Advertising agency

While the very term "advertising agency" may seem self-explanatory, it is only on the surface. This term is not only a broad set, which includes more specialized institutions, but it is also something different than the company's marketing department, branding agency or media house. An advertising agency also goes by the name of creative agency which is a type of company that specializes in creating advertising campaigns for products and brands. Advertising can take many different forms such as by print, radio, television, press, mobile, and through internet channels.

According to A Japanese Advertising Agency: An Anthropology of Media and Markets, an advertising agency deals with advertisers to implement ads by developing a media plan, and forming a relationship between the media and advertisers This type of business allows for new brands and products to reach the market in the most effective way possible. It is the job of these agencies to develop, and plan, advertisements with certain specifications that were provided by the outside company. A thing to note is that advertisement agencies are usually independent from the company that hires them, as they are able to provide an outside perspective. Having a trusted advertisement agency work with your company, guarantees recognition and results. Besides creating personalized advertisements, these agencies can be hired in your companies’ sales department in order to help develop certain marketing strategies and promotions. Having this assistance, and combining two forces, allows for an inside, and outside, perspective on what you are trying to sell, and how to sell it

History of Advertising Agencies

A brief history of Advertising Agencies

• 1800s - The first advertising agency was established in the 1800s in the UK. Advertising has always been a part of the world, the industrial revolution really pushed the boundaries of advertising and made it more structured. It was until the 2nd half of the 1800’s that the first American advertising agency was created.
• 1850 - Volney B Palmer opened the first advertising agency located in Philadelphia. This was the start of placed advertisements that were being printed into newspapers.
• 1856 - Mathew Brady a professional photographer used a different typography in a newspaper. This led to the first instance of modern advertising. He promised to create work that consisted of "photographs, ambrotypes, and daguerreotypes." His work was very different from traditional advertisements. Shortly after, the first full-page ad was released in newspapers.
• 1864 - New York, U.S. James Walter Thompson created the first creative department in the world. His idea was that his own company would create projects for other advertising companies.
• 1941 - The first television commercial appeared in the United States during a baseball match between the Brooklyn Dodgers and the Philadelphia Phillies. The advertisement was showing of "Bulova" watches.

Commission Rates for Advertising Agencies

The most common, and the worldwide, standard of payment is 15% of the final billing. This is because advertising agencies do not make money off of their own advertisements. They require the income to fund salaries and other production costs. In some situations, opposing advertisement companies drop prices down in order to steal potential clients.

List of the biggest advertising agencies

Rank	Advertising Agency Name	Revenue (USD Billions)	Headquarters
1	WPP plc	17.34	London, UK
2	Omnicom Group	15.29	New York, USA
3	Publicis	11.39	Paris, France
4	The Interpublic Group of Companies	9.71	New York, USA
5	Dentsu	9.6	Tokyo, Japan
6	Hakuhodo	3.06	Tokyo, Japan
7	Havas	1.71	Paris, France
8	Dentsu Aegis Network	1.48	London, United Kingdom
9	MDC Partners	1.33	New York, USA
10	Publicis Sapient	1.31	Massachusetts, USA

Top 10 Largest Advertising Agencies Worldwide 2020, Top Advertising Agencies according to BizVibe.

Examples of Advertising agency

• BBDO: This is one of the largest advertising agencies in the world. It is owned by Omnicom Group and is headquartered in New York City. It has offices in over 90 countries and employs over 15,000 people. It specializes in creating award-winning campaigns for some of the world's biggest brands such as Procter & Gamble, Visa, Pepsi, Pepsi Max, Unilever, and more.
• Ogilvy & Mather: This is one of the oldest and largest advertising agencies in the world. It is headquartered in New York City and has over 500 offices in 126 countries. The company is owned by WPP plc and specializes in creating campaigns for big brands such as IBM, Nestlé, Coca-Cola, American Express, and more.
• Saatchi & Saatchi: This is a global advertising agency that is headquartered in London. It has more than 200 offices in 70 countries and is owned by Publicis Groupe. It specializes in creating campaigns for some of the world's biggest brands such as Procter & Gamble, Visa, American Express, General Motors, and more.
• DDB Worldwide: This is a global advertising agency that is owned by Omnicom Group. It has offices in over 90 countries and employs more than 15,000 people. It specializes in creating campaigns for some of the world's biggest brands such as McDonald's, Volkswagen, Microsoft, Unilever, and more.
• McCann Worldgroup: This is a global advertising agency that is headquartered in New York City. It has offices in over 130 countries and specializes in creating campaigns for some of the world's biggest brands such as Coca-Cola, Microsoft, Nestlé, American Express, and more.

