Overview of Advertising
UNIT 4 : ADVERTISING AGENCY-
STRUCTURE AND FUNCTIONS1
Structure
4.0 Introduction
4.1 Learning Outcomes
4.2 Emergence of the Advertising Agency
4.2.1 Global Advertising Agencies
4.2.2 Indian Advertising Agencies
4.3 Organisational Structure of Ad Agencies
4.4 Departments of an Ad Agency
4.4.1 Account Planning
4.4.2 Clie
Client
i nt S
ie Servicing
ervi
erv cing
4.4.3 Cr
rea
e tive
ve D
Creative epartment
Department
4.
.4.4 Production
4.4.4 Prod
o ucttion Department
Dep
ep
partm
men
nt
4.4.5
4. Media
.4.5 Me Planning
edia Plan
nniing
4.55 Leading
Le
eadin Advertising
ng A Agencies
dverrtisiingg Age
enc
ncie World
iees off World
d
4.6
4. Leading
Le
eadin Advertising
ng A dver
erti
tisi Agencies
singg A genc
ge ncie
nc India
ies off Ind
ndia
ia
4.77 Awards
A ds and
ward nd Recognitions
an Recogniti ns in the
itio
io he Ad
th A World
4.88 Let Uss Sum
Le u Up
4.9
4.
.9 Check
C k Your
heck Yoour Progress:
e s: Possible
Progrres Posssi blee Answers
sibl
bl Answ
wer
erss
4.10 Further
ther Readings
4 100 Furt
4. R adings
Re
4.11 Glossary
4 11 Gl
4. Glos
o sary
4.00 INTRODUCTION
INTRO
ODUCT
TION
The world of advertising can not work on a track without the proper working
of an Advertising agency. This agency offers a specialised skill, experience
and knowledge which are very much required to plan, design and execute
an effective advertising campaign. It is a composition of creative people
that has writers, artists, media experts, account executives, producers etc.
The modern advertising agency is a fountain head from where, most of the
advertisements we see, enjoy and hear from various media houses, emerge.
These specialists work as a team to understand the requirements and needs
of an advertiser and develop appropriate strategies and plans. They not only
create but also assist in delivering those creative ideas through proper media
outlets.
The American Association of Advertising Agencies (AAAA) de¿nes Ad
Agency as an independent business organisation, composed of creative and
business people, who develop and prepare and place advertising media for
sellers for their goods and services.
Unit 4 Writer : Dr. Sapna M.S.
88
,In this Unit, we shall discuss in detail, the role, structure and various Advertising Agency : Structure
functions undertaken by the advertising agency to deliver the best in the and Functions
advertising world.
4.1 LEARNING OUTCOMES
After working through this Unit,you should be able to:
Ɣ Understand the importance of Advertising agencies
Ɣ Comprehend their nature of work and activities
Ɣ Analyse the various activities of ad departments
Ɣ Examine their organisational structure
Ɣ Gain idea about leading advertising agencies across the globe
4.2 EMERGENCE OF THE ADVERTISING AGENCY
Originally, before the bona ¿de advertising agencies age
geenciees mam
made de their appearance,
ads were delivered to various media outlets th tthrough
roug
ugh representatives who,
in the early day days
ys of advertising, sold d aand
nd res
resold
sold thtthee spac
space.
ce.
e T Thus
huss wa
hu w
wass th
tthee
humblee bbeginning
eginniing ooff th
he so ccalled
the alled ad aagency.
genccy. T he ¿rst
The ¿rst ad aagency
genc
ncyy date
nc es ba
dates ack
backk
to ass ffar
ar ass 11786,
7866, w
78 henn Wi
he
when W lliaam Taylo
William or ope
Taylor enedd up his of¿
opened f¿ce in
of¿ce in Loondoon, but
London,
was
itt w as Volney
Vol ney B.
olne
ne B Palmer,
Paalmer, who
whoh took
toook forward
forrwardd the
he idea
th ideea across
accrooss the
t e world.
th woorldd.
PPalmer,
alm
mer, op oopened
en
ned d his ad agency y in PPhiladelphia,
hilladellph
p ia America
i , Am merrica in the yyear 1840.
ear 18840.
Hee use to to buy
b y spaces
bu aces from
spac rom thee newspapers
fro w papeers at very discounted
news
ws dissco
c ununtedd rates
tes andd
rate
resold
ressold thehee same sp space
acee to tthe
pac advertisers
he ad dverttissers oon n a higher rat rates,
e , thus ggiving
attes iving a
iv
humble
huumble beg beginning
gin
nni ng ooff th
ning this activity
his actctivityy off sspace selling
pacee selellling anand cocoining
coin
inin
ng of the h tterm
em
er
“Agent”.
