Advertising Agencies

Advertising Agencies - Hoovers Industry Overview:...

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Hoover’s Industry Overview: Advertising Agencies Although our popular images of the advertising executive have generally not been positive (the bumbling Darrin Stephens from Bewitched and the conniving Amanda Woodward in Melrose Place , for example), advertising is an important piece of the puzzle in a consumer-driven economy. Advertising agencies are responsible for developing and executing marketing communication for distribution through TV, radio, print, the Internet, and other media. This is often done as part of a unified campaign that highlights a company’s brand or products. In addition to the creative element, these firms manage the campaign’s execution and may also offer some measurement of its success in reaching the intended audience. Larger agencies also provide allied marketing services, including brand development, response marketing, and customer relationship management. Agencies typically make their money on a commission basis. The world’s largest advertising agencies are all units of the five biggest marketing services holding companies. McCann Worldgroup , the #1 agency network globally, is part of The Interpublic Group of Companies , while the leader in the US, JWT , is the flagship agency of UK-based WPP Group . Other world leaders include Leo Burnett (part of Publicis ), BBDO Worldwide ( Omnicom Group ), and Euro RSCG Worldwide ( Havas ). All of these firms operate through dozens, and in some cases hundreds, of offices throughout the world, offering local, regional, and national advertising services. However, there is still plenty of room for smaller, independent agencies, such as Cramer-Krasselt , Doner , and Wieden + Kennedy , to thrive and succeed. While advertisers have become more willing to spend on marketing, they have also started to become wary of mass media campaigns and are demanding more accountability from their ad agencies. This has led to a greater focus on measuring advertising effectiveness and more spending on response marketing efforts, such as direct mail and interactive campaigns. Many of the largest agencies have separate units to specialize in these areas, such as Arc Worldwide (part of Leo Burnett), Tribal DDB ( DDB Worldwide ), and Wunderman ( ). Digital marketing is now the driving force in the industry. Several of the industry's big players have been expanding their digital marketing capabilities through acquisitions. In early 2007, Publicis made headlines when it bought US-based Digitas for $1.3 billion. It also snatched up Business Interactif , an interactive marketing agency based in France, and Communication Central Group (CCG), one of the largest interactive marketing agencies in China (later rebranded as Digitas Greater China). Not to be outdone, WPP bolstered its digital marketing capabilities by acquiring 24/7 Real Media and Blast Radius . Changes in consumer media behavior have also led to recent developments at the agencies and the
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This note was uploaded on 10/19/2008 for the course MKT 531 taught by Professor Maloney during the Spring '06 term at Lehigh University .

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Advertising Agencies - Hoovers Industry Overview:...

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