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     

Advertising Spending and Quality for Services: The Role of Capacity

In this paper we explore the relations among advertising spending, capacity and quality for services. Data from a sample of New York City restaurants show that mid-quality restaurants spend more on advertising than either high quality or low quality ones, contradicting the usual Nelson-type prediction that advertising spending increases with quality. Also, controlling for quality, restaurants with larger capacities advertise more. We present a model of services to explain these observations. The key features of the model are: (1) capacity constraints, (2) uncertain demand, (3) the presence of both informed and uninformed consumers, and (4) a technological link between capacity and quality. We argue that for services, advertising not only informs consumers, but it also can improve capacity utilization. Given this dual role, advertising is more valuable to firms with larger capacities and higher price-cost margins. The variation of these two elements with quality determines the advertising-quality relation.     

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.     

Advertising agency operating efficiency

This study uses data envelopment analysis to evaluate the operating efficiency of a sample of 41 US advertising agencies, based on their profits and expenditures in six key areas (i.e., payroll to employees, other payroll-related expenses, administrative expenses, space and facilities expenses, corporate expenses, and professional fees). The analyses reveal that, on average, 5% of an agency's budget is wasted, incurring the greatest amount of waste in the administrative and corporate expenses. The tobit model also indicates that professional fees contributed the most agency inefficiency overall.     

广告创意产业的差异化竞争策略

中国广告市场的逆向选择现象是广告公司同质化竞争的必然结果,也是影响广告创意产业竞争力提升的关键因素。本文运用信息经济学的逆向选择理论和企业竞争优势理论,对我国广告市场存在的逆向选择现象、危害及其成因进行深入分析,指出差异化代理是解决广告市场逆向选择问题的根本途径,并具体阐述了广告创意产业差异化竞争的四种策略。     

Are Mergers Beneficial or Detrimental? Evidence from Advertising Agencies1

We study 33 pairs of advertising agencies that merged between 1947 and 1985, comparing each merging pair against two controls: (a) a pair of agencies with combined merger-date billings close to the total billings of the merged unit, and (b) a single agency with similar total merger-date billings. Gross revenues are the dependent variable. Results: Merging firms do worse in the short run than controls. Assuming similar subsequent rates of growth for merging and non-merging firms, a loss of 16 percent of firm value due to merging is implied.     

中国本土广告公司核心竞争力的消解与建构

随着企业营销传播环境的变化以及国际广告集团本土化战略的成功实施,本土广告公司的核心竞争力正在逐渐被消解,经营业务转型与管理创新成为新时期本土广告公司发展的重要关键词。本文重点分析了我国本土广告公司核心竞争力消解的现状及其深层原因,并从业务重构与管理创新的双重维度提出了本土广告公司核心竞争力提升的策略。     

How does a new institution spread? Travel agencies' adoption of the service quality assurance programme

Despite the recognition of service quality as a major advantage in service industries, the travel agency sector in Taiwan has lacked any service quality certification regime that could optimize service provision or reduce customers' transaction costs. Since the introduction of such a quality-assurance programme in Taiwan in mid-2003, local travel agencies have responded differently. With a sample of 167 uncertified Taiwanese travel service operators, this study argues that firm responsiveness to a new institution depends on two distinct motives, rational and normative, and that such relationships are contingent upon CEO's background and market conditions. The results detail the varied responses as a result of rational and normative considerations and highlight the context-dependent nature of the motivation–behaviour relationships. This study yields important implications for quality credentialing bodies regarding how a new institution may diffuse in a field.     

Is empowerment really a contributory factor to service quality?

This article investigates how empowerment of front-line staff affects service quality in mass and technological services. A questionnaire survey and in-depth interviews were conducted. Analysis of the questionnaire data revealed that although there was a moderate association between empowerment and service quality in mass services, the relationship was not statistically significant in technological services. The interview data explain these results and highlight important differences between mass and technological services, both in the type of staff and in the nature of tasks undertaken. Moreover, it was apparent that there were difficulties in implementing empowerment in mass services.     

Electronic and in-person service quality of hybrid services

The service industries have experienced dramatic changes in service delivery format because of fast-paced innovation in information technology. Hybrid services involve service deliveries through conventional and technology-enabled environments, each of which is complementary and non-interchangeable. However, limited research has examined consumer behavior in response to a series of relevant service episodes in different channels at different points in time. In other words, how customers perceive service quality at each service encounter and how the cumulative effect of these perceptions influences customers’ overall service value assessment and satisfaction remain unclear. This study addresses this research gap by investigating the sequential influence of e-service quality on in-person service quality in a hybrid service format in which interpersonal and computer-mediated services coexist but at different points in time. Empirical analysis shows that e-service quality directly and positively affects in-person service quality, which fully mediates the effects of e-service quality on perceived value and customer satisfaction. The sequence of service encounters matters because in-person service quality perception has a stronger effect than e-service quality on customer metrics. Cumulative quality perceptions significantly influence perceived value and overall customer satisfaction. Theoretical and managerial implications are presented in the discussion.     

Japan's demographic revolution? A study of advertising practitioners' views on stereotypes

This article presents results from a survey of advertising practitioners in Japan focusing on their opinions about the communication objectives and stereotypes, specifically the effectiveness of older spokespersons, their general views on older models in advertising and the effectiveness of older models by product category. We find that these opinions are rather positive. The intention to use a larger number of older models is affected by the perceived effectiveness of older spokespersons and the expected increase in older models and client interest. When targeting an older audience, older spokespersons are seen as particularly effective for the product category of health/medical, but for a general audience it is financial services/insurance. Regardless of product category, they are perceived more effective when targeting an older versus a general audience and when targeting aged 50–64 versus 65 plus.     

Intermediary roles in local mobile advertising: Findings from a Finnish study

This research examines the intermediary roles that advertising agencies perform between small local advertisers and a mobile advertising service provider. The intermediary roles have been left unexplored, although the agencies have influence on their client's decisions to use new media. A real-life experiment of new mobile advertising system was conducted, and interview data from eight advertising agencies were collected. The findings show that agencies may play three types of roles. In playing connecting, mediating, and inhibiting roles, agencies influence the value created not only for their clients' but also for themselves and the advertising media provider.     

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.     

Preface and Introduction

No abstract available for this article.     

Korean Advertising Practitioners’ Perspectives on Celebrity Endorsement

Practitioners’ perspectives have been neglected to some extent. Research on practitioners’ perspectives is important because it will provide valuable information, especially on how theories have been reflected in practice. The study investigates Korean advertising practitioners’ perspectives on celebrity endorsement in advertising campaigns. By comparing the perspective between advertising practitioners and that from their counterparts on the client side, this study may provide insights into their respective roles in advertising campaigns. This study finding suggests that Korean advertising practitioners consider a celebrity's likeability as the most important criterion when selecting a celebrity endorser. The most important reason why they employ a celebrity endorser is that celebrity endorsement helps generate awareness of the brand. In addition, concerns over celebrity endorsement as well as limitations and suggestions for future research have been discussed.