“AAgent”. ”.. HHee al
aalso concept
so concep ualised
pt ualalisedd thee aactual Ad,
ctuaal Ad designing,
d, design ning,, aand
ndd ddoing
ngg all tthe
oing he
work
artt wo
w required
rk requi ired by th the client,
he cli e t, andd tthe
ien he ssame
amee way inÀuinÀuencing
Àuen
Àu ci g tthe
ncing creative
he creat tiv
ivee
sside
si de rrequired
equiuire
ui forr ann advertisement.
r d fo advertitisem
ti mentt. M Many the
anyy of thhe agents stastarted
t d tthis
rted his bbusiness
hi usiness
as tthey ffound
heyy fo und it more luc lucrative
lu
ucrat
ativ
ive an
iv and
nd iinteresting,
nterer sting,
re creating
g,, thus cr e tiing ddirectories
rea i eccto
ir t ri
ries with
es w itth
advertising
addve rtisingg rates
v rt rate
ra tess of news
newws papers.
papep rss.
pe
Francis
Fr
F anci Ayer,
ciss Ay
ci Ayer
er,, who wa
er wass jus 220
just
st years
0 year
ye
ear created
a s old crea
ated a fu ll sservice
full ervice
erv advertising
ce adv
dveertiisi
dv sing
ng
agency
agen c called
ency
en calle N.W
l d as N .W
W Ayer an considered
andd Sons, consid der
e ed to be
b one of th the world’s
he worl ld’s
oldest aagencies.
genc
gencie
ies.
4.2.1 Global Advertising Agencies
Tracing back to the history in UK, which has been a major part of the
capitalist economy for centuries, we notice that the advertising space selling
had a humble beginning. It became a major force to pull and organise
advertising agencies for the bene¿t of advertisers. The three forms of
advertisements that emerged in the nascent stage were: Trade Cards, Posters
and Display Advertisement in newspapers. The print ads, especially, got a
complete makeover with the emergence of standardised ad agencies which
revolutionised the way in which the ads were created for the public.
In UK, Thomas J. Barratt, who was working for Pears Soap company started
creating effective campaigns for the company products, which involved
targeted slogans, images and phrases, thus giving a new peek into the
formation of ad agencies in London and major cities of UK. He is credited
with laying the foundation of the modern ad agency concept, that has since
progressed a lot.
89
, Overview of Advertising It was only in the beginning of the 19th century that the agencies started
preparing advertisements and delivering them to the media. Lord and
Thomas, in USA, started hiring copy writers, for producing creative work
in advertising. By then, the agencies had become the focal point of creative
planning, and advertising was very ¿rmly established as a profession.
The initial agencies were considered to be just brokers for the space in
newspapers, but with the well establishment of full service agencies they
even assumed the responsibility for advertising the contents.
David Ogilvy, a British advertising tycoon who founded the famous ad
agency, Ogilvy & Mather, which is one amongst the top global agencies
to this day. He is known as the “Father of Advertising”. Trained at the
Gallup research organisation, he attributed the success of his campaigns to
meticulous research into consumer habits.
4.2.2 Indian Advertising Agencies
B. Dattaram an nd Co
and o, ba
Co, bbased
sed in Bombay (Now Mumbai) claims to be the
oldest existing IIndian
ndian
an aadd agencyy, started way back in 1905. Followed by
agency,
India Ad
Advert tisin
Advertising ng Comp pan
Company ny in 190
907, aand
90
1907, ndd Cal
alcutta Ad
al
Calcutta A veert
rtiising Ag
Advertising Agene cy
Agency y inn
11909,
19 09, annd S.
and .H. Ben
S.H. nsen in
Bensen n 19228. S
1928. l wly andd stea
lo
Slowly adily
y, th
steadily, he In
the Indian
an
n age
g ncciess
ge
agencies
sttar
a ted eentering
started nteri
ringg the ddomain
om
maiin off being
ngg fo
oreiggn oowned
foreign wneed and
nd m an naged
managed. d.
