ADV318J chapter 2 notes - Chapter 2 - The Structure of the...

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Chapter 2 -- The Structure of the Advertising Industry: Advertisers, Ad Agencies, and Support Organizations (4e) √ 46-7 who s in charge section captures much of current dilemma in the industry. two groups now exerting their power and control: consumers and advertisers. consumers are insisting on convenience and control in the media exposoure (see TiVo as one example). two ways advertisers are flexing their muscles in their relationships with ad agencies? -1.advertisers are scrutinizing their results and switching agencies with little hesitation-ex. Tylenol account johnson and johnson dumped 110$ mil from Saatchi and Saatchi next year tylenol sales improved -verizon put 315 mil of 828 mil advertising budget up for agency competition saying no satisfaction from IPG group -2.GM asked all of its agencies to define overhead costs using standardized components so the corporation could make judgements about the efficiency of its many supplier agencies"flabby organizations that have become more revune models than consumer solutions models" -consumers:insisting on convience and appeal and control of PC,ipod,TIVO-irony is that control makes product branding even more important -agencies struggling with how to indert brands in new environment controlled by consumer 47 Ex. 2.1 new technologies are giving consumers control over when and how they view persuasive messages. in this changing environment, what two technique has Coke opted to use? -placing coke cups on desks of judges in Am Idol for $20 mil, feel radical solution is neccessay no toleration of passive ads, figuring out how to be daily part of consumers lives 47 set against the backdrop of constant industry and consumer transition (change), the adv process and its role as persuasive communication with target audiences has not and will not change -advertising remains steadfastly rooted in persuasive communications directed at target audiences no matter what is happening -attract attention and develop preference for a brand central goal √ 48-52 four major trends affecting the ad/promo industry -- know gist of these sections -The undoing of agency consolidation and globalization - extreme consolidation through 1999-2002, created problems, not profitable -four major groups publicis groupe, omnicon group, interpublic group, WPP group -43% of companies said very important to have 1 agency offer fully integrated services -conflicts of interest,when 2 clients are in same business -analysts say agencies need to consolidate, get rid of money making operation,s, turn what left loose to pursue their own clients Media Prliferation and Consolidation - media consolidation just starting 2003 FCC relaxed rule that restricted media ownership, single comp can now own stations that reach up to 45% of US households, from 35% -FCC voted to lift cross ownership bans ex.same company owning station and paper -IAC web media conglomerate bigger than sites like amazon and ebay 6.2 billion in revenue -new specialzed agencies to sell and manage these new media oppurtunities
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This note was uploaded on 05/04/2008 for the course ADV 318J taught by Professor Murphey during the Spring '07 term at University of Texas at Austin.

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ADV318J chapter 2 notes - Chapter 2 - The Structure of the...

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