MKTG103:

CHAPTER 4 HOW TO CHOOSE AN ADVERTISING AGENCY

BSBA-MM2A SEM2 AY2016-2017, BY Dypiangco, Noble, Sendon FOR Professor G. Naval
Report Handout November 25, 2016
ADVERTISING (DEFINED): A tripartite business; a selling business
(soft-selling); sole purpose to sell goods or services to consumers.

COMPOSITION OF ADVERTISING BUSINESS
1. Clients (Advertisers) companies with branded products
2. Advertising Agency Mixture of specialists (artists,
designers, photographers, writers, specially trained men and
women in the art and science of advertising)
3. Media Newspapers, Magazines, Radios, TVs, Online Portals
or Social Media Sites

CAMPAIGNS Advertising Creations

AD AGENCYS ROLE: To prepare and place effective Ads of/for its
clienteles; Render advisory and creative services; To provide an
overall integrated advertising service with respect to plans
regarding the Clients Product, the Market, the Distribution
Channels, and the Media.

Advertising Agents Main Goal is to study all factors affecting the
sale of a product, and design a detailed plan of advertising within
the framework of a predetermined budget.

Functions of Ad Agencies
Copywriter (basic), Marketing/Advertising Consultant, Research,
Copy Testing, Audience Analysis, Readership Measurements,
Merchandising, Sales Promotions

Agencys Legal Relationship

An Agency is appointed by an advertiser to handle his account, but it
makes contracts with media in its own name, as an independent
contractor and not as anyones legal agent with respect to the
purchase of time and space from a Media Entity.

BRIEF HISTORY OF ADVERTISING AGENCIES

Wikipedia says it can be traced to ancient civilizations, but became
a major force in capitalist economies in the mid 19th century
(1850s). Jump back to 1840s. Newspapers have little ads a
situation seen by some enterprising businessmen (freelance
advertising salesmen); the rise of industrialism (Manufacturing)
and commercialism helped this force.

Advertising Agents then uses portfolios as their stock-in-trade.
Portfolios contained details of newspaper with ad spaces, and list of
prospect clients. Rates are negotiable between Newspaper
Publishers, Advertising Salesmen and Clients. KEY POINT: Highest
profit for Salesmen, Publisher, and cheapest expenses for
Manufacturers;

WRITE YOUR NOTES HERE

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MKTG103: CHAPTER 4 HOW TO CHOOSE AN ADVERTISING AGENCY

BSBA-MM2A SEM2 AY2016-2017, BY Dypiangco, Noble, Sendon FOR Professor G. Naval
Report Handout November 25, 2016

AD AGENCIES AND CLIENTS (Advertisers)

Questions to be answered: 1. Who is responsible for advertising?
2. What is the nature of that responsibility?

All advertising come about as a result of some relationship
between advertising agency and client.

The responsibility for truth and good taste in advertising is shared
between the agency and the client, but the weight of that
responsibility varies widely.

Relationship Cases

Case 1. Agency assumes major responsibility in advertising Clients
product

Case 2. Client comes close to dictating what he/she wants, and
Agency functions largely in the area of graphic execution (Layout
Design)

Case 3. Fully balanced working partnership each party assumes
major responsibility in areas where they feel most qualified; no
precise segmentation, but the goal is maximum effectiveness.

CASE 3 ideally requires that Client should assume major
responsibility for Product Development, Marketing Strategy,
Pricing, Distribution, and so on with the Agency functioning as a
creative contributor in those areas (i.e. valuable ideas with respect
to products and distributions).

CASE 3 also ideally requires that Agency should assume major
responsibility for the creation and execution of selling ideas through
print, voice, and moving images wherein the Client may also
contribute through clear insights and interpretation of why the

product was developed, what its special advantages are, how it is

positioned in the marketplace, and what is are the clients long-
range objectives.

TAKE NOTE:
When Advertising is presented to Client for approval (no matter
by whom), the management of the agency is responsible.
When the Advertising is approved Client (no matter by whom), the
management of the Client organization is responsible.

NOTES SECTION

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MKTG103: CHAPTER 4 HOW TO CHOOSE AN ADVERTISING AGENCY

BSBA-MM2A SEM2 AY2016-2017, BY Dypiangco, Noble, Sendon FOR Professor G. Naval
Report Handout November 25, 2016
ADVERTISING AGENCY EXPLAINED.

AD AGENCIES work for ADVERTISERS (Clients) as middlemen
between Clients and Media. AD AGENCIES charge about 15% of total
Space or Time costs in use of advertising media. Each CLIENTS
ADVERTISING is treated as an Advertising Account by the Ad
Agency, represented by an Account Executive.

