The In-House Advertising Agency

This study attempts a comparative analysis of advertisers with in-house agency vs. those using an independent advertising agency. Issues under consideration are:

1. The relationship between the advertisers and the advertising agency.

2. Advertiser's satisfaction with the compensation system, i.e., 15% commission.

3. Evaluation of advertising agency performance, i.e., creative media buying, and other services.

4. The importance of advertising to the company's marketing mix.     

The Role of the Advertising Agency in the Cultural Message Content of Advertisements: A Comparison of the Middle East and the United States

ABSTRACT

This study compared responses of advertising agencies located in the Middle East and the United States to an email survey examining their approach in designing advertisements. The survey examined whether the advertising agency incorporated area-specific cultural values and advertising appeals in the execution of their advertisements. Results indicate that indeed advertising agencies do use, or at least report to use, different cultural values and advertising appeals. Advertising agencies in the Middle East tend to focus more on filial obedience, customs and traditions, loyalty to one's group, honor, and patience. In addition, agencies in the Middle East reported that they tended to portray women in a more modest fashion than their counterparts in the United States.     

Pretesting TV Commercials: Methods,Measures, and Changing Agency Roles

Abstract

Research directors with the largest 200 agencies and advertising executives with the largest 200 advertisers were surveyed to examine their views on the current state of TV commercial pretesting. One-hundred and one agency researchers and 89 ad executives returned completed questionnaires (adjusted response rates of 52% and 49.7%), which asked them 23 closed-ended questions about (1) the methods and measures used to pretest TV commercial executions; (2) the perceived role of the agency versus the client in the selection of pretest methods; and (3) perceived changes in the role of the agency research department in TV commercial pretest research. Of those responding, 18 percent of the agency researchers and 19 percent of the advertising executives indicated that their agencies do not pretest TV commercials for assigned brands. Based on the responses of the 83 agency researchers and 72 advertising executives whose agencies pretest commercial executions, the findings suggest that the role of the agency research department has changed over the past 10 years. Most notably, there has been a proliferation in the use of qualitative methods and measures in TV commercial pretest research.     

Advertising industry evolution: agency creativity,fluid teams and diversity. An exploratory investigation

ABSTRACT

The advertising industry is in a state of flux, where the agency model is evolving alongside todays’ fast paced digital environment. This paper reviews the drivers of change in the industry and explores how creative advertising agencies are evolving and developing their team resources to improve the creative product using the resource based view (RBV) as a theoretical lens. The study adopted a qualitative approach using a key informant strategy with 16 interviews with Creative Directors, Chief Executive Officer’s and Heads of Planning and Account Directors. The findings suggest that agencies who embrace team functional diversity, include external stakeholders and develop team fluidity as a dynamic capability will enhance agency creativity.     

Evans,W. A. Advertising Today and Tomorrow. Great Britain: George Allen and Unwin, 1974

Abstract

This study reports on developments in the international advertising agency business during the 1970s. Findings suggest that U.S. agencies remain the dominant force in international advertising in contrast to the declining performance of U.S. industry in other sectors. Specifically, American agencies have found faster growth in their overseas markets leading to continually larger shares of their total billings; there has been a growing concentration in the international business of U.S. agencies and in the industry internationally; and, the international experience of U.S. agencies has led to a growing penetration of foreign markets, to growth in productivity, and to increasing domestic market power. Results of the study indicate however, that U.S. agencies may be facing increasing challenges from non-U.S. agencies in the future; notably from the West European, Japanese, and some developing countries.     

Client-Agency Relationships

Abstract

The increasing occurrence of client turnover and agency switching among client/agency relationships is of concern to advertising agencies throughout the world. It is proposed that small firms could provide a substantial alternative client base for agencies in order to dampen the impact of uncertainty. This study investigates the perceptions held by owner/managers of small firms toward agencies within New Zealand. We identified two groups of respondents–those who perceived agency contribution to store performance as high and those who perceived it to be low.Significant differences were found between the two group' response ratings on advertising agency services, agency attributes and selection criteria. We conclude by discussing the managerial implications of this study and provide directions for future research in this area     

Reducing Disconnects in the Design Agency-Client Relationship

Abstract

Account turnover for smaller agencies, whether an advertising, marketing research or design agency, is a serious financial drain that absorbs disproportionate CRM and managerial energies. Using a web-based survey developed from in-depth interviews, this empirical study investigates the extent to which smaller graphic design agencies follow the classical decision-making “process” when producing a creative product (an advertisement; a new package design, etc.). The global hypothesis is that the greater the degree of adherence to the steps in the management of the ideal relationship management “process” the greater the perceived satisfaction will be with their clients. Results of the analysis partially support the hypothesis and provide valuable directions for future studies.     

