Production in the Advertising Industry

agency networks advertising agencies with branch offices in a number of different cities worldwide

creative persnasion the set of imaginative activities involved in producing and creating advertisements

market research research that has, as its end goal, gathering information that will help an organization sell more products or services

media planning and baying a function of advertising involving purchasing media space and/or time on strategically selected outlets that are deemed best-suited to carry a client’s ad message

creatives or creative personnel people whose work relates directly to the creation of their firm's media materials

market segmentation dividing society into different categories of consumers

It is through their work with their clients that the biggest advertising agencies channel hundreds of millions, even billions, of dollars into various media—a major source of support for American media industries. But the advertising industry does not really spend its money to support media. It spends money to persuade people to buy products, services, or ideas. How does it go about doing that?

The production of persuasive advertising messages goes on with the approval, and often the direct involvement, of executives from the client/advertiser. To ensure that its clients continually understand what the agency is doing for their products, agency heads appoint an account executive for every account. The job of the account executive is to move information between the advertiser and the agency as well as to make sure that all production, distribution, and exhibition activities take place as planned.

Production activities involve the individuals whose work relates directly to the creation of their firm’s media materials; people in the ad industry call such individuals creatives or creative personnel. They include copywriters (who write the words for the ads), art directors (who guide the creation of artwork), print production personnel (who supervise the final production of magazine and newspaper ads), and TV-radio production personnel (who supervise the final production of TV and radio commercials) (see Figure 15.1).

But the work of the creatives does not take place in a vacuum. Copywriters and art directors generally do not concoct a print ad or TV commercial out of just any ideas that come to them. On the contrary, they work hard to determine which ideas will lead target consumers to purchase the product. Typically, a client does not expect that an ad will be directed toward the entire population. For example, a cosmetics company would generally expect its lipstick ads to be directed to women (not men). However, for reasons having to do with the nature of the lipstick or the company’s marketing strategy, company executives may want to advertise a particular lipstick to a few specific groups of women—say, women from 18 to 34 years, or executive women from 18 to 34 years. Dividing society into different categories of consumers is an activity called market segmentation. Agency creatives must understand the segments they are aiming at before they produce their ads. In fact, both when ad agency executives are competing for new business and when they are working on products for current clients, they place a high priority on learning a lot about both the product they are seeking to represent and the audience they are trying to reach. What are the product’s strengths? What do consumers think about it? What kinds of people buy it? Who are the best potential customers? Why do they—or don't they—buy the product?

Answering these questions often requires drawing on the market research func­tion of the ad agency. Such research might involve compiling the results of previous investigations on the product or its competitors. It might involve commissioning original surveys or experiments with potential customers to check the persuasiveness of a new ad or the success of one that already has been introduced to the marketplace. It might involve joining other firms in ongoing “syndicated” studies that inquire about social trends, general product use, media habits, or other characteristics of the American population.

Through these and other approaches, researchers construct detailed portraits of the intended audience and its position within the society at large. Then creatives mix those portraits with their own sensibilities and apply the results to their work.

Table 15.3 Tap Ten Agency Networks, Ranked By 2009 Worldwide Network Revenue

Rank	Agency (Parent]	Headquarters	Worldwide Revenue ($ millions)
1	Dentsu [Dentsu]	New York	3,028
2	McCann World Group [Interpublic]	New York	2,671
3	Young & Rubicam Brands [WPP]	Tokyo	2,651
4	DBB World Communications Group [Omnicom]	New York	2,223
5	Ogilvy & Mather [WPP]	New York	1,754
6	BBDO Worldwide [Omnicom]	New York	1,671
7	TWBA Worldwide [Omnicom]	New York	1,518
8	Euro RSCG Worldwide [Havas]	New York	1,206
9	DraftFCB [Interpublic Group of COS]	New York	1,175
10	JWT [WPP]	Paris	1,119

Note that a portion of revenues of some of these firms come from divisions that carry out public relations and other activities not under the traditional definition of advertising.

Source: Advertising Age. http://adage.com/datacenter (accessed August 26, 2010).

Figure 15.1 Structure of a Typical Advertising Agency

President
Creative services	Account services	Marketing services	Administration
Writers	Account executives	Media planning	Personnel
Art directors		Research	Office management
Print production		Sales promotion	Clerical
TV and radio production			Administration
Web production