Advantages of Advertising agency

Many businesses benefit from utilizing the services of an advertising agency, as they offer numerous advantages:

• In-depth knowledge of the industry - Advertising agencies have a detailed understanding of the industry, as they are well-versed in the latest trends, best practices and technological developments. They can use this expertise to develop effective advertising campaigns that will reach the right audience and have the desired impact.
• Creative and innovative ideas - Advertising agencies have the resources and talent to come up with creative ideas that will help promote a product or service. They can create unique ads that stand out and make an impact.
• Cost effective - Advertising agencies are often more cost-effective than creating ads in-house. They usually have access to discounts from media outlets and can negotiate better prices for ad placement.
• Professional Relations - Advertising agencies have established relationships with media outlets, which can make the process of getting ads placed easier and faster.
• Expertise - Advertising agencies have experienced professionals who are knowledgeable about advertising and marketing. They can help guide and advise businesses on how to create effective ad campaigns that achieve the desired results.

Limitations of Advertising agency

An advertising agency has certain limitations that can impede its effectiveness. These include:

• Lack of flexibility: Advertising agencies are often limited in the types of campaigns they can create, as they must adhere to the brand's guidelines and pre-existing marketing strategies.
• Difficult to measure results: It can be difficult to accurately measure the results of an advertising campaign, which means agencies may not always be able to prove their worth.
• Costly: Advertising campaigns can be costly to create and maintain, and they may not always deliver the desired results.
• Limited resources: Advertising agencies often have limited resources when it comes to developing campaigns, which can restrict their creativity and overall effectiveness.
• Limited reach: Advertising agencies may be limited in terms of the audience they can reach, such as only targeting certain demographics or geographical locations.

Other approaches related to Advertising agency

A good advertising agency is not only concerned with creating and executing an effective advertising campaign but also with other important approaches to ensure successful brand marketing. These may include:

• Developing a brand strategy and identity - this involves defining a brand’s message and voice, as well as creating visuals for the brand to help make it recognizable and recognizable to its target audience.
• Developing creative marketing campaigns - this involves creating specific messages and visuals that help target the right audience and market segment.
• Media planning and buying - this involves finding the most cost-effective way to reach the target audience through the different media channels.
• Digital marketing - this involves utilizing digital channels, such as social media and email, to reach the target audience.
• Analyzing and evaluating - this involves tracking the success of the campaigns and analyzing the data to find ways to improve the campaigns.

In conclusion, an advertising agency is responsible for creating and managing effective brand marketing campaigns. This requires a comprehensive approach that includes developing a brand strategy and identity, creating creative campaigns, media planning and buying, digital marketing, and analyzing and evaluating the campaigns.

Footnotes

Advertising agency — recommended articles

B2B social media marketing — Influencer marketing strategy — Public relations in marketing — Digital marketing strategy — Digital media marketing — Outsource marketing — Heavy users — Marketing department — Interactive agency — Named perils

References

• Applegate, E. (2012). Stanley B. Resor and the J. Walter Thompson Company, 1908-1961 In The rise of advertising in the United States history of innovation to 1960 (p. 134), Lanham Scarecrow Press
• Moeran, B (2013) Japanese Advertising Agency: an Anthropology of Media and Markets Routledge
• Newman, L (2020) Watch America’S First TV Ad, Which Aired 75 Years Ago Friday, Slate Magazine
• Ralph, H (1949) The History of an Advertising Agency, N. W. Ayer & Son 1869-1949 p. 185
• U.S. Industrial Outlook (1984)pt. of Docs, U.S. G.P.O, Distributor

Author: Krzysztof Nagaba-Poniatowski