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Find out how an advertising agency works: types, departments, and compensation

Find out how an advertising agency works: types, departments, and compensation

The world of advertising is one of the most challenging. It is in constant evolution, because keeping up with the trends of the future and the changes in society is fundamental for a good advertising message. So there are several ways of organizing an advertising agency and this varies over time.

Departments of an advertising agency

Within this constant metamorphosis, it is possible to name the main departments that an agency may contain.

Contact Department

The Contact Department is the “front door” of an agency. The members of this department are the “faces” and spokespersons in the agency’s routine, so they must be good communicators and have good interpersonal relationships.

Through their behavior and the way they communicate, the client can get a feel for the culture and “spirit” of the agency.

The contact department’s job is to provide customer service and have a keen sense for identifying customer problems and passing on the best solutions. In the same way, this department transmits the clients’ ideas, demands, and needs to the other departments of the agency, connecting them.

They also manage the budgets for their accounts and need to keep an eye on the agency as a whole so that all work is coordinated with the client’s expectations. Positions in this department may include: account director, account executive, and service assistant.

Strategic Planning Department

In the Strategic Planning Department, the main concept is to use all the knowledge and information obtained to plan strategies that are feasible and at the same time efficient for the customer.

The members of this department need to know the market, the target audience, advertising techniques, the product/service, and the client’s needs deeply in order for their planning to bring effective results.

Upon approval by the customer, those responsible for this area define budgets, goals, and guidelines. They are fundamental in helping creatives make decisions by providing fresh perspectives. Positions in this department may include: the strategic planning director and the planner.

Creative Department

The Creative Department is where the agency’s “stars” are, the artists who, under the command of the Creative Director, are able to materialize the ideas and messages defined by the other sectors. They connect the best attributes of a brand with the desires of the target audience, arousing emotions.

The creatives, often as a duo (Copywriter + Art Director), need to have the ability to exploit creativity and originality to the fullest, while following the business requirements and objectives. In this way they make their creations competitive in the advertising market.

There is no denying the relevance of an advertising campaign for both business and societal issues as a whole, a great example was the #WombStorieswhich was the highlight of the Cannes Lions 2021 edition and took the top prizes, crowning AMVBBDO as the Agency of the Year.

This campaign tells real women’s stories, encompasses several women’s issues that are still little discussed today, and shows in an exciting way how legitimate female freedom and diversity are.

Therefore, in the creative department lies the intellectual property of an agency and is where value is generated. The quality of the work done by the creative has a direct impact on the remuneration the agency can charge. The positions of the creative may include: the creative director, the art director, and the copywriter.

Production Department

The Production Department is responsible for the preparation, follow-up, and control of photographic, graphic, and audiovisual materials.

In many agencies this work is outsourced to specialized agencies. In these cases, the agency plans each material and manages the execution so that all products meet the required quality and the stipulated objectives.

This team can be composed of: graphic producers, audiovisual producers, and programmers.

Traffic Department

The Traffic Department initially managed the information flows within the agency, organizing and directing the tasks of each department according to the defined priorities and deadlines.

However, with the advance of technologies created to facilitate and optimize production processes, project management software began to be used, such as: Trello, Asana, Jira, Basecamp, and Slack. The use of these tools is increasingly important and has proven to be crucial in a time of pandemic and remote working.

Administrative and Financial Department

The Administrative and Financial Departments are indispensable in any kind of company, including advertising agencies.

They organize the agency’s financial and administrative documentation and manage the flow of payments. They are not part of the “core business” but their good performance is fundamental to make the other departments’ projects viable.

Key positions in an advertising agency

It is also important to mention the main positions in an agency: the Marketing Director, responsible for the marketing strategies and for coordinating the campaigns according to the company’s objectives; the Communication Director, a position that has recently developed to communicate with consistency on behalf of big brands, which have a well-consolidated image; the Company Manager, the main decision maker who needs to have a global and critical vision of all sectors to choose the right paths for the business; and lastly, the Product Manager, which is not so common anymore, but when taken on, has great relevance and authority in the marketing-mix of a product.

Types of advertising agency

Agencies can be local independents or even holding companies, for example: Omnicom Group, WPP, Publicis Groupe, Dentsu Aegis Network, Havas Group, and Interpublic Group, which move most of the advertising capital in the world. There is also, a diversity of business models that an agency can fit into.

Full service or 360º agency

A full service or 360º agencyoffers the client that hires it the convenience of having most of the advertising services within the agency itself, uniting above the line with the bellow the line, which optimizes the costs and time of relationship, demand request, and analysis, besides generating a global and synthesized vision of the brand’s advertising situation.

Specialist Agency

A specialist agency brings the most innovative and has a much deeper approach to the services it offers, ideal for companies that want to intensively develop some aspect of their advertising, but not suitable for brands looking for an agency with diverse know-how.

Boutique Agency

In a similar vein, Boutique agencies offer greater proximity and less bureaucracy, but limited resources can interfere with performance.

In house agency

In house agencies, as the name implies, are set up inside the client’s office with the objective of offering exclusive dedication and fast, direct communication. They are recommended for large companies that want to outsource their marketing department and have a large budget.

Consulting Agencies

In turn, consulting agencies have been growing with a different approach. They present complete solutions, as they have relevant budgets and the size to conquer various roles within an account. However, they can run counter to the creative essence of advertising, because they focus on very technical and intensely number-driven solutions.

Types of service of an agency

The portfolio of services of an agency includes: planning, development of advertising to promote brands with campaigns, management of online ads, pieces, promotional strategies and commercial communication, as well as enabling their broadcast and transmission.

Flow of an agency’s work

All the tasks that precede the delivery of an advertising project must go through the client’s request/demand, the elaboration of a strategic plan for the client and of a briefing for the agency’s internal departments, client approval, development of the creative work and productions, analysis, sending for final approval by the client, publication, broadcasting, and analysis/measurement of the results.

Remuneration models of an agency

Agencies also have diverse compensation models. Fee is one of the most common fees around the world, and is nothing more than a periodic agreement, which can be, for example, monthly or annually.

There is also the Media Fee, which is usually a percentage of the amount invested in campaigns, and the Production Fee, which relates to the investment in the production of the campaign materials.

The Success Fee is directly proportional to the defined goals, when these are achieved. There are also timesheets, which is based on the working hours of the members involved, the Mark-up, a multiplier index that is applied to the cost of the service to define the sales price, and overhead, which considers the indirect costs.

But regardless of the compensation model chosen, you need to figure out how to add value. How to stand out in such a saturated environment? Differentiation, unique positioning, originality, customer first(being customer-centric), humanization, proximity are some keywords, after all, the public must be the true beneficiary and the role of advertising is to make sure this is maintained.

We hope you enjoyed this content, also enjoy reading about e-commerce and find out 5 things to know before setting up a sales website.

AGX Editorial Staff
AGX Editorial Staff
agx.digital

We are a team passionate about Digital Marketing and Technology. We are spread across the continents of the world and united by the same passion: sharing knowledge and taking business to another level of results =)

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