Media agency (media agency) – an information or advertising agency
If we mean an advertising agency, then it is engaged in planning the placement (media planning) and placement (media buying) of advertising in the media (on TV, radio, outdoor advertising, the press, on the Internet, etc.). Until the 1950s, most advertising agencies were full-service agencies – they invented ads and hosted them themselves. Later, the market was partially diversified – creative agencies (advertising creation) and media (advertising placement) appeared on the market. [source unspecified 4183 days], for example, the media departments of D’Arcy and Leo Burnett were transformed into the Starcom Mediavest group, and the media departments of BBDO, DDB and TBWA were formed into the media agency OMD.
The global volume of the advertising market in 2008 amounted to about USD 500 billion. This amount is comparable to the US military budget, the volume of gold and foreign exchange reserves of the Bank of Russia, as well as the amount that the world economy lost from the crisis.
The seven largest advertising and communication holdings in the world are as follows:
- WPP Group (UK)
- Omnicom Group (USA)
- Interpublic Group (USA)
- Publicis Groupe (France)
- Dentsu (Japan)
- Aegis (UK)
- Havas (France)
In Russia? Currently, advertisers spend about $ 11 billion annually on advertising (data from the independent international consulting company RECMA). The three largest media agencies in Russia are as follows (the annual rating of the Kommersant newspaper): Starcom Russia (VivaKi Russia), Vizéum (Aegis Media), ZenithOptimedia Russia (VivaKi Russia).
The WPP Group advertising and communication holding from 1971 to 1985 was called Wire and Plastic Products and traded in plastic baskets. In 1985, Martin Sorrell bought it and used it as a platform to create his future advertising holding (the entrepreneur needed a holding company).
In 1935, the founder of the Publicis Groupe, Marcel Blestein Blanchet, buys Radio LL and forms the private Radio Cite on its basis. For the French radio industry, this deal is historic. It is believed that it was Radio Cite that set the modern broadcasting standards: for the first time, news began to appear every hour; popular artists began to be invited to live programs; there, on the air, radio performances were played. The group used this station as a laboratory, which suggested new forms of constructing an advertising message. The first TV commercial to appear in France is also produced by Publicis. In October 1968 for the Boursin cheese with the participation of the actor Jacques Duby. In 1986, Publicis launches TV6, the first French music television channel. Now this French advertising holding is the 4th in the world and the first in Europe in terms of financial indicators.
Basic services of media advertising agencies
The task of media agencies is to “deliver” a message to a specific audience for which the message was developed.
Media agencies (or media agencies) are advertising agencies that provide services for the planning and placement of advertising campaigns in the mass media (QMS). Media agencies can be “full cycle”, that is, providing a full range of services for the media component of an advertising campaign – from media research and the development of media strategies to placing and evaluating the effectiveness of a specific advertising campaign in all mass media – or specialized. Specialized media agencies usually provide a limited set of media services, or a full range of media services, but for certain QMS.
Services provided by media agencies include:
- marketing and media research (competitor analysis, target audience analysis, media consumption analysis, analysis of the relationship between marketing and media parameters)
- integrated communication planning
- media planning (strategic and tactical)
- negotiations with media partners
- purchase of airtime and space (advertising campaigns) in the media
- administration (control of the budget, contractual obligations, parameters of the campaign implementation) reporting on the campaign (monitoring, post-campaign)
- evaluation of the effectiveness of the campaign (post-campaign)
- econometric modeling of efficiency and other methods of assessing the effect of the campaign
- customer service
Depending on the client’s tasks and the specialization of the media agency, the client can either work with one agency across the entire range of services, or distribute services between several agencies (for example, with the separation of planning and negotiation-purchasing functions).
The main forms of remuneration for media agencies
The choice of the form of remuneration for a media agency depends on many factors.
- business tasks assigned to the agency
- set of services provided
- geography of cooperation
- level / degree of professionalism of the client team
- the duration of cooperation between the advertiser and the agency
Since each business situation is unique and the conditions for interaction between the advertiser and the agency differ in a fairly wide range, the definition of one or another agency remuneration system also requires an individual approach. The examples and recommendations below are based on the most common approaches in the market for determining agency remuneration.
The main forms of remuneration for media agencies accepted in the market are:
- Agent commission
Calculated as a percentage of the allocated budget
- Fixed agency fee (fi)
Calculated based on the cost of the team and additional costs for servicing the order for the period of cooperation
- Combined reward scheme
A commission is set for some of the advertiser’s projects, calculated as a percentage of the budget (for example, for the purchase budget), while the other part of the work is compensated according to a fixed remuneration scheme (for example, planning)
- Bonus reward scheme
The bonus is determined in addition to one of the selected approaches in clauses 1-3, according to the results of the agency’s work for the reporting period (as a rule, for a year or for a campaign)