Advertising agency

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An advertising agency, often referred to as a creative agency or an ad agency, is a business dedicated to creating, planning, and handling advertising and sometimes other forms of promotion and marketing for its clients. An ad agency is generally independent of the client; it may be an internal department or agency that provides an outside point of view to the effort of selling the client's products or services, or an outside firm. An agency can also handle overall marketing and branding strategies promotions for its clients, which may include sales as well.

Contents

Typical ad agency clients include businesses and corporations, non-profit organizations and private agencies. Agencies may be hired to produce television advertisements, radio advertisements, online advertising, out-of-home advertising, mobile marketing, and AR advertising, as part of an advertising campaign.

History

The first acknowledged advertising agency was William Taylor in 1786. Another early agency, started by James 'Jem' White in 1800 at Fleet Street, London, eventually evolved into White Bull Holmes, a recruitment advertising agency, that went out of business in the late 1980s. [1] [2] In 1812 George Reynell, an officer at the London Gazette , set up another of the early advertising agencies, also in London. [1] This remained a family business until 1993, as 'Reynell & Son,' and is now part of the TMP Worldwide agency (UK and Ireland) under the brand TMP Reynell. [1] Another early agency that traded until recently, was founded by Charles Barker, and the firm he established traded as 'Barkers' until 2009 when it went into Administration.

Volney B. Palmer opened the first American advertising agency, in Philadelphia in 1850. This agency placed ads produced by its clients in various newspapers. [3]

In 1856, Mathew Brady created the first modern advertisement when he placed an ad in the New York Herald paper offering to produce "photographs, ambrotypes, and daguerreotypes." His ads were the first whose typeface and fonts were distinct from the text of the publication and from that of other advertisements. At that time all newspaper ads were set in agate and only agate. His use of larger distinctive fonts caused a sensation. [3] Later that same year Robert E. Bonner ran the first full-page ad in a newspaper. [3]

In 1864, William James Carlton began selling advertising space in religious magazines. In 1869, Francis Ayer, at the age of 20, created the first full-service advertising agency in Philadelphia, called N.W. Ayer & Son. It was the oldest advertising agency in America and dissolved in 2002. James Walter Thompson joined Carlton's firm in 1868. Thompson rapidly became their best salesman, purchasing the company in 1877 and renaming it the James Walter Thompson Company. Realizing that he could sell more space if the company provided the service of developing content for advertisers, Thompson hired writers and artists to form the first known Creative Department in an advertising agency. He is credited as the "father of modern magazine advertising" in the US. [3] Advertising Age commemorated the first 100 years of the agency in 1964, noting that its "history and expansion overseas seems peculiarly to match the whole history of modern advertising." [4]

Global advertising agency

Globalization of advertising originates in earlier days of the twentieth century. American advertising agencies began as the process of opening overseas offices before the two World Wars and accelerated their globalization throughout the latter part of the twentieth century.

McCann, an agency established in New York City in 1902, opened its first European offices by 1927. It was followed up with offices opening in South America in 1935 and in Australia in 1959. [5]

Companies such as J. Walter Thompson adopted a strategy to expand in order to provide advertising services wherever clients operated.

In the 1960s and 1970s, English agencies began to realize the overseas opportunities associated with globalization. [6] Expanding overseas gives potential to wider markets.

In the early 21st century, management consulting firms such as PwC Digital and Deloitte Digital began competing with ad agencies by emphasizing data analytics. As of 2017, Accenture Interactive was the world's sixth-largest ad agency, behind WPP, Omnicom, Publicis, Interpublic, and Dentsu. In 2019, it purchased David Droga's Droga5 agency, the first major consultant acquisition of an ad agency. [7]

Client relationships

Studies show that successful advertising agencies tend to have a shared sense of purpose with their clients through collaboration. This includes a common set of client objectives where agencies feel a shared sense of ownership of the strategic process. Successful advertisements start with clients building a good relationship with the agencies and work together to figure out what their objectives are. Clients must trust the agencies to do their jobs correctly and accordingly with the resources they have provided. Breakdowns in relationships were more likely to occur when agencies felt undermined, subjugated, or even feel they do not have equal status. Traditionally advertising agencies tend to be in a position to take the lead on projects [8] but results are best when there is a more collaborative relationship.

Stronger collaboration happens in situations where a personal chemistry has been established between both parties. Finding out similar likes and dislikes points of view, and even hobbies and passions. Personal chemistry builds with the length of the client relationship, frequency of meetings, and how far mutual respect goes between parties. This was one trait that advertising agencies were perceived to not always have. It was suggested that on occasions media planners and researchers were more closely involved in the project because of their personal relationships with their clients. [9] Successful strategic planning is best when both parties are involved due to the bond between sides by understanding each other's views and mindset.

