Agency structure.
Advertising agencies vary in size from large conglomerates with more than 50,000 employees in offices throughout the world and with media billings in the tens of billions of dollars to local, one‐person agencies in smaller towns with media billings in the thousands of dollars.
Basic functions.
The work in the typical agency is broken into three basic functions: creative, media, and account management. These functions are supported in larger agencies by plans groups and by research, production, traffic, and accounting departments:
The creative function is handled by art directors, copywriters, and creative directors who create advertising. Typically, the account executive will present a client’s advertising problem to the creative group, normally an art director and a copywriter, who will mull it over and then recommend an overall campaign or a single ad or commercial approach. Ideas are often the result of brainstorming among art directors, copywriters, account people, and media people in the agency. The account executive then will present the idea to the client. If the client accepts the approach, the creative people will proceed to create the advertising and arrange for its production.
The media function is carried out by media planners, media buyers, and media directors who evaluate media and place advertising. Planners recommend what media and how much of each should be used. Media buyers evaluate and select which digital platforms, networks, stations, magazines, newspapers, or websites to buy; and they are the people on whom media salespeople typically call on. However, in recent years planners have become more important in the evaluation process and salespeople have been calling on planners more often in order to get ahead of the process.
Media departments and media agencies are organized in various ways depending on the agency. Some are organized by product, and buyers buy all markets around the country and the digital platforms for a certain product or brand. Other agencies organize on a regional basis and have buyers specialize in buying one or more markets for all of the agency’s products. Furthermore, large media agencies usually have buyers who specialize in a particular medium: network television buyers, spot television buyers, radio buyers, print buyers, and digital buyers, for example.
The account management function is carried out by account executives, account supervisors, and management supervisors who are the primary contact people between agency and client. The account management team usually solicits clients and services them once they are signed up.
Digital agencies.
A digital agency is one that specializes in creating and placing advertising in the online media. Large, multinational, conglomerated agencies, such as WPP, typically have divisions that specialize in online advertising. Buying digital advertising, including search advertising, is quite complex and requires special, often highly technical, expertise. With the growth of programmatic buying, there are also media agencies that specialize in buying programmatically, and these are called trading desks. The largest agency holding company, WPP, has a trading desk, Xaxis, that buys programmatically for over 3,000 clients.30
Television bias
In most large‐ and medium‐sized agencies, there is a bias in favor of television in general and network television in particular. A typical large national advertising agency might place up to 40 percent of its total US media dollars in broadcast network television. The reason advertising agencies try to sell the benefits of letting their agency handle the advertising for large users of network television (both broadcast and cable) is because if clients can afford the networks, they will generate large fees, especially production fees for commercials. The media department likes to buy network television because it can spend and administer huge amounts of money with fewer people than it would take to place a similar amount of money in, say, lower‐priced radio advertising.
Moreover, creative people do not get higher‐paying jobs by producing beautiful newspaper ads or static banner ads; they move up the ladder to become high‐paid creative directors by developing a reel of award‐winning television commercials.
However, the network television bias is eroding as television network audiences shrink and as millennials cut the cord of cable television and watch streaming entertainment and sports content on their smartphones and smart TVs connected to the Internet. Furthermore, with digital advertising’s ability to precisely target individual consumers, the appeal of broad‐reach, non‐micro‐targeted television advertising has diminished for many marketers.
Selling to agencies
Advertising and media agencies are typically efficiency oriented and require a service‐oriented (farmer) salesperson who understands and is experienced operating in a numbers‐ and data‐analytics‐oriented selling environment. Most advertising agency buyers do not care much about results; they are experienced specialists who are mostly interested in the type of audience a medium has, price, and responsive service.
Agencies depend on the media for their existence. Their incomes are based to some degree on how much advertising they buy; conversely, the media depend on agency buying decisions for much of their revenue. As a result, agencies and media continually perform a ritualized, arm’s‐length waltz: Agencies try to buy at the lowest prices possible, and the media try to sell at the highest prices possible. This is a good example of an ambivalent, co‐dependent, love‐hate relationship.
A further complication is that agencies tend to be defensive about their accounts because of the tenuousness of agency–client relationships. Although clients and agencies have contracts that normally spell out the financial details of relationships, rarely is a long‐term commitment involved. Agencies will serve their clients because of an advertiser’s trust, faith, and, too often, whim.
Advertisers might drop an agency for a number of reasons: advertiser personnel changes (a new person at the client wants to make a change); new personnel at the agency (the client does not like an agency’s new creative director); agency plunder (agencies target other agencies’ clients); or moving the digital media buying in house. Salespeople who call on agencies must learn to deal with the complex needs and behaviors of agency people, particularly of media buyers.
Media buyers are in the bottom echelon of an agency’s media department. They are typically overworked, unappreciated, and underpaid. They are the agency’s infantry troops slogging through mountains of media research and media proposals. There is little wonder that buyers tend to be defensive, given the pressure under which they work. They are particularly touchy about salespeople calling on their clients.
Calling on clients.
Some media salespeople, especially those from magazines and television networks, frequently make sales calls on both the advertising agency and the agency’s clients with the blessing, or at least the grudging cooperation, of an agency. Generally, the larger the agency, the more secure it is with its relationship with clients. The higher the position of a person in the agency hierarchy, the less that person usually objects to media salespeople calling on the agency’s clients because they hope the salesperson can convince the client to increase the client’s advertising budget. However, buyers, who are far down on the organizational ladder, normally do not like salespeople calling on their clients, especially if it is to complain about a buy or to make waves of any sort.
If you feel it is necessary to stir things up to get your message across to a client, and a buyer has told you not to call on the client, then sell your way up through the agency’s media