An Advertising agency is an organisation whose business consists in the acquisition of the right to use space of time in advertising media and the administration of behalf of the advertisers of advertising appropriations made by them. It renders advice and creative services for its clients. It does not sell any tangible products, but sells creative talents and past experience. Thus it is an organisation specially created for rendering services in advertising.
The services of an advertising agency in general can be summarized as follows:
- It makes the advertisements pleasant and serves the purpose.
- It can get the advertisements published at the appropriate times.
- It can help the advertiser in the preparation of the advertising budget.
- It can free the advertiser from the botheration of contacting the media owners of all types as and when necessary.
- It can do market research for the advertiser at a lesser cost.
- It can also help the advertiser in designing the trade mark, packages and labels and wrappers for the goods to be sold. It can do all types of jobs connected with the printing work.
- It can do sales promotion work.
- It can design window displays and arrange for a systematic change in the arrangement of the things in the windows from time to time.
Advertising Agencies in Industrial Marketing Scenario
Manufacturers cannot look after all the promotional activities especially under the principle of specialization. Organisations with adequate financial resources set up a separate department for this purpose. Such an arrangement would be beyond the reach of medium or small scale producers. These would hire some specialized people. Advertising is one such field where manufacturers have two options to conduct their advertising for themselves or to hand over the job to a specialist.
Advertising Agency undertakes the specialized job of advertising for and on behalf of others. It has specialized skills and experience that a manufacturer cannot duplicate except at a considerable expense. Even large firms have started depending on advertising agencies because these ‘in the market’. Advertising is a complicated affair and it success primarily depends upon constant advertisement research and media research, etc.
Most of the present day advertising is done by advertising agencies. No manufacturer in fact, is prevented from advertising himself, without the aid of an outside agency. But for them the need for appointing an agency arises because of the following reasons and benefits.
- Reduction in the cost of advertising: The remuneration paid to the agency which is about 15% of the cost of producing and executing the advertisement may appear to increase the total cost of advertisement. But in reality, it is not so. If a firm itself undertakes the advertising job it has to maintain specialized staff. Besides considerable effort and time should be spared. All these finally, read to higher overheads and in fact many time more than the commission payable to the advertising agencies. Thus, the advertising agents help a lot in reducing the advertisement costs.
- Provision of expert services: An advertising agency can appoint expert artists, copy writers and others competent for the job. For it advertising is a routine job and so, it can afford to pay for it. By employing the advertising agency the advertisers can avail the benefit of the skill, experience and knowledge of the agency at a comparatively cheaper cost.
- Selection of a suitable media: Very often the advertisers are not a position to form a rational judgment in the selection of a suitable media. The advertising agent can help the advertiser in the selection of the best media. Proper selection of the media adds effectiveness to the advertising campaign.
- Advertisement in the appropriate time: Advertising agents usually make contracts with the media owners for the use of space or time required on a long term basis. So that enough space or time is at their disposal and they can publish the advertisement readily whenever wanted. But the advertiser has to wait for sometime till the space is provided in the newspaper or the time is provided in the broadcasting. Further the agent can make adjustments in their programme and give priority to any particular advertiser according to their need. Hence, the advertisement can be published at the appropriate time.
- Quick preparation of the advertisement copy: Advertising agents employ artists regularly to draw the advertisement copy. Therefore, whenever a job of advertising is entrusted, the agent can make quick arrangements for the early preparation of the drawings, layouts and get the plates made. But the advertiser has to spare more time and money for approaching the experts in this connection.
- Provision of other services: Modern advertising agencies offer different types of services such as window dressing, market research, sales promotion etc. These take a good amount of time if the advertiser himself does them through his own organisation.
Thus, economy is the principal factor which justifies the need and importance of advertising agencies in the modern advertising system.