Involved advertising account planners are seen to contribute towards successful agency-client collaboration. Planners of advertising agencies tend to be capable of creating a very powerful, trusting relationship with their clients because they were seen as intellectual prowess, seniority, and have empathy in the creative process.

Agencies

All advertising agencies are called that because they are acting as agents for their principals which were the media. They were then, and are now, paid by the media to sell advertising space to clients. Originally, in the 18th century, and the first half of the 19th, advertising agencies made all of their income from commissions paid by the media for selling space to the client. [10]

Although it is still the case that the majority of their income comes from the media, in the middle of the 19th century, agencies began to offer additional services which they sold directly to the client. Such services can include writing the text of the advertisement. [10]

Creativity

The use of creativity by agencies is "unexpected" because so much advertising today is expected. This will capture the attention of audiences, therefore the message is more likely to get through. There have been many advertisements that have surprised audiences because it was not normal for them to see that in an advertisement of that nature. The best use of creativity is when the agencies make consumers think about the product or brand. The type of creativity is distinctive communication which is breaking through the clutter. [11]

List of advertising agencies

Largest agencies

The "big six" largest agencies, with their estimated worldwide revenues in quarter three of 2021 were: [12]

  1. WPP, London $4.45 billion
  2. Omnicom Group, New York City $3.43 billion
  3. Publicis, Paris $2.96 billion
  4. IPG, New York City $2.26 billion
  5. Dentsu, Tokyo $2.25 billion
  6. Havas, Paris $668 million

Others

This is a list of notable advertising agencies and holding companies for advertising agencies, with their headquarters' cities indicated.

Asia

Africa

Europe

North America

Related Research Articles

Saatchi and Saatchi is a British multinational communications and advertising agency network with 114 offices in 76 countries and over 6,500 staff. It was founded in 1970 and is currently headquartered in London. The parent company of the agency group was known as Saatchi and Saatchi PLC from 1976 to 1994, was listed on the New York Stock Exchange until 2000 and, for a time, was a constituent of the FTSE 100 Index. In 2000, the group was acquired by the Publicis Groupe. In 2005 it went private.

Omnicom Group Inc. is an American global media, marketing and corporate communications holding company, headquartered in New York City.

WPP plc is a British multinational communications, advertising, public relations, technology, and commerce holding company headquartered in London, England. It is the world's largest advertising company, as of 2023. WPP plc owns many companies, which include advertising, public relations, media, and market research networks such as AKQA, BCW, CMI Media Group, Essence Global, Finsbury, Grey, Hill+Knowlton Strategies, Mindshare, Ogilvy, Wavemaker, Wunderman Thompson, and VMLY&R. It is one of the "Big Four" agency companies, alongside Publicis, The Interpublic Group of Companies, and Omnicom Group. WPP has a primary listing on the London Stock Exchange, and is a constituent of the FTSE 100 Index.

<span class="mw-page-title-main">DDB Worldwide</span> Marketing communication network company

DDB Worldwide Communications Group LLC, known internationally as DDB, is a worldwide marketing communications network. It is owned by Omnicom Group, one of the world's largest advertising holding companies. The international advertising networks Doyle Dane Bernbach and Needham Harper merged their worldwide agency operations to become DDB Needham in 1986. At that same time the owners of Doyle Dane Bernbach, Needham Harper and BBDO merged their shareholdings to form the US listed holding company Omnicom. In 1996, DDB Needham became known as DDB Worldwide.

Razorfish is an interactive agency part of Publicis Groupe. Razorfish provides services, such as, web development, media planning and buying, technology and innovation, emerging media, analytics, mobile, advertising, creative, social influence marketing and search.

<span class="mw-page-title-main">Ogilvy (agency)</span> Advertising agency

Ogilvy is a New York City-based British advertising, marketing, and public relations agency. It was founded in 1850 by Edmund Mather as a London-based agency. In 1964, the firm became known as Ogilvy & Mather after merging with a New York City agency that was founded in 1948 by David Ogilvy.

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Havas Creative, formerly known as Havas Worldwide and Euro RSCG, is a French advertising agency. It is one of the largest integrated marketing communications agencies in the world, made up of 316 offices located in 75 countries. The firm provides advertising, marketing, and corporate communications services.

<span class="mw-page-title-main">TBWA Worldwide</span> American international advertising agency

TBWA Worldwide is an international advertising agency whose main headquarters are in Midtown Manhattan, New York City, United States.

J. Walter Thompson (JWT) was an advertisement holding company incorporated in 1896 by American advertising pioneer James Walter Thompson. The company was acquired in 1987 by multinational holding company WPP plc, and in November 2018, WPP merged J. Walter Thompson with fellow agency Wunderman to form Wunderman Thompson. In October 2023, WPP announced yet another merger in which Wunderman Thompson, along with another group agency VMLY&R, would cease to exist and create a new combined entity named VML. This is to be effective January 1, 2024.

