Chapter 4

interactive agency

An advertising agency that specializes in the creation of ads for a digital interactive medium such as Web pages, CD-ROMs, or electronic kiosks.

full-service advertising agency

An agency equipped to serve its clients in all areas of communication and promotion. Its advertising services include planning, creating, and producing advertisements as well as performing research and media selection services. Non-advertising functions include producing sales promotion materials, publicity articles, annual reports, trade show exhibits, and sales training materials.

general consumer agency

An agency that represents the widest variety of accounts, but it concentrates on companies that make goods purchased chiefly by consumers.

speculative presentation

An agency's presentation of the advertisement it proposes using in the event it is hired. It is usually made at the request of a prospective client and is often not paid for by the client.

advertising agency

An independent organization of creative people and businesspeople who specialize in developing and preparing advertising plans, advertisements, and other promotional tools for advertisers. The agency also arranges for or contracts for purchase of space and time in various media.

Association of National Advertisers (ANA)

An organization composed of 400 major manufacturing and service companies that are clients of member agencies of the AAAA. These companies, which are pledged to uphold the ANA code of advertising ethics, work with the ANA through a joint Committee for Improvement of Advertising Content.

creative boutique

An organization of creative specialists (such as art directors, designers, and copywriters) who work for advertisers and occasionally advertising agencies to develop creative concepts, advertising messages, and specialized art. A boutique performs only the creative work.

media-buying service

An organization that specializes in purchasing and packaging radio and television time.

transit advertising

An out-of-home medium that actually includes three separate media forms: inside cards; outside posters; and station, platform, and terminal posters.

Web design houses

Art/computer studios that employ specialists who understand the intricacies of HTML and Java programming languages and can design ads and Internet Web pages that are both effective and cost efficient.

printer

Business that employs or contracts with highly trained specialists who prepare artwork for reproduction, operate digital scanning machines to make color separations and plates, operate presses and collating machines, and run binderies.

point

In retailing, the place of business. In typography, the measurement of the size and height of a text character. There are 72 points to an inch.

development stage

In the agency-client relationship, the honeymoon period when both agency and client are at the peak of their optimism and are most eager to quickly develop a mutually profitable mechanism for working together.

maintenance stage

In the client-agency relationship, the day-to-day interaction that, when successful, may go on for years.

account executive (AE)

The liaison between the agency and the client. The account executive is responsible both for managing all the agency's services for the benefit of the client and for representing the agency's point of view to the client.

foreign media

The local media of each country used by advertisers for campaigns targeted to consumers or businesses within a single country.

departmental system

The organization of an ad agency into departments based on function: account services, creative services, marketing services, and administration.

integrated marketing communications (IMC)

The process of building and reinforcing mutually profitable relationships with employees, customers, other stakeholders, and the general public by developing and coordinating a strategic communications program that enables them to make constructive contact with the company/brand through a variety of media.

incentive system

A form of compensation in which the agency shares in the client's success when a campaign attains specific, agreed-upon goals.

account planning

A hybrid discipline that bridges the gap between traditional research, account management, and creative direction whereby agency people represent the view of the consumer in order to better define and plan the client's advertising program.

straight-fee (retainer) method

A method of compensation for ad agency services in which a straight fee, or retainer, is based on a cost-plus-fixed-fees formula. Under this system, the agency estimates the amount of personnel time required by the client, determines the cost of that personnel, and multiplies by some factor.

sales promotion department

In larger agencies, a staff to produce dealer ads, window posters, point-of-purchase displays, and dealer sales material.

media

A plural form of medium, referring to communications vehicles paid to present an advertisement to its target audience. Most often used to refer to radio and television networks, stations that have news reporters, and publications that carry news and advertising.

fee-commission combination

A pricing system in which an advertising agency charges the client a basic monthly fee for its services and also retains any media commissions earned.

markup

A source of agency income gained by adding some amount to a supplier's bill, usually 17.65 percent.

centralized advertising department

A staff of employees, usually located at corporate headquarters, responsible for all the organization's advertising. The department is often structured by product, advertising sub-function, end user, media, or geography.

institutional advertising

A type of advertising that attempts to obtain favorable attention for the business as a whole, not for a specific product or service the store or business sells. The effects of institutional advertising are intended to be long term rather than short range.