Investigating agency–client relationships in the Polish advertising industry

This paper explores selection and retention factors as perceived among agencies and clients operating in the Polish advertising industry. Initially, a broad review of advertising and marketing literature is presented in the context of those variables perceived to be important for (a) selecting/evaluating ad agencies, and (b) maintaining client loyalty and client retention. Two ad agencies and two advertisers in Poland were approached in order to explore and evaluate the variables in more depth, and as a result 15 key variables emerged that became the focus for the study. A questionnaire was designed and a postal survey was later administered to advertisers and agencies with the intentions of obtaining the views of both parties. Emerging findings of the study indicate that clients tend to focus on sales pitch and factors relating to past performance in recruiting an agency. Results also reveal that there was a close consensus among agencies and their clients concerning the relative importance of retention factors such as quality of service and customer care attributes.     

Market Research and Advertising Strategy in Portuguese Agencies: Perspectives of Professionals

SUMMARY

The advertising campaign development process is frequently described in manuals and textbooks. Nevertheless, the empirical perspective gives us a better understanding of the real world. In this study, we tried to understand, to systematize, and to describe the process of research and strategy in advertising agencies. To accomplish this objective we conducted 25 in-depth interviews with advertising agency professionals in Portugal. Cross-analysis of the statements allowed us to identify 5 themes: research done by the client before providing the brief to the agency, client's brief, information gathering done by the agency, brief's discussion inside the agency, and creative brief.     

What Sells in Romania: Performance or Relationships?

ABSTRACT

The norm for sales organizations is the pursuit of long-term profitability through positive relationships with key accounts. Sales professionals begin and end their activities with the customer in mind, aiming to maximize their relationships over a long period of time. This article examines the association between buyer and seller relationships and customer satisfaction as well as the association between customer service orientation and customer relationships. Findings suggest that the ability to meet customer sales service expectations as well as the existence of positive relationships between buyers and sellers is associated with customer satisfaction. Implications for managers are explored.     

Advertising Agency Philosophies and Employee Risk Taking

Abstract

On the basis of an exploratory survey of executives from a cross-section of U.S. advertising agencies, this article examines the relationship between agency creative philosophies and agent creative risk taking. The natures of both creative risk and agency philosophy are discussed. Multiple measures of risk taking are applied and the findings suggest that agency executives working in agencies with clear identities are more likely to take risks than are those in agencies without such identities (hybrid philosophies), but not for all measures of risk. The extent to which the size of client plays a role also is assessed. After an assessment of the findings, limitations and suggestions for further research are discussed.     

Kennedy,Sherril H., and David R. Corkindale. Managing the Advertising Process. Lexington,Mass.: Lexington,Books, 1976

Abstract

A mail survey was conducted among a sample of account and creative services personnel working in advertising agencies nationwide to determine areas of conflict in working relationships between these two groups. Additionally, respondents were asked to perform the same critical analysis of their colleagues within their own departments. Analysis of responses from 256 agency employees indicate that some disagreement between account management and creative services exists. Creative services personnel tended to be more critical of account management than account managers were of creative people. Results are explained by the differing perspectives of the generalist (i.e., account managers) and specialist (i.e., creative services) that must be brought together in an agency to produce effective advertising.     

How to achieve true integration: the impact of integrated marketing communication on the client/agency relationship

ABSTRACT

Reports from the advertising industry suggest that the pressure to create effective integrated campaigns across the ever-increasing mix of paid, owned and earned media is putting an enormous strain on client/agency relationships. This research identifies the main challenges that an Integrated Marketing Communication (IMC) approach places on this relationship and thereby advances the IMC literature by examining the practical challenges of implementation. Six key issues, developed from academic and industry sources, are presented to advertising experts, through a Delphi study, to stimulate debate and identify areas of agreement. The findings are brought together in a model which presents three main areas that need to be addressed, along with specific recommendations. These topics include the need for clients to provide stronger leadership in defining agency roles and responsibilities, more transparent remuneration systems to encourage teamwork across agencies as well as individual input and an increased emphasis on the strategic contribution from agencies.     

Investment in online advertising and return on sales: Does it pay to outsource the services to an advertising agency?

