CHAPTER-THREE

ADVERTISING MANAGEMENT

By Temesgen B. (PhD)
 Overview of Advertising Management

What is ad?
Advertising is any paid form of non-
personal presentation and promotion of
ideas, goods, or services by an
identified sponsor (Kotler).

By Temesgen B. (PhD)
 Cont’d..
• Advertising is a paid form of persuasive
communication that uses mass and
interactive media to reach broad audiences
in order to connect an identified sponsor
with buyers (a target audience), provide
information about products (goods,
services, and ideas), and interpret the
product features in terms of the customer’s
needs and wants (Sandra et al.).

By Temesgen B. (PhD)
 Cont’d…
• Advertising is a paid form of
persuasive communication that uses
mass and interactive media to reach
broad audiences in order to connect an
identified sponsor with buyers (a target
audience), provide information about
products (goods, services, and ideas),
and interpret the product features in
terms of the customer’s needs and
wants.
By Temesgen B. (PhD)
 Cont’d…

Five Basic Factors of Advertising

1. Paid communication
2. Sponsor is identified
3. Tries to inform or persuade
4. Reaches a large audience
5. Message conveyed through many different kinds
of largely non-personal mass media

Principle:
An effective advertisement is one that can
be proven to meet its objectives.

1-5
 Why Ad?: Roles of Advertising

Marketing Role •Marketing is the process a business

uses to satisfy consumer needs and
wants through goods and services.

Communication Role
•Advertising is a form of mass
communication.

Economic Role •Improves standard of living and the

economy by generating material
consumption.

•Informs us about new and

Societal Role improved products, teaches us how
to use these innovations, etc.
By Temesgen B. (PhD)
 Types of Advertising
Interactive Brand
Advertising Advertising

Public Service
Retail or Local
Advertising
Advertising

Institutional
Advertising Political
Advertising
Business-to-
Business Directory
Advertising Advertising
Direct-Response
Advertising
By Temesgen B. (PhD)
 cont’d…
8

1. Brand Advertising: focuses on a

product that is nationally manufactured
and distributed.
2. Retail or Local Advertising: is local and
focuses on a store.
3. Political Advertising: is used by
politicians to persuade people to vote
for them.
 Cont’d…
4. Directory Advertising: such as the yellow pages,
9

refers people to find out how to buy a product or

service.

5. Direct Response Advertising: uses various media

forms in an attempt to stimulate a sale directly.

6. Business to Business Advertising: is directed at

other businesses rather than at the consumer.

7. Institutional Advertising: focuses on establishing

a corporate identity.
 Classifications of Advertising
By Target By Geographic By By
Audience Area Medium Purpose

• Consumer • Local (retail) • Print • Product

• Nonproduct
• Business • Regional • Broadcast
(electronic) • Commercial
– Radio
• National • Noncommercial
– TV

• International • Action
• Out-of-Home
• Awareness

• Direct-Mail

By Temesgen B. (PhD)
 Functions of Advertising

Provide Product &

Brand Information

Provide Incentives Advertising

To Take Action Performs 3 Basic
Functions

Provide
Reminders and
Reinforcement
By Temesgen B. (PhD)
 More Specifically Ad Functions

1. Builds awareness of products & brands

2. Creates a brand image
3. Provides product & brand information
4. Persuades people
5. Provides incentives to take action
6. Provides brand reminders
7. Reinforces past purchases & brand
experiences

By Temesgen B. (PhD)
 What is Ad management ?

• Advertising management can be

thought of as the process of creating ad
messages, selecting media in which to
place the ads, and measuring the
effects of the advertising efforts:
messages, media, and measures.
• This process generally involves at least two parties, the organization
that has a product or service to advertise-the client-and the
independent agency, or agencies, responsible for creating ads, making
media choices, and measuring results-the agency or agencies

By Temesgen B. (PhD)
 The Agency World

• Who are the key players?

• The players include: the advertiser
(referred to by the agency as the client)
who sponsors the message, the
agency, the media, and the suppliers
who provide expertise.

By Temesgen B. (PhD)
 Cont’d...
• The Advertiser: Advertising begins
with the advertiser, which is the
company that sponsors the advertising
about its business.
• The Agency :The second player is the
advertising agency (or other types of
marketing communication agencies) that
creates, produces, and distributes the
messages.

By Temesgen B. (PhD)
 Cont’d...
• The Media: The third player in the
advertising world is the media. The
emergence of mass media has been a
central factor in the development of
advertising because mass media offers a
way to reach a widespread audience.
• Professional Suppliers and Consultants:
The fourth player in the world of advertising
include artists, writers, photographers,
directors, producers, printers, and self-
employed freelancers and consultants.
By Temesgen B. (PhD)
 Advertising Agency
• Firm that :
 creates new promotional ideas,
 designs print, radio, television, and internet
advertisements,
 books advertisement space and time,
 plans and conducts advertising campaigns,
 commissions research and surveys, and
 provides other such services that help a client in
entering and succeeding in a chosen market.
• 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 Advertising Agency or ad agency is a
service provider that works for clients to
create an effective and goal oriented
advertising campaign aimed at representing
the Company positively in the eyes of its
target customers.
• According to American Association of
Advertising “An advertising agency is an
independent organization of creative people
and business people who specialize in
developing and preparing market plans,
advertisements, and other promotional tools”.
Primary services of Advertising
agencies
 complete a marketing analysis
 develop an advertising plan
 prepare a creative strategy
 create advertising executions
 develop and implement a media plan
 handle billing and payments
 integrate other marketing communications
 Types of Ad Agencies
A. Full-service agency: includes the four major staff
functions of account management, creative services,
media planning, and account planning, which includes
research.
• A full-service advertising agency also has its own
finance and accounting department, a traffic
department to handle internal tracking on completion
of projects, a department for broadcast and print
production (sometimes organized within the creative
department), and a human resources department.

