© 2009 South-Western, a part of Cengage Learning Chapter 2 The Structure of the Advertising...

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© 2009 South-Western, a part of Cengage Learning Chapter 2 The Structure of the Advertising Industry: Advertisers, Agencies, Media Companies, and Support Organizations PPT 2-1
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Transcript of © 2009 South-Western, a part of Cengage Learning Chapter 2 The Structure of the Advertising...

Page 1: © 2009 South-Western, a part of Cengage Learning Chapter 2 The Structure of the Advertising Industry: Advertisers, Agencies, Media Companies, and Support.

© 2009 South-Western, a part of Cengage Learning

Chapter 2The Structure of the Advertising

Industry: Advertisers, Agencies, Media

Companies, and Support Organizations

PPT 2-1

Page 2: © 2009 South-Western, a part of Cengage Learning Chapter 2 The Structure of the Advertising Industry: Advertisers, Agencies, Media Companies, and Support.

Trends Affecting the Advertising and Promotion Industry

The “Undoing” of Agency Consolidation and Globalization—or not

Media Proliferation, Consolidation, and “Multiplatform” Media Organizations

Media Clutter and Fragmentation Consumer Control: Blogs and TiVos Web 2.0

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Page 3: © 2009 South-Western, a part of Cengage Learning Chapter 2 The Structure of the Advertising Industry: Advertisers, Agencies, Media Companies, and Support.

Scope of the Advertising Industry

U.S. Advertising Spending >$300 B

Worldwide Advertising Spending >$600B

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Page 4: © 2009 South-Western, a part of Cengage Learning Chapter 2 The Structure of the Advertising Industry: Advertisers, Agencies, Media Companies, and Support.

Structure of the Advertising Industry (text Ex. 2.5)

Advertisers

External Facilitators

Advertising and Promotion Agencies

Media Organizations

Target Audience

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Page 5: © 2009 South-Western, a part of Cengage Learning Chapter 2 The Structure of the Advertising Industry: Advertisers, Agencies, Media Companies, and Support.

Advertisers

Trade Resellers Sears, McDonald’s

Manufacturers and Service FirmsProcter & Gamble, Verizon

Social/Not-for-profit OrganizationsUnited Way, Nature Conservancy

GovernmentFederal, State, Local

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Page 6: © 2009 South-Western, a part of Cengage Learning Chapter 2 The Structure of the Advertising Industry: Advertisers, Agencies, Media Companies, and Support.

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In addition to companies, the government makes extensive use of advertising.

In addition to companies, the government makes extensive use of advertising.

Ad in Context Example

Page 7: © 2009 South-Western, a part of Cengage Learning Chapter 2 The Structure of the Advertising Industry: Advertisers, Agencies, Media Companies, and Support.

The Role of the Advertiser in IBP

Describe the value that the firm’s brand provides Describe the brand’s position in the market

Describe the firm’s objectives for the brand in the near-term and long-term

Identify the target market(s) that are most likely to respond favorable to the brand

Identify and manage the supply chain/distribution system that will most effectively reach the targets

Be committed to using advertising and other promotional tools to grow the brand

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Page 8: © 2009 South-Western, a part of Cengage Learning Chapter 2 The Structure of the Advertising Industry: Advertisers, Agencies, Media Companies, and Support.

Agencies

Advertising Agencies:Full-ServiceCreative BoutiqueInteractiveIn-House Media Specialists

Promotion Agencies:Direct Marketing/

DatabaseE-commerce Sales Promotion Event PlanningDesign FirmsPublic Relations Firms

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Page 9: © 2009 South-Western, a part of Cengage Learning Chapter 2 The Structure of the Advertising Industry: Advertisers, Agencies, Media Companies, and Support.

Full Service Agency Services

Account Services

Marketing Research Services

Creative and Production Services

Media Planning and Buying Services

Administrative ServicesPPT 2-10

Page 10: © 2009 South-Western, a part of Cengage Learning Chapter 2 The Structure of the Advertising Industry: Advertisers, Agencies, Media Companies, and Support.

Agency Compensation

Commissions:– around 15% of airtime fees—in flux– 16 2/3 percent for outdoor media– web media is all negotiated

Markup Charges:– production cost + fixed %

Fee Systems:– hourly rates, or by project

Pay-for-Results:– tightly-specified objectives

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Page 11: © 2009 South-Western, a part of Cengage Learning Chapter 2 The Structure of the Advertising Industry: Advertisers, Agencies, Media Companies, and Support.

External Facilitators

Consultants– Creative, Media, Database

Production Facilitators

Software Firms– Web tracking, fulfillment

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Page 12: © 2009 South-Western, a part of Cengage Learning Chapter 2 The Structure of the Advertising Industry: Advertisers, Agencies, Media Companies, and Support.

Media Organizations

Broadcast– TV, radio

Print– Magazines, direct mail, – Newspapers, specialty

Interactive Media– Internet, interactive broadcast, – iPod, Cell Phone

Support Media– Outdoor, directories, sponsorship, – Point-of-purchase, branded entertainment

Media Conglomerates– Time Warner, Disney, Turner

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Page 13: © 2009 South-Western, a part of Cengage Learning Chapter 2 The Structure of the Advertising Industry: Advertisers, Agencies, Media Companies, and Support.

Target Audiences

Household Consumers Businesses Professionals Government Organizations

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