clearance advertising

A type of local advertising designed to make room for new product lines or new models or to get rid of slow-moving product lines, floor samples, broken or distressed merchandise, or items that are no longer in season.

regular price-line advertising

A type of retail advertising designed to inform consumers about the services available or the wide selection and quality of merchandise offered at regular prices.

sale advertising

A type of retail advertising designed to stimulate the movement of particular merchandise or generally increase store traffic by placing the emphasis on special reduced prices.

regional agency

Advertising agency that focuses on the production and placement of advertising suitable for regional campaigns.

local agency

Advertising agency that specializes in creating advertising for local businesses.

local advertising

Advertising by businesses within a city or county directed toward customers within the same geographical area.

product advertising

Advertising intended to promote goods and services; also a functional classification of advertising.

in-house agency

Agency wholly owned by an advertiser and set up and staffed to do all the work of an independent full-service agency.

direct-mail advertising

All forms of advertising sent directly to prospective customers without using one of the commercial media forms.

art director

Along with graphic designers and production artists, determines how the ad's verbal and visual symbols will fit together.

vertical cooperative advertising

Co-op advertising in which the manufacturer provides the ad and pays a percentage of the cost of placement.

regional advertiser

Companies that operate in one part of the country and market exclusively to that region.

national advertisers

Companies which advertise in several geographic regions or throughout the country.

art studio

Company that designs and produces artwork and illustrations for advertisements, brochures, and other communication devices.

media commission

Compensation paid by a medium to recognized advertising agencies, usually 15 percent (162/3 percent for outdoor), for advertising placed with it.

multinational corporations

Corporationsoperatingandinvestingthroughoutmany countries and making decisions based on availabilities worldwide.

digital interactive media

Electronic channels of communication— including online databases, the Internet, CD-ROMs, and stand-alone kiosks—with which the audience can participate actively and immediately.

creative director

Heads a creative team of agency copywriters and artists that is assigned to a client's business; is ultimately responsible for the creative product— the form the final ad takes.

horizontal cooperative advertising

Joint advertising effort of related businesses (car dealers, realtors, etc.) to create traffic for their type of business.

management (account) supervisors

Managers who supervise account executives and who report to the agency's director of account services

international media

Media serving several countries, usually without change, available to an international audience.

global marketers

Multinationals that use a standardized approach to marketing and advertising in all countries.

classified ads

Newspaper, magazine, and now Internet advertisements usually arranged under subheads that describe the class of goods or the need the ads seek to satisfy. Rates are based on the number of lines the ad occupies. Most employment, housing, and automotive advertising is in the form of classified advertising.

international structure

Organization of companies with foreign marketing divisions, typically decentralized and responsible for their own product lines, marketing operations, and profits.

suppliers

People and organizations that assist both advertisers and agencies in the preparation of advertising materials, such as photography, illustration, printing, and production.

copywriters

People who create the words and concepts for ads and commercials.

electronic media

Radio and television, which may be transmitted electronically through wires or broadcast through the air.

business-to-business agency

Represents clients that market products to other businesses; also called high-tech agency.

independent research companies

Research firms that work outside of an agency. They may come in all sizes and specialties, and they employ staff statisticians, field interviewers, and computer programmers, as well as analysts with degrees in psychology, sociology, and marketing.

independent production house

Supplier company that specializes in film or video production or both.

group system

System in which an ad agency is divided into a number of little agencies or groups, each composed of an account supervisor, account executives, copywriters, art directors, a media director, and any other specialists required to meet the needs of the particular clients being served by the group.

termination stage

The ending of a client-agency relationship.

decentralized system

The establishment of advertising departments by products or brands or in various divisions, subsidiaries, countries, regions, or other categories that suit the firm's needs, which operate with a major degree of independence.

brand manager

The individual within the advertiser's company who is assigned the authority and responsibility for the successful marketing of a particular brand.

pre-relationship stage

The initial stage in the client/agency relationship before they officially do business.

cooperative (co-op) advertising

The sharing of advertising costs by the manufacturer and the distributor or retailer. The manufacturer may repay 50 or 100 percent of the dealer's advertising costs or some other amount based on sales. See also horizontal cooperative advertising, vertical cooperative advertising.cooperative (co-op) advertising

copy

The words that make up the headline and message of an advertisement or commercial.