By Temesgen B. (PhD)
Functions of full-service agencies

 account management
 creative
 media planning and placement
 research
i. Account management

• Liaison between agency and client

responsible for understanding...
• the client’s business
• the client’s marketing needs
• strategy development
• representing client point of view
within the agency
 ii. creative department
• responsibility:
 the creative department is responsible
for creating and producing the print and
broadcast advertising
 strategy is key
 good creative work is always guided by a
creative strategy that sets forth goals to
be accomplished and key message
points to be relayed
 iii. Media department

• The media department has two main

functions - planning and buying.
 The planning group handles more
strategic marketing and media issues.
 The buying group handles media
negotiations and implementation.
 iv. Research department
• Interpret market environment
• gather and analyze research data.
• primary and secondary techniques
• Determine consumer needs/perceptions
• understand problems
• Advise how ads can meet strategic goals
• help /find solutions Research
Report
 Cont’d...

B. In-House Agencies: Like a regular

advertising agency, an in-house agency
produces ads and places them in the
media, but the agency is a part of the
advertiser’s organization, rather than an
outside company.
• An in-house agency performs most, and sometimes all, of the
functions of an outside advertising agency and produce
materials, such as point-of-sale displays, sales team literature,
localized ads and promotions, and coupon books, that larger
agencies have a hard time producing cost effectively.

By Temesgen B. (PhD)
• The 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
undertakes that work of its owner and not of
outside clients.
 Cont’d...
C. Specialized Agencies: Many agencies do
not follow the traditional full-service agency
approach.
• They either specialize in certain functions
(writing copy, producing art, or media buying),
audiences (minority, youth), industries (health
care, computers, agriculture,business-to-
business communication), or markets
(minority groups such as Asian, African
American, or Hispanic).

By Temesgen B. (PhD)
 D) Modular Agencies

• A modular agency is a full service agency that

sells its services on a piece meal 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 agencies media
department to plan and execute a program for
advertising that another agency has developed.
Fees are charged for actual work undertaken.
 E) Creative Boutiques

• These are shop agencies that provides only

creative functions and not full-service. The
specialized creative functions include copy
writing, artwork and production of ads, they
charge a fee or percentage 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.
Benefits of using an Advertising Agency

 They have the ability to buy media in bulk at

rates that a single business cannot obtain.
 They are educated as to the best times and
places to run ads to reach your target
market, ultimately minimizing wastage
 They can help you fine tune your target
market so that the message is designed to
reach those you want to reach.
 Easily Administered
Disadvantages of using an Advertising
Agency
• A main disadvantage of using an advertising agency
would be the communication factor. If an agency
does not communicate or relay it's clients goals and
creative wishes properly problems can occur within a
contract and lawyers may have to become involved.
• Another disadvantage would be the media buying
discounts you may not be able to take full advantage
of due to commission barriers within an agency,
 Role of Advertising Agencies
• Advertising agency is a service provider that helps its
clients by developing suitable ad campaigns for
them.
• Their aim is to represent its clients' products and
services before customers in such a way that a
positive image is created in their minds.
• Advertising agency's role start with the identification
of its clients' goals and objectives.
• This turns out to be of immense value in planning
and creating the future course of action concerning
ad campaigns.
 For whom is the product or service designed?
 Who would use it?
 Who is the "target group"?
 What's special about the product? In what way is it
distinct?
 Unique? Different?
 What's its "position" in relation to other similar
products?
 What do you want to convey to the public about your
product?
 How should your company contact the public?
 What medium should it use? Radio? TV?
Newspapers? Magazines?
 Bus/subway ads? Direct mail? etc.
 Once an advertising agency gets acquainted with its
clients' business objectives, it starts creating and
planning its ad campaigns.
 For this it keeps in mind certain points such as
increasing sales, pushing new products in the
market, restating benefits of its clients' brands, and
drawing new customers in addition to establishing
and maintaining contacts with their existing
customers.
 An advertising agency's professional teams put in
their best efforts to develop attractive slogans, and
body copy for ads. All this is done within the defined
parameters of its clients and their budgetary
allocations.
Functions of Advertising Agencies

• Account Planning
• Advertising agencies typically have account
planners who work as the go-between for the client
and the agent. They ensure that client needs are
expressed to the research and creative teams.
• They also work to ensure that necessary information
is transferred to the client regarding creative,
research, competition or any of other factor that may
somehow affect how the client's product gets
marketed to consumers. Account planning is where
agencies start their initial interaction with clients.
• Marketing Research
• Advertising agencies work with companies to
establish the characteristics of their target markets
through marketing research.
• Advertising agencies spend a substantial amount of
time researching consumers to understand what they
buy and what motivates them to buy.
• Knowing the competition, account managers at
advertising agencies research the environment,
identify competitors, and research their marketing
tactics.
• Through market research, advertising agencies also
identify political, social, technological and economic
factors that may affect a client's campaign.
• Creative
• Advertising agencies are known for their creative
output, which can include website design, advertising
copy, magazine advertisements, and radio and
television commercials.
• The medium of advertising often varies by
campaign. Graphic designers, web designers,
writers, editors and creative directors make up an
advertising agency's creative department.
• Selling Advertising Space
• Advertising agencies don't just create advertising
pieces for clients; they also give clients insight as to
which media will be most effective for their product,
service, event or cause.
• In the process, they work to secure advertising
placements for customers either online, in print, on
television or on the radio.
Thank You
Question???