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Advertising Agency
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Advertising agencies are outside companies that provide for the marketing and advertising needs of other businesses and organizations. Advertising agencies offer a full range of marketing services and advice based on market studies, popular culture and advanced sales techniques. Because they are independent from the client company, they can be objective about a client's promotional needs. |
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Basically advertising agencies produce logos, creating effective and attractive color schemes to draw the consumer's attention to their clients' ads. They also prepare brochures and write descriptive copy for sales materials. New programs, events, and products are also advertised by Advertising agencies. Actually they use assorted forms of media to promote their clients' businesses or organizations, including magazine advertisements, newspaper ads, radio and TV commercials, websites, and even infomercials.
The advertising agency is the second important component of the advertising spectrum. From the business point of view, the financial operations of an advertising agency are very different from those of every other commercial organization. It is an advertiser who appoints an advertising agency to plan, produce and distribute advertisements to help market and sell its products and services. Apart from certain services, for its overall work, the agency receives no payment from the advertiser, whom it serves. It is the media, which constitute the main source of income for the advertising agency. Thus, in the usual business concept, the advertising agency acts as an agent for the media, who pay a commission to the agency. Hence for an advertising agency to function requires a formal 'recognition' from the media. It is with the agency that the media sign a contract for the utilization of the space or the time, as the case may be, and not the advertiser.
Legally it is the advertising agency and not the advertiser that is responsible for all the payments to be made to the media. The major share of its income comes from the media, but the advertising agencies loyalty is to the advertiser. This is a historical development and continues even today. The question has come up in recent years about the validity of this system with the expansion and diversification of the services expected and offered by the advertising agency, most of which have nothing to do with the media and is charged for separately. New developments are also taking place within this system. Media agencies are emerging, which are buying space and time in bulk at special rates and reselling them to the advertising agencies at a higher rate and thus making a profit. Some advertising agencies are also setting up subsidiary media-purchase organizations for this purpose. In this way it is possible to earn more than what is available through the old commission system.
That means that Advertising Agencies are earning lot of money from advertisers through Media, Newspaper, Ads, Broachers etc. So it is clear that there is lot of money in advertising agencies. |
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