development
Implementation
Results achieved
Top Agency Value-Add Activities
New media
guidance,
solutions
Integrated
disciplines
& functions
Creative
ideas
Collaboration
Ideas/programs
for multi comm.
programs
Talented
people
Brand
driver
evaluation
Loyalty to a Single Agency
Young &
Rubicam has
handled the
Dr Pepper
account for
over 30 years
Why Agencies Lose Clients
Poor
performance
Poor
communications
Unrealistic
Client demands
Personality
conflicts
Personnel
changes
Changes
in size of client
or agency
Conflicts of
interest
Change in
clients strategy
Declining
sales
Payment
conflicts
Policy Changes
Policy Changes
How Agencies Gain Clients
Referrals
Solicitations
Presentations
Public Relations Image, Reputation
The Hottest Agency in the Ad Business
Direct-Marketing Agency Activities
Direct
mail
Database
management
Research
Creative
Media services
Direct-
Marketing
Agencies
Production
Database
development,
management
Direct-Marketing Agency
Departments in a typical direct-
marketing agency
Account management
Creative
Media
Database development and management
Sales Promotion Agencies
Catalog production
Promotional planning
Creative research
Tie-in coordination
Fulfillment
Premium design and
manufacturing
Contest/sweepstakes
management
Functions Performed by Public Relations Firms
Strategy
development
Generating
publicity
Lobbying
Public
affairs
News releases,
communication
Research
Managing
crises
Coordination
with promotional
areas
Special events
Functions Performed by Interactive Agencies
Web
banner ads
Search engine
optimization
Kiosks
Interactive
Media Creation
CD-ROMs
Web sites Text messages
Website for the California Milk Advisory Board
Marketing Research Companies
Quantitative studies
Qualitative research
Help clients under-
stand target audience
Pros and Cons of Integrated Services
Convenience
Greater synergy
Single image for
product or service
Poor
communication
Budget politics
Integrated
Services
+ Positive - Negative
No synergy
Test Your Knowledge
Marketing executives say the biggest obstacle to
implementing IMC is:
A) Lack of management support
B) Insufficient budgets
C) Lack of people with the right perspective
and skills
D) Inexperienced ad agencies
Obstacles to Implementing IMC
Key obstacles
Lack of people with the broad perspective
and skills to make it work
Internal turf battles
Agency egos
Fear of budget reductions
Ensuring consistent execution
Measuring success
Compensation