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Four Types of Advertising Agencies

Here are basically four types of ad agencies. They are:

  • In-house agencies

  • Creative boutiques

  • Media buying agencies

  • Full service agencies

In- house agencies 

Some companies, in an effort to reduce costs and maintain greater control over agency activities, have set up their own advertising agencies internally. An in-house agency is an ad agency set up, owned and operated by the advertiser. Many companies use in-house agencies exclusively; others combine in-house efforts with those of outside agencies.

A major reason for using in-house agency is to reduce advertising and promotional costs. Companies with very large advertising budgets pay a substantial amount to outside agencies in the form of media commissions. With an internal structure, these commissions go to the in-house ad agency. An in-house ad agency can also provide related work such as sales presentations and sales force material, package design, and public relations at a lower cost than the outside agencies.

Saving money is not the only reason companies use in-house ad agencies. Time savings, bad experience with outside agencies, and the increased knowledge and understanding of the market that come from working advertising and promotion for the product or service day by day are also reasons. Companies can also maintain a tighter control over the process and more easily coordinate promotions with the firm’s overall marketing programmes.

Opponents of the in-house agencies say that they can give the advertiser neither the experience nor the objectivity of the outside agency and nor the range of services. They argue that the outside agencies have a more specialized staff and attract the best creative staff. Also flexibility is higher since if the company is not satisfied with the agency it can be dismissed, whereas changes in an in-house agency could be slower and more disruptive.

Thus we can summarize by saying that

Ad agency

Advantages

Disadvantages

In house agency

Cost saving

More control

Increased coordination

Less experience

Less objectivity

Less flexibility

In-house agencies in India are:
 

  • Levers – Lintas (previously)
  • Videocon – Confidence
  • Reliance – Mudra (when Mudra started out)

Creative boutiques

Creative boutique is an agency that provides only creative services. These specialized companies have developed in response to some client’s desires to use only the creative talent of an outside provider while maintaining the other functions internally.

The client may seek outside creative talent for two reasons:

  • Because he wants an extra creative effort
  • May be because its own employees of the in-house agency or the agency that he has appointed do not have sufficient skills in this regard.

The full-service agencies also sub-contract work creative boutiques when they are very busy or want to avoid adding full time employees to their pay roll. Creative boutiques are usually found by members of the creative departments of full service agencies who leave the firm and take with them clients who want to retain their creative talents. These boutiques generally perform creative function on a fee basis.

Few creative boutiques in India:
 

  • RMG David
  • Vyas Gianetti Creatives
  • Chlorophyll

Media buying agencies

Media buying agencies are independent companies that specialize in the buying of media, particularly radio and television. The task of purchasing advertising media has grown more complex as specialized media proliferate, so media buying services have found a niche by specializing in the analysis and purchase of the advertising time and space. Agencies and clients generally develop their own media plans and then hire the buying services to execute them.

Some media buying agencies do help advertisers plan their media strategies. Because media buying agencies purchase such large amounts of time and space, they receive large discounts and can save the small ageny’s or client’s money on media buying. Media buying agencies are paid a fee or commission for their work.

  • Mindshare
  • Initiative Media (LOWE)
  • Zenith Media (Bates, Saatchi & Saatchi)
  • Optimedia (Publicis)
  • Starcom (Leo Burnett)
  • Fulcrum (HTA) Normal 0 MicrosoftInternetExplorer4

Full – service agency

The function of an advertising agency is to see to it that its client’s advertising leads to greater profits in the long run than could be achieved without the ad agency. Most such agencies are large in size and offer their clients a full range of services in the area of marketing, communications and promotions. These include planning, creating and producing the advertisement, media selection and research. Other services offered include strategic marketing planning, sales training, package design, sales promotion, event management, trade shows, publicity and public relations.

The full service agency is composed of various departments; each is responsible to provide required inputs to perform various functions to serve the client.


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