Ma
MManyny agencies
agencnciess su uch as Ogilvy
such Ogil ilvy
vyy andannd Mather,
Maatherr, Hindustan
Hinduduustan Thompson
Thohomp pson
As ssoci
c ates(H
ci
Associates(HTA)HTA A) were formed
forrme
m d in in 1920s
19200s andandd they soon startedd operating in in
Inddia to
India too. M ajor
o ity of them
Majority m fo ffollowed
llowed ed tthe
he footsteps of the foreign agencies
in termsms of thei eiir activi
their viti
vities
ties. In
es
activities. I 11939,
939,
93 9, tthehe ¿ rstt marketing
rs
¿rst mark
ma rket
rk etin
ingg ca
in amp
mpai
campaignaign
ai g fforor tthe
he
“DDaldad ” as an exclusiv
da
“Dalda” ve br
exclusive ran
andd wa
brand wass pl pplanned,and
an
nne
ned,
d,an
d, andd ex
an exe ecutted
executed.ed.. ThThee agen en
nci
cies
agencies e
es
pparticularly
artic
icu
cularly y des signed thee fformat
designed orm
rmatt kkeeping
rm eepi
ee ping
pi n inn mindd tthe
he IIndian
ndia
nd iann ma
ia m rket
market. et. Me
et Merg rger
rg
Mergers erss
er
andd acquisitions
acquis i itions
is n gave rise to many new agencies, thus JWT was renamed
aand
an d launched
launnched ass HTA in India. Ind
ndia
nd iaa. The
Th professional
prof
ofes
of essiion
es onaal growth
gro
rowwth and
wth and the
the demand
d ma
de mandnd ofof
iinputs
nputs
ts iin
n the advev rtisin
advertisingng indudustry
du
industry ry ffastened
assteened
ned th
thee pa
pace
ce lleading
eaadi
ding
ng tto
o th
thee ne
next
xtt lev
vel.
level.
Various Advert
Va tising associations
Advertising asso
soci
so ciatio
ci io
ons aand
ndd gro
oups we
groups were
re formed
for
ormeed which
whic
wh ich brought
ic br ught
brou gh
advertising circuit to a closer knit. By 1950, these associations started
f di
safeguarding h iinterest off the
the h advertising
d ii iindustry.
d Th
The ¿ ¿rst R di
Radio
commercial made its appearance in 1967, which Vividh Bharti aired,
followed by television commercials - all designed by ad agencies. In
1986, Mudra Communications was created which targeted at airing ads on
Doordarshan, the sole TV medium of those days. With the emergence of
satellite television post 1991, the scenario changed and with the growth of
satellite television new promotions and responsibilities of the ad agencies
grew bigger and bigger.
Check your Progress: 1
Note: 1) Use the space below for you answers.
2) Compare your answers with those given at the end of this unit.
1. Fill in the Blanks:
Volney B. Palmer opened his ad agency in _______ in the year ____ .
90
UNIT 4 : ADVERTISING AGENCY-
STRUCTURE AND FUNCTIONS1
Structure
4.0 Introduction
4.1 Learning Outcomes
4.2 Emergence of the Advertising Agency
4.2.1 Global Advertising Agencies
4.2.2 Indian Advertising Agencies
4.3 Organisational Structure of Ad Agencies
4.4 Departments of an Ad Agency
4.4.1 Account Planning
4.4.2 Clie
Client
i nt S
ie Servicing
ervi
erv cing
4.4.3 Cr
rea
e tive
ve D
Creative epartment
Department
4.
.4.4 Production
4.4.4 Prod
o ucttion Department
Dep
ep
partm
men
nt
4.4.5
4. Media
.4.5 Me Planning
edia Plan
nniing
4.55 Leading
Le
eadin Advertising
ng A Agencies
dverrtisiingg Age
enc
ncie World
iees off World
d
4.6
4. Leading
Le
eadin Advertising
ng A dver
erti
tisi Agencies
singg A genc
ge ncie
nc India
ies off Ind
ndia
ia
4.77 Awards
A ds and
ward nd Recognitions
an Recogniti ns in the
itio
io he Ad
th A World
4.88 Let Uss Sum
Le u Up
4.9
4.
.9 Check
C k Your
heck Yoour Progress:
e s: Possible
Progrres Posssi blee Answers
sibl
bl Answ
wer
erss
4.10 Further
ther Readings
4 100 Furt
4. R adings
Re
4.11 Glossary
4 11 Gl
4. Glos
o sary
4.00 INTRODUCTION
INTRO
ODUCT
TION
The world of advertising can not work on a track without the proper working
of an Advertising agency. This agency offers a specialised skill, experience
and knowledge which are very much required to plan, design and execute
an effective advertising campaign. It is a composition of creative people
that has writers, artists, media experts, account executives, producers etc.
The modern advertising agency is a fountain head from where, most of the
advertisements we see, enjoy and hear from various media houses, emerge.
These specialists work as a team to understand the requirements and needs
of an advertiser and develop appropriate strategies and plans. They not only
create but also assist in delivering those creative ideas through proper media
outlets.
The American Association of Advertising Agencies (AAAA) de¿nes Ad
Agency as an independent business organisation, composed of creative and
business people, who develop and prepare and place advertising media for
sellers for their goods and services.
