Advertising Agencies

An advertising agency is a specialised, independent business organisation that plans, prepares and places advertisements on behalf of its clients (the advertisers), and renders allied services connected with advertising and marketing. Because most firms lack the specialised skill, the creative talent and the media contacts needed to advertise well, they entrust this work to an expert agency, much as a person entrusts a legal matter to a lawyer.

Functions (services) of an advertising agency:

• Studying the product and market. The agency researches the client's product, its buyers, and the competition, to decide what to say and to whom.
• Planning the advertising campaign. It decides the objectives, the message (the "advertising appeal"), the media to be used and the budget.
• Creative work. It writes the text (the "copy"), designs the layout, prepares the artwork, slogans, jingles and films — turning the plan into finished advertisements.
• Selecting and buying media. It chooses the right media and books space and time, using its knowledge of circulation, rates and audiences.
• Executing and releasing the advertisements. It gets the advertisements printed or produced and released on schedule.
• Evaluating results. It measures how far the campaign achieved its objectives and advises on improvements.
• Allied services. Many agencies also help with market research, public relations, packaging and sales promotion.

How an agency is organised (its main departments): a typical agency has a client-servicing (account) department that deals with clients, a creative department (copywriters and artists) that produces the advertisements, a media department that plans and buys media, a research department, and a production and accounts department.

How an agency earns. An advertising agency is usually paid in two ways: a commission from the media (traditionally around fifteen per cent of the cost of the space or time it buys for the client), and fees or service charges from the client for particular jobs such as research or artwork.

The internal structure of a full-service advertising agency can be set out as a simple hierarchy: the agency's overall management sits at the top and directs five main departments, each with its own responsibility.