SERVICES PERFORMED BY THE AD AGENCY

1. Study the advantages or disadvantages of clients product or
service.
2. Analyze the potential market for product or service.
3. Give advice on possible source of distribution & sales
4. Adviser on types, kinds, costs, effectiveness of various media
services.
5. Formulate definite Presentation Plan
6. Execute the Plan
7. Secure cooperation with the chief Clients Sales Organization
in relation to Advertising Campaign and Sales Efforts.

SELECTING AN AD AGENCY

IT IS IMPORTANT TO ASK: Which agency, qualified and interested
in handling the account, would be best for the assignment?

General Types of Ad Agency

The Big Ones
The Award Winners
The Assembly Line
The Presentationists
The Small Ones
Creative Boutiques emphasis on creative services
New Product Specialists develops positioning and concepts

CHECKLIST/QUESTIONNAIRE TO FIND RIGHT AD AGENCY

1. Record of success of Ad Agencys clients.
2. Part the advertising played on the success.
3. Contribution(s) of the Ad Agency to Advertising Theme
(Who developed the idea behind the ad?)
4. How adequate are the resources of the agency to insure the
success of the advertising work?

PERSONNEL LIST OF A FULLY STAFFED AD AGENCY
Principals
Account Executives
New- Business Men
Copy Directors
Art Directors
Production Managers
Space Buyers

Time Buyers
Outdoor Space Buyers
Radio Directors
Television Directors
Publicity Directors
Directors of Research
Traffic Managers

Merchandising
Directors
Librarians
Office Managers
Checking Departments
Legal Departments

ANY NOTES?

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MKTG103: CHAPTER 4 HOW TO CHOOSE AN ADVERTISING AGENCY

BSBA-MM2A SEM2 AY2016-2017, BY Dypiangco, Noble, Sendon FOR Professor G. Naval
Report Handout November 25, 2016

ETHICAL STANDARDS OF THE AGENCY BUSINESS

1. Disapproved Advertising Copy
a. False statements, misleading exaggerations
b. Indirect misrepresentation through distortion of details, or of their true
perspective, either editorially or pictorially
c. Statements or suggestions offensive to public decency
d. Statements which tend to undermine an industry by attributing to its
products, generally , faults and weaknesses true only of a few
e. Misleading price claims
f. pseudoscientific advertising including claims insufficiently supported by
accepted authority or that distort the true meaning or practicable
application of a statement made by professional or scientific authority
g. testimonials which do not reflect the real choice of a component witness.

2. Rebating (by Media to Ad Agencies)
3. Extra Compensation (Red Tape)
4. Budget for Speculative Materials
5. Offering Credit Extension to Advertisers (to get a project)
6. Unfair Tactics (black propagandas)

BASIC PRINCIPLES IN AGENCY-MEDIUM RELATIONSHIP

1.
2.
3.

4.

The agency is solely liable for payment to media. If the advertiser pays the
agency but the agency fails to pay the medium, it is the mediums loss
The agency agrees, with the medium, that t will not rebate to its client any
part of the commission allowed by the medium
The medium agrees that its rates shall be punished, that the rate at which it
contracts with the agency shall be the lowest rate charged for the same
service, and that the medium will follow a uniform policy toward agencies,
without discrimination.
The content of adverting prepared by the agency is subject to approval by
the medium, but the latter may not change the content of the advertising
without the consent of the agency.

ASSOCIATIONS OF ADVERTISING AGENCIES

ASSOCIATION OF PHILIPPINE ADVERTISING AGENCIES (APAA)

Objectives
1. To encourage consideration and acceptance of advertising as a
profession.
2. To promote and adhere to ethical principles and practices.
3. To increase the usefulness of the profession to the public at large
and to make better known (to the public) the functions performed
by advertising agencies.
4. To promote and foster the continued recognition of the social
responsibility of advertising and of advertising agencies
5. To help in the promotion of the general welfare of the country
and to assist in the strengthening of the Philippine economy.

ASSOCIATION OF ACCREDITED ADVERTISING AGENCIES OF THE
PHILIPPINES (4As P)

Objectives
1. To upgrade the practice of advertising.
2. To promote the welfare of the association as a whole and of its
member agencies individually.
3. To enhance and make more effective the working relationships
between advertising agencies and the other sectors of the
advertising industry.
4. To foster social responsibility among advertising practitioners
and help protect the welfare of the general public.

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