Unit 4 Writer : Dr. Sapna M.S.
88
,In this Unit, we shall discuss in detail, the role, structure and various Advertising Agency : Structure
functions undertaken by the advertising agency to deliver the best in the and Functions
advertising world.
4.1 LEARNING OUTCOMES
After working through this Unit,you should be able to:
Ɣ Understand the importance of Advertising agencies
Ɣ Comprehend their nature of work and activities
Ɣ Analyse the various activities of ad departments
Ɣ Examine their organisational structure
Ɣ Gain idea about leading advertising agencies across the globe
4.2 EMERGENCE OF THE ADVERTISING AGENCY
Originally, before the bona ¿de advertising agencies age
geenciees mam
made de their appearance,
ads were delivered to various media outlets th tthrough
roug
ugh representatives who,
in the early day days
ys of advertising, sold d aand
nd res
resold
sold thtthee spac
space.
ce.
e T Thus
huss wa
hu w
wass th
tthee
humblee bbeginning
eginniing ooff th
he so ccalled
the alled ad aagency.
genccy. T he ¿rst
The ¿rst ad aagency
genc
ncyy date
nc es ba
dates ack
backk
to ass ffar
ar ass 11786,
7866, w
78 henn Wi
he
when W lliaam Taylo
William or ope
Taylor enedd up his of¿
opened f¿ce in
of¿ce in Loondoon, but
London,
was
itt w as Volney
Vol ney B.
olne
ne B Palmer,
Paalmer, who
whoh took
toook forward
forrwardd the
he idea
th ideea across
accrooss the
t e world.
th woorldd.
PPalmer,
alm
mer, op oopened
en
ned d his ad agency y in PPhiladelphia,
hilladellph
p ia America
i , Am merrica in the yyear 1840.
ear 18840.
Hee use to to buy
b y spaces
bu aces from
spac rom thee newspapers
fro w papeers at very discounted
news
ws dissco
c ununtedd rates
tes andd
rate
resold
ressold thehee same sp space
acee to tthe
pac advertisers
he ad dverttissers oon n a higher rat rates,
e , thus ggiving
attes iving a
iv
humble
huumble beg beginning
gin
nni ng ooff th
ning this activity
his actctivityy off sspace selling
pacee selellling anand cocoining
coin
inin
ng of the h tterm
em
er
“Agent”.
“AAgent”. ”.. HHee al
aalso concept
so concep ualised
pt ualalisedd thee aactual Ad,
ctuaal Ad designing,
d, design ning,, aand
ndd ddoing
ngg all tthe
oing he
work
artt wo
w required
rk requi ired by th the client,
he cli e t, andd tthe
ien he ssame
amee way inÀuinÀuencing
Àuen
Àu ci g tthe
ncing creative
he creat tiv
ivee
sside
si de rrequired
equiuire
ui forr ann advertisement.
r d fo advertitisem
ti mentt. M Many the
anyy of thhe agents stastarted
t d tthis
rted his bbusiness
hi usiness
as tthey ffound
heyy fo und it more luc lucrative
lu
ucrat
ativ
ive an
iv and
nd iinteresting,
nterer sting,
re creating
g,, thus cr e tiing ddirectories
rea i eccto
ir t ri
ries with
es w itth
advertising
addve rtisingg rates
v rt rate
ra tess of news
newws papers.
papep rss.
pe
Francis
Fr
F anci Ayer,
ciss Ay
ci Ayer
er,, who wa
er wass jus 220
just
st years
0 year
ye
ear created
a s old crea
ated a fu ll sservice
full ervice
erv advertising
ce adv
dveertiisi
dv sing
ng
agency
agen c called
ency
en calle N.W
l d as N .W
W Ayer an considered
andd Sons, consid der
e ed to be
b one of th the world’s
he worl ld’s
oldest aagencies.
genc
gencie
ies.
4.2.1 Global Advertising Agencies
Tracing back to the history in UK, which has been a major part of the
capitalist economy for centuries, we notice that the advertising space selling
had a humble beginning. It became a major force to pull and organise
advertising agencies for the bene¿t of advertisers. The three forms of
advertisements that emerged in the nascent stage were: Trade Cards, Posters
and Display Advertisement in newspapers. The print ads, especially, got a
complete makeover with the emergence of standardised ad agencies which
revolutionised the way in which the ads were created for the public.
In UK, Thomas J. Barratt, who was working for Pears Soap company started
creating effective campaigns for the company products, which involved
targeted slogans, images and phrases, thus giving a new peek into the
formation of ad agencies in London and major cities of UK. He is credited
with laying the foundation of the modern ad agency concept, that has since
progressed a lot.
