Agency or in house advertising - Essay Example

Darla Domke HK Marketing Consultants 25th February Recommendation Related to Developing either In-house Advertising Agency or Outside Advertising Agency ‘I’ll Run for you’ - Situation Assessment Own or Outside Advertising Agency Before coming to the question whether ‘I’ll Run for You’ should pursue outside advertising agency or in-house advertising agency, some critical factors are needed to be considered. These factors will assist the company before and during the formulation of marketing and advertising strategies. After reviewing the case, an analysis has been done which is mentioned in the subsequent sections of this paper. They are: Lack of Expertise in Relevant Field Improved Technological Features such as Graphics, Animation etc Improved and Unique Advertisement Concepts/ Ideas etc Changing Trends in the field of Advertisement Protection from communication mistakes in messages, which are delivered through advertising. Based upon the analysis, it is advisable that ‘I’ll Run for You’ should pursue outside advertising agency. The prior mentioned major reasons reveal that it is not applicable for ‘I’ll Run for You’ to run its own advertising agency. Needs & Resources Since the decision of advertisement responsibility for ‘I’ll Run for You’ is suggested to be an outside advertising agency, therefore no substantial resources are required. If Darla would had been recommended to pursue in-house marketing and advertising campaign then required resources would be considered such as hiring and training of employees, Research and Development etc. However, Darla needs a significant amount of cost to bear in order to make payment to the outside advertising agency. Therefore, the only concern or ‘need’ for Darla is to ensure her company can bear the required amount of upfront cost for outsourcing its advertising. Pros & Cons of In-house Advertising Department Pros: Timeliness; a strong in-house analytics team can provide refresh software models monthly. New business information related to a business or its competitors can quickly be adjusted into these models. Transparency and Consistency; an in-house process of advertisement allows a business to develop, validate and supervise the marketing analytics. Data Assets; A centralized advertising system can evolve over the period to incorporate valuable and new data sources. Enterprise Knowledge; In-house advertising allows a business to advertise in a convenient manner. The advertising department knows all of the information therefore advertisement is performed accordingly. Cons: Hiring and Recruitment; in order to meet the demand of top notch analytic talent, finding and hiring people with right skills can be very expensive as well as challenging. Upfront Costs; if resources are not available at that point of time, an upfront investment in data infrastructure and technology will be required. Time; establishing infrastructure, implementing software systems, hiring appropriate people can take years. It will take even more time to the business to reap the benefits of these investments. Pros & Cons of Hiring Outside Advertising Agency Pros: Better realization of revenues and increased returns on investments Labour cost gets lower and economies of scales are achieved Tapping into a knowledge of innovation Increases quality, delivery and speed of outsourced activities Cons: Chances of loss of control over the business processes of the company Shortcomings in performances Under realization of results and benefits Recommendation ‘I’ll Run for You’ is a start up business. If the company tries to keep every department under its control, then it might lead to an increased cost to the company. Therefore, primarily in order to avoid increased costs, the company must outsource its advertising department. It is recommended that ‘I’ll Run for You’ should relinquish its advertising department to an experienced advertising company, which can perform better professional services. Next Steps Agencies Available to Darla Some major types of advertising agencies available to Darla are: i. Creative boutiques; creative boutiques are those ad agencies which provide only creative services. A business may utilize services of this agency when they need extra creative efforts or when their own employees do not have adequate skills in this regard. ii. Full service agencies; such agencies emphasize upon the long term profits to their clients and in order to do so, such ad agencies deliver full range services in areas of promotions, communication and marketing. iii. Media buying agencies; media buying agencies operate on a large scale. They purchase large amount of media and operate on large space and prolonged time. The most commonly used two medium of media buying agencies are television and radio. Criteria for Selecting Advertising Agency In order to select an advertising agency, Darla needs to collect pertinent information regarding the main players in the advertisement industry. The primary information that needs to be collected about these industry players should base upon the following: Agency location and size Years and experience of the agency Financial position Current clients Product conflict Special skills or area of expertise of the agency Process of payment After collecting the above-mentioned information, Darla needs to give weights to the above-mentioned segments of the selected agencies. The agency that is appropriate in every segment must be selected. Relevant Helpful