Abstract

The effect of investing in online advertising on a firm’s financial outcomes can depend on whether or not the development and implementation of advertising campaigns are managed by advertising agencies. Agencies may have experienced professionals or workload to perform these jobs, but the costs are greater. This paper aims to investigate the effects of investments in digital marketing on the financial outcome of a company’s services, comparing whether or not it is outsourced to advertising agencies. The secondary data relates to services advertised and marketed by a firm. We tested the possible moderating effect of outsourcing the service in the relationship between investment in online advertising (Google and Facebook) and return on sales (profit margin), by controlling the effect of covariates. Through four regression analyses, the results showed that outsourcing the service moderates the relationship. Specifically, the higher the amount of advertising investment, the more it pays to outsource the service to an advertising agency in order to generate greater profit margin. But with a low investment value, it does not pay to outsource. This study helps to identify situations in which it pays to outsource digital marketing services to an advertising agency.     

Exploring the relationship between individual values and the customer orientation of front-line employees

Abstract

Because of the nature of services, namely the inseparability of production and consumption, employee behaviours influence customer perceptions of service quality and satisfaction with the service provider. In particular, customer-oriented employees seek to help customers by addressing their needs, and this contributes to the building of customer satisfaction and the development of a relationship. Not surprisingly, research has been investigating the drivers of employees’ customer orientation. This paper examines how individual values influence the customer orientation of front-line service employees, a topic that has been unexplored in extant literature, and this is useful for the selection of employees who match the firm’s service strategy. To accomplish this, the study relies on the Schwartz value theory, which is applied to front-line employees in banking. The findings indicate that both resultant conservation and resultant self-enhancement affect the customer orientation of employees, and that these effects are moderated by job satisfaction and autonomy.     

Competitive Orientations in Professional Services

ABSTRACT

This article presents the results of a study on the competitive orientations of three types of professional service firms: advertising agencies, market research agencies and management consultants. Similarities as well as some differences in orientations were identified among the three groups. Advertising agencies were found to have the strongest competitive orientation. The study also found that firms with higher levels of competitive orientations also had better internal integration and control of the marketing function.     

Perceptions of IMC and organisational change among agencies in South Africa

This paper reports on the development of Integrated Marketing Communications (IMC) in an emerging market, South Africa. It also deals with the organisation of advertising agencies in an IMC environment. A brief overview of IMC is given as well as a review of the organisation of agencies. The study consisted of in-depth interviews of 20 senior advertising agency executives. The results indicate that most agencies are developing their IMC strategies and that it is growing in importance in South Africa. Some recommendations are proposed to enable agencies to become more effective in future.     

Ethical Problems of Advertising Agency Executives

Abstract

A mail survey reports on ethical problems faced by 330 advertising agency executives. The most frequently cited difficult ethical problem is “treating clients fairly.” Creating honest advertisements and representing clients whose products or services are unhealthy OT not needed were also frequently mentioned. Many agency executives reported that such ethical problems affect both their performance and their relationships with co-workers.     

Partner or supplier: An examination of client/agency relationships in an IMC context

There is growing evidence from practitioners that the advertising industry is in a state of crisis. As campaigns become more integrated and multi-disciplinary, the relationship between advertising agencies and clients is being tested to its limits and is presently considered to be at an all-time low. Agencies feel less valued and are being excluded from C-suite discussion. Clients feel that agencies do not appreciate the changing landscape and how the customer experience is now key. Both sides recognise the need for more trust and collaboration. This study applies the agency theory and the social power theory to understand the pressures that the relationship is under. It looks for evidence that IMC is creating a movement away from a business alliance relationship by comparing qualitative data collected from both agencies and clients, using NVivo to identify themes. The findings identify four themes which illustrate this shift towards a supplier relationship: the client ownership of the customer journey, the lack of a strategic role of agencies, the challenges of agency collaboration and difficulties of agency specialisation.     

Corporate image,loyalty, and commitment in the consumer travel industry

Abstract

This article examines the impact and interrelationship of corporate image, satisfaction, and commitment on customer loyalty in the travel industry. A corporate image–commitment–loyalty model was developed and tested. Partial least squares (PLS) was used to test the direct and indirect linkages between the four variables, and an alternative model was proposed. The tourism and travel industry is highly price sensitive and competitive with low levels of customer loyalty. Customer loyalty is a valuable asset in highly competitive markets, and understanding factors affecting customer loyalty is important to travel agencies who are seeking ways to maintain a strong customer base. The results of a mail survey conducted in New Zealand indicate that corporate image has a positive significant influence on customer commitment and customer satisfaction. Affective commitment is the focal point in the relationship and contributed most in predicting customer loyalty. The influence of customer satisfaction, on the other hand, contributed a much smaller effect. The key implications for travel agencies are build strong emotional bonds with customers and improve corporate image through trust and service delivery.