89
, Overview of Advertising It was only in the beginning of the 19th century that the agencies started
preparing advertisements and delivering them to the media. Lord and
Thomas, in USA, started hiring copy writers, for producing creative work
in advertising. By then, the agencies had become the focal point of creative
planning, and advertising was very ¿rmly established as a profession.
The initial agencies were considered to be just brokers for the space in
newspapers, but with the well establishment of full service agencies they
even assumed the responsibility for advertising the contents.
David Ogilvy, a British advertising tycoon who founded the famous ad
agency, Ogilvy & Mather, which is one amongst the top global agencies
to this day. He is known as the “Father of Advertising”. Trained at the
Gallup research organisation, he attributed the success of his campaigns to
meticulous research into consumer habits.
4.2.2 Indian Advertising Agencies
B. Dattaram an nd Co
and o, ba
Co, bbased
sed in Bombay (Now Mumbai) claims to be the
oldest existing IIndian
ndian
an aadd agencyy, started way back in 1905. Followed by
agency,
India Ad
Advert tisin
Advertising ng Comp pan
Company ny in 190
907, aand
90
1907, ndd Cal
alcutta Ad
al
Calcutta A veert
rtiising Ag
Advertising Agene cy
Agency y inn
11909,
19 09, annd S.
and .H. Ben
S.H. nsen in
Bensen n 19228. S
1928. l wly andd stea
lo
Slowly adily
y, th
steadily, he In
the Indian
an
n age
g ncciess
ge
agencies
sttar
a ted eentering
started nteri
ringg the ddomain
om
maiin off being
ngg fo
oreiggn oowned
foreign wneed and
nd m an naged
managed. d.
Ma
MManyny agencies
agencnciess su uch as Ogilvy
such Ogil ilvy
vyy andannd Mather,
Maatherr, Hindustan
Hinduduustan Thompson
Thohomp pson
As ssoci
c ates(H
ci
Associates(HTA)HTA A) were formed
forrme
m d in in 1920s
19200s andandd they soon startedd operating in in
Inddia to
India too. M ajor
o ity of them
Majority m fo ffollowed
llowed ed tthe
he footsteps of the foreign agencies
in termsms of thei eiir activi
their viti
vities
ties. In
es
activities. I 11939,
939,
93 9, tthehe ¿ rstt marketing
rs
¿rst mark
ma rket
rk etin
ingg ca
in amp
mpai
campaignaign
ai g fforor tthe
he
“DDaldad ” as an exclusiv
da
“Dalda” ve br
exclusive ran
andd wa
brand wass pl pplanned,and
an
nne
ned,
d,an
d, andd ex
an exe ecutted
executed.ed.. ThThee agen en
nci
cies
agencies e
es
pparticularly
artic
icu
cularly y des signed thee fformat
designed orm
rmatt kkeeping
rm eepi
ee ping
pi n inn mindd tthe
he IIndian
ndia
nd iann ma
ia m rket
market. et. Me
et Merg rger
rg
Mergers erss
er
andd acquisitions
acquis i itions
is n gave rise to many new agencies, thus JWT was renamed
aand
an d launched
launnched ass HTA in India. Ind
ndia
nd iaa. The
Th professional
prof
ofes
of essiion
es onaal growth
gro
rowwth and
wth and the
the demand
d ma
de mandnd ofof
iinputs
nputs
ts iin
n the advev rtisin
advertisingng indudustry
du
industry ry ffastened
assteened
ned th
thee pa
pace
ce lleading
eaadi
ding
ng tto
o th
thee ne
next
xtt lev
vel.
level.
Various Advert
Va tising associations
Advertising asso
soci
so ciatio
ci io
ons aand
ndd gro
oups we
groups were
re formed
for
ormeed which
whic
wh ich brought
ic br ught
brou gh
advertising circuit to a closer knit. By 1950, these associations started
f di
safeguarding h iinterest off the
the h advertising
d ii iindustry.
d Th
The ¿ ¿rst R di
Radio
commercial made its appearance in 1967, which Vividh Bharti aired,
followed by television commercials - all designed by ad agencies. In
1986, Mudra Communications was created which targeted at airing ads on
Doordarshan, the sole TV medium of those days. With the emergence of
satellite television post 1991, the scenario changed and with the growth of
satellite television new promotions and responsibilities of the ad agencies
grew bigger and bigger.
Check your Progress: 1
Note: 1) Use the space below for you answers.
2) Compare your answers with those given at the end of this unit.
1. Fill in the Blanks:
Volney B. Palmer opened his ad agency in _______ in the year ____ .
90