Experience- Case of Toyota The case of Toyota can be a helpful example for ‘I’ll Run for You’. In 2009, the company fired dozens of its advertising agencies. It hired 250 employees and established its own in-house ad agency. Toyota Motor Corporation (TMC) established two entities in order to make the tasks more specialized. The company had a focus on customer-oriented activities and therefore came up with relevant tactics. The aim of the company was to improve product development as well as sales innovation. The purpose of the in-house ad agency was tracing the needs of its customers accurately and promptly, and then providing prompt feedback to TMC. ‘I’ll Run for You’ can also learn from this example by focusing primarily on its main aims and objectives and then selecting appropriate field by deciding whether it should go for in-house ad agency or outside ad agency. Evaluation of Key Services in Future Performance Review The evaluation of the ad agency can be based upon two major areas; Qualitative and Quantitative. i. Qualitative Areas Qualitative areas explore the efforts of agency devoted in developing, planning and implementing the advertising campaign of its clients. It also measures the degree to which the ad agency has been successful in meeting the requirements of its clients. For a qualitative evaluation, smaller factors such turnaround time, level of creativity, competitive edge, most popular ads, number of achievements are also considered. ii. Quantitative Areas For quantitative assessment of an ad agency, Darla must assess the financial position of the agency. Financial position can be assessed by verifying the expenses and costs, payments made to outside supplier and media, number of hours charged to personnel etc. The higher the cost, the worse is the financial position of the agency. Some examples of the various ideas upon which an advertising agency can be assessed include: Is this agency consistently providing fresh ideas and concepts? Does creative department possess the knowledge about the company’s strategies, markets and products? Does creative department perform well while it is under pressure? Does the creative department control cost in an effective manner? Overall assessment of creative services In-House Agency In-House Agency Activities If Darla goes for in house agency and builds up her own advertising agency, then there are number of activities that she needs to perform all by herself. Some of them include: Establishing technological infrastructure Implementing software systems and other technical installations Hiring technicians for looking after the software and other technical areas Planning and Control Hiring graphic designers for designing and conceptualizing ads Creativity in Ads Hiring creative staff for developing creativity in ads Consistency in developing creative ads Acknowledging financial costs and other expenses Monitoring and Assessing Performance/ Results Target Market and Key Message Darla’s target market consists of all those individuals, families and senior citizens who, somehow, do not get able to perform their day-to-day errands. In order to do so, Darla’s company, ‘I’ll Run for You’ will perform these errands for the people who demand these services. Target market is approximately 60% to 70% of the total society’s population. They key message, which Darla needs to put forward can be stated as a ‘helping hand’. Darla’s company will be rendering services for performing errands of local people and will be charging certain price for delivering these services. Darla can gather a large number of potential customers by using the word ‘your helping hand’ in the slogans of ‘I’ll Run for You’. Position against Competitors The key message stated earlier can be very helpful in setting a distinct position in the industry. The company must set its position in a way that people feel a sense of helpfulness and co-operation from the company. Despite of the fact that the company would be charging a certain price for its services, yet it will help people in a way that they will be giving more time to their kids, family and leisure activities. In order to differentiate itself from its competitors, ‘I’ll Run for You’ can also position itself as a corporate family member of every family, which assists its family member and is available for them whenever they need. Moreover, the company can also position itself through ‘just a single call away’ approach. As soon as the customer rings the company, an attendant is present within the shortest possible time at the doorstep of the customer, in order to ensure that speed and on-time delivery is valued at this company. Medium of Advertisements Television adverts are usually considered as very hasty. ‘I’ll Run for You’ must utilize the print media in order to publish the advertisements. People, usually, read newspapers in the morning and if they see the ad of a company performing their errands on behalf of them, then they can manage their entire day while viewing that ad by deciding which errands today can be done by this company by making just a single call. Therefore, the best medium of advertisement for this company will be print media, including newspapers and local magazines. Works Cited Burrow, J. L., 2011. Marketing. Toronto: Cengage Learning. Drypen, 2009. Evaluation of an Advertising Agency. 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TOYOTA TO FIRE ALL THEIR ADVERTISING AGENCIES – GOING IN-HOUSE. [online] Available at: [Accessed 25th February 2013]. Read More