This article is about advertising agencies – what are they, where do they come from, reasons why businesses use them and benefits of using them.
Definition of advertising agencies
Advertising agencies are businesses involved in advising businesses on the most effective ways to promote products – goods and services. They are specialists in promotion who offer expensive yet complete promotional strategies.
For a substantial fee, advertising agencies offer specialist services for businesses which do not have its own marketing experts or to those that might be entering a new market for the first time.
Advertising agencies are businesses that specialize in the planning, organization and production of advertising campaigns for other businesses. They produce professional TV advertisements, radio commercials, billboards, posters and so forth based on the requests from their clients.
Growth of advertising agencies
In the market-driven economies where customer is the king, businesses need to promote products in order to sell them. Promotion helps to create the image of the product demanded by customers. It also informs about the product features and specifications as well as persuades consumers to choose one product over another.
With the adoption of market-driven economies in many countries around the world in recent years, promotion spending has grown rapidly. It is because successful promotional campaigns can increase sales and increase market share.
This benefits advertising agencies which can bring in new customers. Not all businesses have strong marketing departments.
These days, there is a strong competition among advertising agencies as companies often change agencies and/or spread their products across a range of agencies.
Reasons for using advertising agencies
A lot of businesses hire an advertising agency to design, produce and carry out advertisements on their behalf.
Advertising agencies perform certain functions regarding promotion which most companies either are not able to do due to lack of expertise or cannot. That is why advertising agencies will:
- Do the market research for the firm against an agreed promotional objective(s).
- Devise the overall promotional plan.
- Design separate advertising campaigns.
- Execute a promotional campaign.
- Select the best medium or media for advertising the product.
- Develop and testing the campaign materials such as TV commercials, radio tracks, printed billboards, etc.
- Apply the funds that the firm has set aside from the marketing budget for the campaign(s).
- Track the outcome of each advertising campaign and report back to the business on the overall success.
Benefits of using advertising agencies
Advertising agencies offer expert advice on how to promote products in the best possible way thanks to their experience, know-how and resources to produce a relatively successful campaign. This can be can be invaluable to a business making the entire promotional campaign cost effective in the end. Other specific benefits include the following:
- Professional market research is carried out where consumer tastes and preferences are established. The typical consumer profile is identified.
- The agency will advise on the most cost-effective advertising media to attract potential consumers.
- Creative designers will devise advertisements appropriate to the target customers and to the media to be used.
- The agency, on behalf of the business, will film or print the adverts to be used in the promotional campaign.
- Public reaction to the campaign will be timely monitored. The business will be informed about the results and any improvements needed to increase effectiveness of future promotion.
In summary, advertising agencies help businesses find the most effective ways to advertise products better so companies can sell more products to customers. Advertising agencies are also more aware of specific legislation affecting advertising such as legal considerations and copyright laws.
