Advertising Agency

  • Post last modified:18 November 2020
  • Reading time:7 mins read

What is Advertising Agency?

Advertising agency is an independent organization that provides one or more specialized advertising and promotion related services to assist companies in developing, preparing, and executing their advertising and other promotional programs.

Most large and medium-sized companies usually use an advertising agency. Probably the main reason why companies use outside ad agencies is that they provide the clients with services of highly skilled specialists in their chosen fields.

Without any regards to who or what we are, all of us are consumers, in this common role we generally do not give much thought to the individuals, and organizations involved in the detailed and complex process that leads to the creations of cleaver advertisements that capture our attention and influence our choice.

Some important players in the system are clients or advertisers, advertising agency, media organizations, marketing communications, and providers of collateral services.


Advertisers (Clients)

Are the key participants in this process? They are the ones who want to communicate with the target audience about products, services, ideas, or causes with persuasive intent. They also provide necessary funds that go into media buying and creating the advertisements.

Clients have the major responsibility of developing the marketing programme and making the final decisions regarding advertising and other promotional aspects. The company may handle most of these functions through its advertising department or by setting up an in-house advertising agency.

For most companies, advertising planning and execution is handling by an outside advertising agency, in the present scenario.


Media Organizations

Media organizations perform a vital function in the advertising communication process by providing information or entertainment to their audience and thereby provide an environment for the advertiser’s message. The media must possess those attributes that attract audiences so that clients and their advertising agencies want to buy space or time with them to reach their target markets with advertising message in a cost effective manner.

Advertising Agency Player
Advertising Agency Player

Another important group of participants includes various services specialists and providers of collateral services. They include direct-response agencies, sales promotion agencies, and marketing research providers, package design specialists, video production houses, printers, and photographers, etc.


Types of Advertising Agency

Different services offered by the types of advertising agency are:

  • Account Management
  • Marketing services
  • Creative services
  • Management and Finance
  • Support services
  • Media buying service
  • Sales promotion services
  • Event management services
  • Public relations services
  • Design studios
  • Website design services
  • Production houses
  • Research companies

Full-service agency

The full service agencies are usually large in size and they offer their clients a full range of services in the area of marketing, communications, and promotions. These include planning, creating, and producing the advertising; media selection; and research.

The full-service agency is composed of various departments, each responsible for providing needed inputs to perform various functions to serve the client.

Such an agency often tends to have five functional areas:

  • Account Management
  • Marketing services
  • Creative services
  • Management and Finance
  • Support services (Other Types)

Account Management

Account services or account management is responsible for the relationship between the agency and the client. One or more account executives are assigned to serve as liaison, depending on the client’s size and the advertising budget.

The account executives job requires a high degree of diplomacy and tact, as misunderstandings may lead to loss of the account. She/he represents the client by explaining the firm’s point of view to all the agency personnel working on the account, and also represents the agency point of view to the client.

The account executive is responsible for gaining knowledge about the client’s business, profit goals, marketing problems, and advertising objectives.

Marketing services

The use of marketing services has dramatically increased in the last couple of decades.

  • Research department: research has gained considerable attention because agencies are most concerned about the need to communicate effectively with the target audience of the client. The research department is maintained by a full-service agency to gather and interpret data for situational analysis, which is useful in developing advertising for their clients.


  • Media department: the responsibility of agency’s media department is to develop a media plan to reach the target audience effectively in a cost effective manner. The staff analyses, selects, and contracts for media time or space that will be used to deliver the ad message.

    This is one of the more important decision areas as a significantly large part of client’s budget is spent on media time/space. Media specialists must considered the media reach and frequency, their rates, and how well the media match the target audiences’ media preferences and habits before actually purchasing the time and space.


  • Sales promotion department: some full-service agencies offer additional marketing services and have departments, such as sales promotion department that specializes in contests, premiums, and POP materials, etc. and PR/publicity department, interactive media departments to create websites for clients. The agency may have specialists in the area of direct marketing and package design.

Creative services

To a large extent, the success of an advertising agency depends on creative service department, responsible for the creation and execution of the advertisements. The creative specialists are known as copywriters.

They are the ones who conceive (formulate) the ideas for the advertisements and write the headlines, subheads, and body copy. They are also involved in determining the theme or basic appeal of the advertising campaign.

Creation of ad message is the responsibility of copywriters and the art department decides how the ad should look. After completion and approval of the copy, layout, illustrations, and mechanical specifications, the ad is handed over the production department; the production department may supervise the casting of actors to appear in the ads. Creation of an ad may take several months and may involve several people.

A major problem with large agencies is handling many accounts and coordinating the creative and production process. The responsibility of traffic department is to coordinate all phases of production and ensure that the ads are completed on time to meet the media deadlines.

Management & Finance

An advertising agency is in the business of providing services and must be managed that way. There is an administrative head and takes charge of functions such as, finance, accounting, human resource, and office management.

Other Types of Agencies

A number of other advertising agencies are also working in the field of specialized services.

  • Media buying service: These are independent agencies specializing in media buying services and have been experiencing strong growth. The advertising media buying has become complex with the increase in specialized media. Clients and ad agencies generally develop their own media strategies and contract media buying services to execute them.

  • Creative boutiques (small shop, esp. fashionable cloths.) Such an agency provides only creative services. These creative boutiques have grown in response to advertisers’ desire to use only the high-quality creative talent of an outside service provider and rest of the functions are completed within the advertisers’ organizations. Many full-service agencies too, subcontract work to creative boutiques when they want to avoid increasing full-time employees or are very busy.

  • Sales promotion services: Such agencies design and manage sales promotion programmes, such as contests, sweepstakes, lucky draws, scratch cards, premium offers, displays and in-house merchandising materials etc.

  • Event management services: These service providers specialize in planning, organizing and managing events on behalf of marketers and brands.

  • Public relations services: Public relation agencies advice marketers about how to manage their relationship with various target groups and build company image and earn their trust in the company. They manage favorable publicity for creating visibility for a brand.

  • Design studios: These firms specialize in offering graphic design services for brands, corporate identity materials, and packaging etc.

  • Website design services: These firms specialize in designing website and online advertising.

  • Production houses: These firms act as suppliers of artists, photographers, producers, film directors, costume designers, and music producers to advertising agencies.

  • Research companies: These research firms conduct market and consumer research, test ad message and advertising effectiveness.

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