<span class="mw-page-title-main">Publicis</span> French multinational advertising and public relations company

Publicis Groupe is a French multinational advertising and public relations company. One of the oldest and largest marketing and communications companies in the world, it is headquartered in Paris.

<span class="mw-page-title-main">The Interpublic Group of Companies</span> Advertising company

The Interpublic Group of Companies, Inc. (IPG) is an American publicly traded advertising company. The company consists of five major networks: FCB, IPG Mediabrands, McCann Worldgroup, MullenLowe Group, and Marketing Specialists, as well as several independent specialty agencies in the areas of public relations, sports marketing, talent representation, and healthcare. It is one of the "Big Four" agency companies, alongside WPP, Publicis and Omnicom. Phillippe Krakowsky became the company's CEO on January 1, 2021.

<span class="mw-page-title-main">Dentsu</span> Japanese advertising and public relations company

Dentsu Inc. is a Japanese international advertising and public relations joint stock company headquartered in Tokyo. Dentsu is the largest advertising agency in Japan and the fifth largest advertising agency network in the world in terms of worldwide revenues.

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<span class="mw-page-title-main">David Droga</span> Australian businessman

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VMLY&R is an American marketing and communications company specializing in advertising, digital and social media, sales promotion, direct marketing and brand identity consulting, formed from the merger of VML, founded in 1992, and Y&R , founded in 1923. It is a subsidiary of WPP plc multinational advertising and public relations holding company.

The proposed merger of Publicis and Omnicom was a proposed advertising industry merger between Publicis and Omnicom, announced on July 28, 2013. The resulting company would have been called Publicis Omnicom Group, and would have been the world's biggest advertising group with market capitalisation of $35.1 billion, pro-forma revenue of $22.7 billion, and more than 130,000 employees across the world. After the merger, Publicis Omnicom and WPP would have been the largest advertising groups in the world., followed at a distance by Dentsu and Interpublic Group of Companies. The Publicis and Omnicom chief executives heralded the proposed operation as a "merger of equals" saying that Publicis and Omnicom shareholders will each hold about 50 percent of the new group's equity. The group would have had head offices in Paris and New York.

<span class="mw-page-title-main">OMD Worldwide</span> American media communications agency (1996–)

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<span class="mw-page-title-main">VML (agency)</span> American marketing communications agency

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References

  1. 1 2 3 Mackay, Adrian (2004), The Practice of Advertising, London: Butterworth-Heinemann, ISBN   0-7506-6173-9 . p.70.
  2. ↑ "RECORDS OF R.F.WHITE AND SON LTD" (PDF). National Archives. 1983. Retrieved 16 February 2011.
  3. 1 2 3 4 John W. Hartman Center for Sales, Advertising & Marketing History. "Emergence of Advertising in America: Timeline". Durham, NC: Duke University Libraries. Archived from the original on 2011-02-28. 1841 - Volney B. Palmer opens the first American advertising agency, in Philadelphia.
  4. ↑ "J. Walter Thompson & Co. and the 1964 Advertising Age Commemorative Issue". American Marketing Association New York. December 31, 2019. Retrieved December 31, 2019.
  5. ↑ Faulconbridge, James R.; Nativel, Corinne; Beaverstock, Jonathan V.; Taylor, P J (January 2011). The globalization of advertising. Agencies, cities and spaces of creativity. Routledge. doi:10.4324/9780203860892. ISBN   9781135279813.
  6. ↑ Leslie, D A (October 1995). "Global Scan: The Globalization of Advertising Agencies, Concepts, and Campaigns". Economic Geography. 71 (4). Taylor & Francis, Ltd.: 402–426. doi:10.2307/144425. JSTOR   144425.
  7. ↑ Pollack, Judann (2019-04-03). "Behind Accenture's groundbreaking Droga5 deal". Ad Age. Retrieved 2022-05-04.
  8. ↑ McArthur, & Griffin. (1997). A marketing management view of integrated marketing. Journal of Advertising Research, 19-26.
  9. ↑ Grant, I., & McLeod, C. (2007). Advertising agency planning conceptualising network relationships. Marketing Management, 429.
  10. 1 2 Mayer, Richard (2005). "Chapter 5: The Advertising Agency". In Mackay, Adrian (ed.). The Practice of Advertising (hardbound) (illustrated, revised ed.). Routledge. p. 70. ISBN   9780750661737.
  11. ↑ Nyilasy, Gergely; Reid, Leonard N. (September 2009). "Agency Practitioner Theories of How Advertising Works". Journal of Advertising. 38 (3): 81–96. doi:10.2753/JOA0091-3367380306. S2CID   143933112.
  12. ↑ "The Ultimate List of Agency Holding Companies & Their Affiliates".
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