Systemic transformation of advertising agencies in...

Systemic transformation of advertising agencies in the second half of the XX century

In the 1960-1970's. in Western Europe and the United States began to appear the first examples of a new trend - on the basis of media offices full-service agencies, with which they once started, began to create separate media agencies. There were several reasons for their appearance. For example, in France, first of all, it was the desire of large advertisers to reduce their advertising costs. They did not consider it efficient to pay 15% of the commission from the media budget and receive full service for this. Instead, they were willing to separately order and pay for the development of communication and creativity and other services, as well as media placement. In the first case, traditional and creative agencies remained to their services, but they agreed to pay directly for their work. For the second case there were specialized media agencies, which still worked on the commission scheme. But since they did not provide any additional services and, therefore, did not incur additional costs, they were ready for a much smaller commission.

Otherwise, the development of media agencies in the UK, where by this time in the market, in addition to large full-service agencies, there was a segment of smaller creative agencies that served several clients. The media budget of such clients was relatively small, which prevented their leading agencies from providing media conditions better than those of large full service agencies. In addition, the cost of maintaining their own media department was too burdensome for such agencies. Media agencies became their solution to the problem, as they consolidated the combined media budgets of several agencies and received conditions better than each of them separately. In addition, they removed from agencies the need to maintain their own media departments. For all this they took a commission which, like in France, was much lower than the traditional 15%, reaching 2-5%.

Today the size of the media commission in the relevant agencies is no longer a fixed value and is determined as a result of negotiations between the advertiser and the advertising agency. As an option, as a result of the tender, several agencies prepare their proposals on the media and bingeing strategy for the brand placement and from them the best is selected in terms of strategy and financial placement conditions. Depending on the size of the budget and the complexity of the media used, the commission for media services can range from 1 to 7% (in the latter case, it can be a small budget sent to regional media, which involves large technical, production, logistics and overhead costs, for example, external advertising).

In the 1990's. in the process of formation of advertising holdings, all major agencies allocated their media departments to separate structures. Often, full-service agencies, merging within the holding, combined their media divisions with the formation of a new media agency that consolidated the budgets of advertisers served by these agencies.

At the beginning of the current century, among the managers of the client, a tendency to consider full-service agencies as obsolete their mastodons, not capable of fresh, original and, therefore effective solutions, was formed among the managers of the client, and to deduce part of the work for their brands in independent specialized agencies. By now, large full-service agencies of the past, in fact, have degenerated or continue to degenerate into advertising groups and holdings. Functions that were previously performed in full-service agencies were performed by departments, now separate agencies with a narrow specialization execute within the groups. As a result, there are many agencies in the market that specialize in certain areas of advertising:

• Communication agencies (marketing agencies, brand consultants, etc.) that lead the client, develop brand communication and can do creative work for it;

• creative agencies (boutiques, design bureaus, etc.), making only the creative on the basis of a brief from the marketing department of the advertiser or communication agency;

• Production studios engaged in the production of advertising, such as shooting video,

• media agencies dealing exclusively with planning, buying and placing advertising in communication channels;

• Digital communications agencies that work with new media (Internet, mobile advertising, etc.), unlike their technical and communication characteristics and capabilities on traditional TV, radio, press and outdoor advertising. If in almost all media agencies there are Internet units, then individual digital communications agencies pretend to a better understanding of the features of the Internet and other digital media, which leads to the development of new innovative communication solutions;

PR -Agencies that develop and implement information support programs for the client;

BTL -Agencies engaged in everything that relates to forms of communication that do not use traditional mass channels - event ( event ) marketing, promo activity in retail outlets, P. And there are agencies that specialize in certain areas of BTL -computations (for example, agencies that deal only with event marketing or only BTL in certain product, geographic or auditor segments);

>

• direct marketing agencies that carry out various types of advertising mailings.

This list does not purport to be a complete description of the technical specialization agencies, in the market you can find agencies with a narrower specialization, as well as combinations of different specializations.

Except technical Specialization in agencies meets specialization in individual commodity markets. An example is the pharmaceutical market (medicines, medical cosmetics, etc.), in which the largest agencies with the type of specialization under consideration operate. The reason for this specialization is the peculiarities of the legislative regulation of the industry, leading to the development of specific, narrowly used approaches to communication, which requires an equally narrow specialization of the agency. In the case of the pharmaceutical market, it is primarily a restriction on the mass communication of prescription drugs, which required the creation of channels for personal communication with doctors, the creation of tools to work with them, stimulating them to "promote" prescription drugs among patients.

Migration and emigration lead to the creation of ethnic segments, which in turn gives another kind of specialization of advertising agencies - on ethnic markets. For example, in the United States there is a large diaspora of Hispanics (only officially 1/8 of the total population of the country) with their own consumer preferences and culture, which determines the perception of communication. For a given ethnic group even separate Spanish-language media work. In the US, there are also agencies working with African-American populations. In the same way around the world, you can find agencies that are oriented toward working with ethnic diasporas (Figure 4.2).

Interaction in the advertising market taking into account the specialization of advertising agencies

Fig. 4.2. Interaction in the advertising market, taking into account the specialization of advertising agencies

The client advertising agency ( 1 ) passes the creative development task to the profile (creative) advertising agency ( 2 ), receives ready-made materials from it ( 3 ), which are sent to the media agency. It can take into account the existing creativity in creating a media communication strategy and choosing carriers/layout formats.

The same sequence of technological actions takes place in a full-service advertising agency that provides services in all areas (customer service, creative, media planning, etc.). However, in this case, the technical tasks and results are moved between the relevant departments of the full-service agency, and not by individual agencies.

In fact, based on any unique market segment, an agency with a new narrow specialization can be created. For example, young people are a unique consumer segment, with their own peculiarities of consumption of goods and services, media consumption and perception of communication. To work with them, youth advertising agencies are being created. The increasing complexity of communication approaches, the development of various channels of communication lead to the formation of agencies dealing exclusively with the coordination of communication - they do not do creative work, do not deal with media placement, they only coordinate the implementation of communication. The emergence of such agencies even forces market participants to talk about the possibility of revival of full-service agencies, where all works, directions of communication and their coordination will again be under one roof.

thematic pictures

Also We Can Offer!

Other services that we offer

If you don’t see the necessary subject, paper type, or topic in our list of available services and examples, don’t worry! We have a number of other academic disciplines to suit the needs of anyone who visits this website looking for help.

How to ...

We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)