Chapter 5
_Advertising agencies_
- 1843 volneypalmer
• agent for media, not advertisers
- 1864 - George P. Rowell
• "the johnny applesead of advertising"
• Rowell's American Newspaper Directory
### Printer's Ink?
- Cyrus Curtis
• Curits Publsihing, establishes commission system, this turns agencies into media sales force
- N.W. Ayer & Son was the first advertising agency
• founded 1864 by Francis W. Ayer [who didn't even have a "son"]
• key concept...
• worked for the advertiser [client]
• slogan - "keeping everlastingly at it brings success."
• lasted until 2002
Early advertising effectiveness
- new and improved media vehicles
- growing interest in new products
• food, hygiene, convenience
• services, improved products
- relatively uncluttered media
• fewer ads + ###
[these conditions were ripe for advertising to be successful]
Full-Service Agency Functions
today, "full-service" agencies provide the following:
• account management
• creative
• media planning and media placement (media buying)
• research
many adding "below the line" services - PR, sales promotion, digital/interactive
[note to know these four Agency functions]
U.S. agency business today* *ish
12,436 firms
13,508 establishments
167,422 paid employees
• US Census Bureau, 2006
• probably shrinking in current economy
• still using interns and low-cost new hires
New Your still dominates
• West Coast growth - LA & SF (imported car brands, high tech
• other unique regionals (Portland (Nike), Martin Agency (Richmond)
Major types of agency:
- Mega-agency groups
- Independant groups (national, regaional, and local
- specialized/nich agenices
- ###
1. Mega-agency groups (marin sorrell, chairman WPP)
prompted by mergers and client globalization
financial pressures
service multinational accounts
subsidiaries provide IMC service
pros of mega-agencies:
larger talent pool, negotiating clout, financial rewards, account security, competitive edge, strong partnerships, more services, international link
cons of mega-agencies:
people vs. profit
creativity vs size
conflict of interests
people business
2. national, regional, local
these are independent agencies. there are fewer national agencies - not part of mega-agency groups
regional and local agencies work with smaller clients - usually nearby. it is still relatively easy to start your own small local agency - if you have a client
example: The Richards Group which grew from small design firm. who now have Motel 6, Chick fil-A, Orkin
example: RPA (Rubin Postaer) with major accounts of Honda & Acura.
example: Cramer-Krasselt, offices in Chicago/Milwaukee/Phoenix. Major accounts: career-builder, AirTran.
3. Specialized/Niche Agencies
industries specialists
ethnic agencies
internet agencies (R/GA a digital agency)
creative boutiques and design houses (still a relatively easy way to enter the business with your own firm
example: Wexley School for Girls (Seattle)
a new approach "situational"
giant pushpins promotes Microsoft's live search maps.
other suppliers
- provide "unbundled" services (one part of what an agency does)
- media buying services
- freelancers & consultants
- production companies
- in-house or "house" agencies
- these are agencies owned by clients (examples: Target, Calvin Klein, Gap)
[in teacher's opinion, sometimes, in-house agencies work and be a little self-indulgent]
Advantages&disadvantages
pros: familiarity, specialization, fast service, cost savings, confidentiality.
cons: objectivity, resources, fresh ideas, extra cost & overhead.
