Recommendation on Hiring an External Advertising Agency - Research Proposal Example

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 A paper "Recommendation on Hiring an External Advertising Agency" reports that it is recommended that XYZ Company should hire an external advertising agency to handle its advertising campaign for it to focus on its core business and minimize the risk…
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Recommendation on Hiring an External Advertising Agency
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Recommendation on Hiring an External Advertising Agency
It is recommended that XYZ Company should hire an external advertising agency to handle its advertising campaign for it to focus on its core business and minimize the risk.
Background/Rationale for the Recommendation
XYZ is a start-up business that is promising in the market due to the steady increase of patronage of its product. To sustain the growth, the company needs to expand its market from its nearby community to the whole metropolis. To succeed in introducing the product in the bigger market, the company however needs to do a marketing campaign such as advertising. Advertising is “the nonpersonal communication of information through various media by business firms "(Tyagi and Kumar 3).
There are two modes of creating an advertising campaign. That is to create an internal marketing department to do the campaign or to hire an external agency that would do the advertising for the company. The recommendation is to hire an external advertising agency to mitigate the risk associated in a failed advertising.
The benefits in hiring an external advertising agency are;
Higher degree of efficacy
Less risky
Will allow the company to focus on its core business
Cost Analysis
The company is on a limited budget because it is still a start-up company. XYZ Company can remedy this shortcoming by resorting to a Limited-Service Advertising agency whereby some of the advertising function such as planning and strategic functions may require XYZ Company’s greater involvement. Unlike in a full service advertising service where the company only need to state its objective, Limited Advertising Agency would require greater involvement ( XYZ would assume a greater responsibility for the strategic function of campaign which is advantageous to the company because it can include inputs which is a very valuable aspect of the campaign since the company knows best its market. In effect, XYZ Company will have the best of both worlds in this approach because its inputs will be guided by a professional that would help determine if the formulated strategy will work or not. Thus, a $15,000 advertising budget for a limited service advertising would suffice.
Risk Analysis
Limited-Service Advertising agency is more appropriate for XYZ Company for a variety of reason. Limited-Service Advertising agency is an advertising agency that supply only one or two basic services such as creative advertising but will also provide strategic planning service ( Hiring a Limited-Service Advertising agency is more appropriate for XYZ Company to mitigate the risk in advertising. Hiring a Limited-Service Advertising agency will avoid an advertising failure due to lack of expertise. The company cannot afford this mistake because it is still a start-up and therefore, it would be best for the company if it will hire professional ad agencies which have records of high degree of success in raising consumer awareness
Creating an in-house advertising agency may be cheaper in the short run because there will be no third party agency that would be charging for their services but this is very risky for several reasons that could make the company fold. These reasons are;
The company has no expertise in doing advertising campaign.
Efforts directed to the advertising campaign will be taken away from efforts to improve core business which will compound the risk for the company.

Time line
1 month for strategic planning
2 weeks market research
2 weeks of evaluating and choosing creative
1 month production of the advertising collateral
1 month advertising campaign
3 days evaluation of the campaign
Next Step
Evaluate the efficacy of the advertising campaign.
Increase inventory in the marketing channel to make the product more available to consumers.
Determine if a follow up campaign is necessary.
Works Cited
C.L. Tyagi, Arun Kumar. Advertising Management. Atlantic Publishers & Dist. 2004
"Advertising agency." : Limited-Service Advertising Agencies. N.p., n.d. Web. 30 May 2014. . Read More
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