Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communication Organizations

"Advertising is the greatest art form of the 20th century." - Marshal McLuhan

Advertising is fast becoming a tool that is being used not only to promote the product but also to differentiate it from the horde of other similar products. It entails knowledge of the industry, of the structure and the functions of the organizations involved in the process.  Of late, there has been a change in the way advertisers communicate with the target market as they search for better ways to catch and hold the attention of the consumers.

This section deals with the various agencies involved in the process of IMC as well as their roles, responsibilities and relation to each other which will be explained using the example of the IMC methods followed by the international brand Nike.

Participants in the IMC Process:   

1. Clients: Clients are the key participants in the IMC process since it is their product/service or idea which is to be marketed and also since it is their funds to be utilized for the advertising and the promotions.  They are also the final authority on the marketing plan as well as the final advertising and promotional programs to be employed.
2. Advertising agency: it is the specialist, external agency employed for the creation, production and/or the placement of the communication message for the promotion or advertising of the product or service in question. It is a common practice for  big firm to have multiple

Media Organizations: These organizations play an important role by way of providing an apt environment for the firms marketing message.  For example, in the case of the SX4 ad that wanted to target specifically men, the following print ad was used. The medium’s primary objective is to sell itself for companies to reach their target markets with their messages effectively. This was done effectively by the said ad.

Specialist Marketing Firms: They include direct-marketing agencies, sales promotion agencies, interactive agencies, and public relations firms. These organizations provide services in the areas of their expertise.

Collateral Services: These are organizations that provide support services to the advertisers, media organizations and the specialized marketing firms.

Who performs the Marketing Activities?

In the current organization, we see everyone from the finance to the IT department is responsible for the marketing activities. But traditionally, there are 3 kinds of organizational systems under which the marketing activities can be performed.

Centralized System is characterized by division of the work along functional lines where advertising is placed within the marketing domain alongside sales, promotion, research and product planning. In such organizations, the marketing manager will control and monitor the entire promotion operation including budgeting, creation, production, placement of ads, media schedules and sales promotion plans for all the products and services of the company.

The specific activities are:

• Planning and Budgeting
• Administration and execution
• Coordination with other departments
• Coordination with outside agencies and services

Advantages and Disadvantages of centralized system are shown in the diagram

Decentralized system on the other hand is more suitable for companies having a diverse portfolio of products and services which are of different kinds and hence a single manager cannot effectively communicate the brand message for all of the products. Such organizations have different product managers for each of the products who handle all of the activities of the marketing department for that product. Examples are Proctor and Gamble, Nestle and Gillette where it is also observed that the products of the same company compete with their own products. This is possible only because each of the products has its own product manager and its own team for advertising and promotion.

Some organizations also include a category management system placed above the brand managers which is responsible for collating and managing the data of all the products. The diagram is an example of the category management system being used at Proctor and Gamble.

Advantages and Disadvantages of Decentralized system:

In-house agencies are the third kind of marketing system that an organization could have. It is a characteristic of organizations that want to save costs by setting up their own advertising agencies internally. It is an agency that is set up, owned and operated by the advertiser and is generally given a separate identity. Examples of such organizations are The Gap, Avon, Calvin Klein and Benetton. Some companies use in house agencies in tandem with the external agencies.

Advantages and Disadvantages of using this format are: