Structure of Advertising Agencies

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Table of Contents

Introduction
Organizational Structure
Main Departments
Consumer Research
Networking
Global Presence
Conclusion
Works Cited

Introduction

Commercial advertisements are one of the products of the capitalist economy. Their most obvious goal is the persuasion of possible consumers into the purchase of one product or service over others of similar characteristics. As acts of communication, they are manifestations of an ideological discourse that structures social practices. The repetition, reinforcement, and perpetuation of relations within the social grid are guaranteed by the cultural exchange, an exchange that in capitalist societies is one of the commodities and the meanings attached to them. Advertisements, then, represent the vehicle through which commodities become signs (Surmanek 23).

Organizational Structure

Most advertising agencies have a centralized structure. Centralization leads to greater rigidity and more formalized central control. Specialization of tasks by units results in fragmentation and creates problems in communication and coordination. The greater the degree of specialization, the greater the tendency to concentrate on individual functions while losing sight of overall corporate objectives. Thus, in large advertising agencies conflicts may arise among product group, functional, and territorial managers, even though all are preoccupied with marketing (Surmanek 65). Despite protesting cries that marketing specialists are “organization men,” organizations require routines, programs and procedures, and conformity. Among the factors taken into consideration in answering it are the product line, customers, and processors. Traditionally marketing organizations have been hierarchical, with functional groupings based on authority and responsibility. Recently these structural arrangements have changed. Marketing organizations now include more than sales. Moreover, technology, including computer usage, has led to organizations that have developed along horizontal lines (Advertising, Marketing 2008). Departmental structure helps to advertise agencies to deal with a complex environment and solve daily problems. Many advertising agencies thought to dwell on such concepts as the centralization of business management (Surmanek 88). Customer orientation, in contrast, stresses consumer sovereignty, environmental forces, and coordinated marketing systems (Hameroff 73). Because self-managing members are working on permanent teams, the effort and expense involved in changing compensation structures are often justified.

Main Departments

Advertising agencies pay special attention to account management. Auditing and controlling marketing effort, the fourth entrepreneurial function, is essential to assure the effective performance of marketing activities. in advertising agencies, work and focus groups are based on a traditional structure organized around common technical or functional skills and areas of expertise (for example, accounting, finance, or production). Doing so often requires extending team members’ task skills. In organizing workaround processes, organizational boundaries must often be renegotiated. Increasingly, work teams include external customers and suppliers. “Advertising, marketing, promotions, public relations, and sales managers coordinate their companies’ market research, marketing strategy, sales, advertising, promotion, pricing, product development, and public relations activities” (Advertising, Marketing, Promotions 2008).

The reorganization of workaround processes and across boundaries has numerous benefits. For example, multiskilling (the learning of new skills in addition to functional expertise) can result in reduced staffing as fewer workers can perform the same range of tasks. It can create efficiencies through more flexible task assignments. Multiskilling also often leads to lower inventories because there is more effective workflow coordination. It also makes the team more flexible in meeting fluctuating market demand through operational flexibility. Finally, it can lead to a more differentiated response to the needs of particular customer segments and so contribute to strategic flexibility. Multiskilling leads to greater awareness of the whole task and enables the team member to take part in problem-solving, innovation, and strategic thinking. These same benefits do not accrue when tasks and organizations are structured under traditional assumptions of static, independent jobs (Surmanek 55).

The functions of the account management department are to deal with customers and purchases. The actual implementation of the philosophy results in the development of the marketing concept — a firm’s conception of its marketing activities and strategies (Agency Job Descriptions 2008). To implement this conception and create an effective marketing system, the systemic functions must be performed and a marketing mix determined. The main jobs in this department are Account Planner, Strategic Planning Director, Senior Account Planner, Account Coordinator, Account Executive, Account Group Director, Account Supervisor, Assistant Account Executive (Agency Job Descriptions 2008).

In advertising agencies, the focus of most HR departments has been on the individual. Individual accountability and responsibility have been the foundation on which all of the business practices in the United States have been built. Furthermore, accountability in traditional work organizations was vested in those with formal positions—the managers and supervisors. Individual employees showed deference to people in these positions. Reporting structures were vertical and a command-and-control philosophy reigned. Administrative jobs involve Administrative Assistant, Administrative Assistant to the Chairman, Executive Administrative Assistant, Mailroom Clerk, Receptionist, Travel Supervisor (Agency Job Descriptions 2008). Skills such as planning, coordination, personnel functions, quality management, health and safety, and boundary management were the domain of managers. But increasingly, these duties are becoming the domain of teams.

The account planning or strategy department develops advertising campaigns and marketing mix strategies. Managerial responsibility is shifting from individual accountability to collective, mutual accountability. As this has occurred, the notion of self-management has gained acceptance. Self-management grows as the team’s operational tasks are delegated to the team itself. Many different terms have evolved to describe and distinguish varying degrees of autonomy, including self-directed work teams (Hameroff 54). The advertising, conceived of as the total apparatus of daily and periodical publishing, the radio, and, in somewhat different quality and degree, the movie and formal education is ramified interlocking and collusive, but not unified. This distinction must be kept carefully in mind. Most of the residual and fortuitous mercies and benefits that the public at large derives from the system are traceable to the fact that the apparatus of advertising is not unified; it exhibits all the typical conflicts of competitive business under capitalism plus certain strains and stresses peculiar to itself (Jones 22).

The Creative Department develops images and ads themselves. It is responsible for copy-writing services and ads messages (verbal and visual). The impact of a message on consumer behavior, which is governed by intervening variables, determines its marketing effectiveness. Mass communication may essentially reinforce rather than change consumer attitudes and opinions. Such forces as group norms; interpersonal relations; the perception, retention, and selective exposure of individuals; and the impact of opinion leaders, are extremely influential (Agency Job Descriptions 2008). Creative jobs involve Art Director, Assistant Art Director, Creative Coordinator, Creative Director, Graphic Designer, Studio Manager. In this department, as nonmanagers become collectively responsible for managerial duties, basic assumptions about the legitimacy of authority are challenged. Team members may begin to question what gives peers the right to set rules for others. They may have difficulty dealing with authority that does not stem from their position. Rather than depending on a job description and direction from the manager, people work jointly with coworkers to determine what they do. Because personal success depends on collective success, an individual’s fate is tied to coworkers. Feelings of mutual trust and partnership must develop. The organization must help people learn to deal with greater ambiguity, uncertainty, continual change, and collaborative relationships. Both managers and employees in the team-based organization need to adjust to this shift in accountability and responsibility. Advertising copy-writers employed by agencies or advertisers are unmistakably advertising men (Jones 45). Such departments nourish the confidence of the reader and thus increase the value of the publication to the advertisers (Hameroff 76).

The Media Planning department plans media campaigns and controls feedback. Agencies select media subject to the approval of the client. But publishers’ representatives are also in a position to recommend agencies to manufacturers who are about to make their debut as advertisers or to regular advertisers who are thinking of changing agencies (Jones 33). Also, agency space buyers sometimes change jobs. They may go to other agencies or become space salesmen themselves. And space salesmen frequently graduate into agency account executives (Lange 2008). What with one thing and another the agency space buyer is likely to say yes and no–until all the data of his calculus is in hand. It is necessary to sketch this background of intrigue because it is unquestionably a factor in the traffic of advertising where the stakes are large and a decision one way or another can readily be justified on entirely ethical grounds (Ward 66). In addition to recognizing and adapting the assumptions on which they base their practices, HR professionals must also modify those practices to support teams. The practices to be modified cluster in five areas: recruitment and selection; task design; training; evaluation; and compensation (Hameroff 45).

The remarkable feature of advertising agencies is that teams are collectively responsible for an identifiable and substantial part of the work of the organization. To the extent possible, support services are included in the team so that it has the resources necessary to accomplish its goals. Members are multiskilled and dedicated to the team so that they do not have to split priorities. Finally, the team should report as a unit so that members do not have conflicting directions from different managers. The team is responsible for many aspects of its own functioning. For example, it should be able to determine how to apply the team’s resources, strategies for completion of work, and quality monitoring. It should also be responsible for working with internal and external customers (Ward 76). Finally, part of the team’s task should be performance evaluation. Whenever appropriate skill levels and task conditions exist, team members should be involved. in reviewing their own performance and determining their own rewards. “Familiarity with word-processing and database applications is important for most positions. Computer skills are vital because marketing, product promotion, and advertising on the Internet are increasingly common” (Advertising, Marketing, Promotions 2008). If within an identifiable set of activities coordination must occur across different functional areas, then teams should be cross-functional. In cross-functional teams, members can integrate work across disciplines and make trade-offs that require a multidisciplinary perspective. But if the process analysis indicates that an identifiable set of activities occurs within a functional area, then teams should be functional (Scissors 66).

The advertisement itself is the least significant part of this product. The advertisement is an instrument, a tool, and the ad-man is a toolmaker. In using these tools the newspapers, magazines, and radio broadcasters become something other than what they are commonly supposed to be; that is one result. By operating as they must operate, not as they are supposed to operate, these major instruments of social communication in turn manufacture products, and these products are the true end products of the advertising industry (Lange 2008). The most significant product, or result, is the effective dissolution of practically all local or regional, autonomous or semi-autonomous cultures based economically on functional processes of production and exchange and culturally on the ethical, moral, and aesthetic content of such processes. The advertising-manufactured substitute for these organic cultures is a national, standardized, more or less automatic mechanism, galvanized chiefly by pecuniary motivations and applying emulative pressures to all classes of the population (Jones 75).

Creativity and productivity are important attributes of a person, a group of people, or an organization. The balance and focus of an organization on these two attributes determine what an organization can accomplish. Typically, at various stages in the life of an organization or person, there is a natural focus on one or the other. A creative organization is able to bring new, growing things into existence. The roots and current definition of productivity imply for an organization the ability to lead something through bringing it forth or forward. When applied to creativity, a productive organization leads the ideas through some steps; that is, it produces something. Creativity is the driving force of an organization. It causes growth to occur. Without creativity, there can be no productivity. Productivity results from the exploitation of the creativity of an organization (Hameroff 63). The creativity of an organization does not have to totally exist within the organization, however. An organization’s productivity can be built on others’ creativity as a base or through injection for creativity at any point in the productivity process (Scissors 87).

The organizational spans of control can be increased by empowering staff to perform more transactions by eliminating redundancies. Improved data quality reduces further the need for staff effort and supervisory intervention. Improvements in activity throughput reduce timing-related complaints to the benefit of productivity. Most important, the new technologies and strategies achieve the goal of empowering departmental employees and promoting service while preserving and enhancing the central administrations’ control of the institution’s resources (Sissors 41). Personal-selling expenditures have been estimated at approximately three times those of advertising, and are greater than the total of expenditures on all other forms of promotion. Developing an integrated promotional campaign that achieves the best sales-and-profit result is a task of considerable magnitude. The promotional mix helps shape preference and demand curves, implying that a company can affect its own market destiny; demand curves are not given items. Marketing managers are concerned with the elasticity of demand. They want the demand for their product to be less elastic or responsive to price; they also wish to shift the primary demand curve for a product category so that the products’ total potential at various price points increases. Coordination of sales and advertising efforts, however, is a weak area of marketing management. Often sales and advertising managers behave like rivals rather than members of the same marketing team. Lack of coordination affects sales and profits adversely, and both sales and costs can be pushed beyond optimal levels. However, the organizational changes reflected by the marketing-management concept and the brand-manager system are designed to provide more effective promotional campaigns that have a greater market impact (Hameroff 53; Advertising, Marketing, Promotions 2008).

Consumer Research

The agency employee, whether he writes advertising copy, draws advertising pictures, or is concerned with one of many routines, mechanical, and clerical processes of the agency traffic, must be listed as an advertising person; he makes his living directly out of the advertising business. The advertising agency is thus in the somewhat ambiguous position of being responsible to the advertiser whom he is serving but being paid by the advertising, publication, or another advertising medium, his commission being based on the volume of the advertiser’s expenditure. Objection to this commission method of agency compensation has been chronic for years. There are today a few relatively small agencies that operate on a service fee basis (Hameroff 46). But the commission method of compensation has persisted and is a factor in the endless chain of selling that links the whole advertising apparatus. Before the agent is entitled to receive commissions from the various advertising media–magazines, newspapers radio broadcasters, car card, and outdoor advertising companies-he must first be “recognized.” To secure recognition he, therefore, presents to each of these media groups, which maintain appropriate trade committees for this purpose, evidence that he is financially responsible and controls the placing of a certain minimum of the advertising business. The first selling job is therefore that of the agent in “selling” his competence and responsibility to the organized media. When recognition is once granted, however, the agent steps into the buyer’s position in respect to the media. His duty is then to his clients, the advertisers. In return for the commission paid by the media which has been more or less stabilized at 15 percent less a two percent discount for cash, which is passed on to the client the agent is expected to prepare effective advertising properly co-ordinated with manufacturing and sales tactics, and place it in the media most effective for the purpose (Scissors 154).

Marketing communications serve four basic management purposes. First, the bridge information gaps existing among manufacturers, middlemen, and customers. Second, they help coordinate the promotional activities of the total marketing system to achieve a coordinated thrust. Third, they help adjust the system to the customer and consumer requirements. Fourth, they adjust and help in adjusting the product to customer needs (Scissors 74). The task of marketing communications is to get people or markets to progress from a state of unawareness, or even negative reaction, to one of positive action. The stages in this progression are unawareness, awareness, comprehension, conviction, and action (Hameroff 99). Each team should identify a set of critical measures representing a combination of results and process-oriented outcomes. Focusing only on results (for example, return on sales, revenue growth, and so on) does not help inform the team about which behaviors should be adjusted. Process measures (time spent per call, days before call returned, and so on) identify key behaviors that the team can change in order to improve results. Teams should avoid developing too many measures. If a measure is not critical in guiding the team’s behavior, then discard it. Most experts recommend that teams track six to ten performance areas. The link between behavior at one level and performance at another may be uncertain. People are often concerned that they will not get adequate feedback on how they are performing when the focus is on collective performance. Therefore, appraisal systems should assess behaviors that contribute to the performance of other units or other levels within the organization.

Networking

Many advertising agencies establish cooperative alliances to ensure the continuous availability of well-qualified individuals without having to make them permanent employees. This is the case not only for new, small companies but also for the largest and most established. Frequently changing tasks or goals and project-based organizational structures require a fluid workforce. Sharing workers across organizations increases the work-ready labor pool on which an organization can draw. It also provides an advantage in quality control, because the worker does not totally “disappear” after a project is over but instead moves to another organization within the alliance. The benefit of networking is the availability of information and reduced costs of advertising and promotion. Worker participation of this sort is less a formal program than a job characteristic—job autonomy—and is, we suspect, a very common if often overlooked, a form of worker participation in the United States. Very different is worker participation that is organization level, an intervention, mandated, representative, of moderate influence over corporate-level issues, occasional, and unidimensional (Sissors 68). This kind of participation characterizes worker councils or worker representation on corporate boards of directors, committees, and similar groups, and it is more typical in Europe than in the United States. “These managers direct promotions programs that combine advertising with purchase incentives to increase sales. In an effort to establish closer contact with purchasers—dealers, distributors, or consumers—promotions programs may use direct mail, telemarketing, television or radio advertising, catalogs, exhibits, inserts in newspapers” (Advertising, Marketing, Promotions 2008). Sales or advertising managers should not concern themselves with which group gets the biggest budget or is more important to the company. Rather, they should develop the most effective total marketing communications. Both should assess their relative contributions to the total marketing task and view each other as an alternative and supporting communications resource. As alternatives, they present management with different means of cultivating markets. The problem at this level is one of deciding what proportion of the total promotional budget should be allocated to each. Both advertising and selling provide communications with mass markets. But advertising furnishes a one-way channel, and selling can be two-way. Advertising is set, standardized, less adjustable, and impersonal. Personal selling can be tailored to individual situations at a cost (Sissors 81). The marketing philosophy implies a customer orientation as distinguished from a production orientation. Customer-corporate relations become the basis for developing effective marketing systems. The marketing-management functions, market-opportunity assessment, marketing planning and programming, marketing organization and leadership, and marketing control are inherent activities that are necessary to implement the philosophy (Surmanek 98). One reason for the formation of cooperative recruitment alliances has been the increase in the number of small and start-up organizations, which often do not possess sufficient resources to recruit and hire efficiently. By working together, they can purchase more expertise, participate in more activities, and reach a broader applicant market than they can on their own. A second reason for establishing cooperative alliances is to ensure the continuous availability of well-qualified individuals without having to make them permanent employees. This is the case not only for new, small companies but also for the largest and most established. Frequently changing tasks or goals and project-based organizational structures require a fluid workforce. Sharing workers across organizations increases the work-ready labor pool on which an organization can draw. It also provides an advantage in quality control, because the worker does not totally “disappear” after a project is over but instead moves to another organization within the alliance (Sissors 66).

Global Presence

At the end of the 20^th century, advertising agencies introduced a new department aimed to deal with global customers and different countries. Large corporations, especially large American corporations, have always had their eye on international markets in the modern era. In this century, for example, companies like General Motors and Standard Oil started to significantly expand their international marketing efforts after World War I, perhaps taking advantage of European competitors who had been ravaged by a war on their home soil (Sissors 86). Advertising agencies soon opened branch offices in different countries to help the international marketing efforts of these multinational corporations, making it easier to promotionally reach outside the United States with international advertising placement and media buys. However, there were barriers and problems to international marketing. Early efforts were often uncoordinated and scattered. Some countries, especially socialist countries, were impenetrable to advertisers and many other countries often charged significant tariffs and demanded independently created advertising campaigns to match the cultural specificity of the country and its mass media system (Sissors 84).

The development of global markets, global media, global advertising agencies, and global marketers has led to a push toward globalization in marketing: the treatment of the entire planet as one market. Unlike “multinational” advertising, where the marketer shapes individual campaigns for individual cultures, “global” advertising attempts to create one “universal” ad that would work in all cultures. Such efforts benefit the marketer in several ways (Hameroff 34). Advertisers can also strengthen the identity of a particular product brand by a global advertising blitz. One danger is the change in material habits that aggressive marketing may bring. Local peoples may switch from purchasing local foods and products to global products, perhaps altering for the worse their diets and the local economy. This is a danger with both multinational and global marketing. Global advertising strategies, though, create other problems for local cultures. A global strategy is designed to be universal, which often translates to image-oriented advertising rather than more heavily verbal-oriented ads (Sissors 83).

Conclusion

The departmental structure is the best possible method to meet industry demands and the nature of business. Marketing affects the organization in yet another way. Because team functions are dynamic, not clearly sequenced, and dependent on environmental or other process factors, the operations and decisions involved in such processes are particularly suitable to combinations of descriptors like task definitions, workflows, and time charts. Because the popularity of team-based work structures has grown so rapidly, psychologists are still sorting out the issues involved in selecting for effective team membership, and measures of the ability to work in teams are still in the process of development. As goal-directed units, advertising agencies have multiple objectives and the relative importance of their various goals changes. Sometimes goals conflict; but it is desirable for them to be compatible. Since marketing sectors vary, the relative importance of goals must be determined to achieve organization and establish criteria for effectiveness. The goal of profit maximization, often assumed in discussions of economics, may not be the primary organization goal. The classical doctrine is concerned mainly with the anatomy of formal organization and focuses on the division of labor, scalar and functional processes, structure, and the span of control.

Works Cited

Advertising, Marketing, Promotions, Public Relations, and Sales Managers. 2008. Web.

Agency Job Descriptions. 2008. Web.

Hameroff, E. J. The Advertising Agency Business: The Complete Manual for Management & Operation. McGraw-Hill; 3 edition, 1998.

Jones, Ph. J. The Advertising Business: Operations, Creativity, Media Planning, Integrated Communications. Sage Publications, Inc; 1 edition, 1999.

Lange, J. How Advertising Agencies Operate. 2008. Web.

Ward, J. Using and Choosing an Advertising Agency. NTC Publications, 2000.

Sissors, J.Z. Baron, R. Advertising Media Planning. McGraw-Hill; 6 edition, 2002.

Surmanek, J. Media Planning: A Practical Guide. McGraw-Hill; 3 edition, 1996.

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