Cases in Advertising Management

Larry D Kelley, Donald W Jugenheimer

• Publisher: Routledge
• Year: 2014
• ISBN:
  9781317475330
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

"Cases in Advertising Management" offers a wide range of short, medium-length, and longer cases, all designed to illuminate the topics covered in an Advertising Management course. The book can stand alone, or, for instructors who wish to incorporate a combined casebook and textbook approach, it can be adopted alongside any standard text, including Advertising Management by the same authors.The book features actual real-life cases that reflect current trends in the advertising and promotion industry, with a strong emphasis on digital media and integrated marketing communications. A detailed introduction ('How to Analyze a Case Study') is followed by 30 cases, covering a full range of topics for a semester-long course, including financial management, business planning, strategic planning, budgeting, human resource management, and managing change.

Part I Advertising Management Fundamentals

DOI: 10.4324/9781315705934-1

Case 1 Boswell Agency

Issue: Structuring of an Advertising Agency

Case 2 The Leaky Oil Company

Issue: New Business Trade-off

Case 3 Prime Media

Issue: Global Expansion

The fundamentals of advertising management are similar to those practiced in running any other business. You have to bring people together for a common goal; organize your workplace, lead the charge, and always be looking to the future. Advertising is no different from other businesses in that respect.

Advertising differs from other businesses, however, in that it is a unique blend of people. So, while advertising is categorized as a professional services business, it is much different from the accounting or the legal profession, for instance. The closest profession to advertising is that of architecture where business and creative elements intersect. That is what makes advertising an unusual and exciting business. It also brings with it management challenges.

Organizational Structure

Every business, including every advertising agency, has its own unique organization. There are advertising holding companies that manage a myriad of communications companies including advertising agencies, interactive agencies, public relations firms, consulting firms, and a wide variety of specialty companies. There are many advertising agencies that are privately held and there are many in-house advertising groups that service a specific organization.

In the advertising agency world, there are two major themes used in agency organization. The first is the departmental organization. This is where various advertising functions are grouped together in departments. For example, there may be a research department, media department, creative department, production department, and account management department. Work flows from one department to another.

In the department structure, the workers are specialists in a certain activity. Some are copywriters and work in the creative department. Others are media specialists who may be media planners or media buyers. In fact, large media agencies have a variety of specialists that include network television buyers, interactive buyers, and print buyers, among others. The advantage of the department structure is that many of the workers work on a variety of accounts. This helps the agency manage workload and it provides new types of work so that the agency team doesn’t get stale.

The second type of organization is the account team. In this case, the agency is organized into small teams of specialists who work only on a single account or similar accounts. It is like having a small agency within the larger agency. Obviously, this is how the in-house agency is set up. The advantage of the account team setup is that teams become accustomed to working together and know the account very well. The downside is that work can ebb or flow and that the staff isn’t exposed to other thinking.

The role of management is to establish the right structure for the organization. The goals are to make it productive in terms of its ability to do quality work, as well as to generate a reasonable profit. It is the management’s duty to ensure that each of these goals is met and to properly balance the need for talent and workload with the necessity of being profitable.

Leadership

In the advertising business, leadership opportunities occur in the management of most advertising functions. A good creative director, research director, or media director at an advertising agency must be a good leader. The role of the account manager is to be the leader of an account. Their entire role is that of being a leader.

One of the key roles in management is setting the tone or culture of the company. This is particularly true in advertising, where culture is one of the major differentiation points among agencies. Culture is the set of beliefs, practices, behaviors, and reactions to the business environment that differentiate one advertising firm from another.

Leadership in an advertising agency comes from all levels. However, there are key differences between the responsibilities of top management and departmental management. Senior management is tasked with leading the agency, setting agency policy, and working with—or for—both external and internal stakeholders. Depending upon the type of organization, senior management may be involved with a board of directors and stockholders, and also work with a variety of outside counsel including legal and accounting.

Department managers and supervisors are responsible for leading their departments from a personnel standpoint. This may include training, mentoring, and evaluating current and potential employees. This level is also responsible for administering the accounts that they work on in terms of their specific areas of responsibility. For example, the creative director is responsible for the creative product on the accounts that he or she supervises.

Leadership is a key quality required of any manager. The same is true in the advertising industry. Setting the tone and ensuring that all employees are doing their best to achieve success are vital aspects of advertising leadership.

Trends

The advertising business is changing rapidly. It is nearly impossible to keep up with trends and new directions. Yet, one large part of management is to understand where the business is going so that you can be poised to capitalize on the changes.

There are three macro trends that are impacting the advertising industry.

1. The rapid movement to digital or interactive media
2. The move towards engagement—having a two-way conversation with the consumer.
3. The move towards globalization.

As an advertising agency manager, you must recognize these and other trends, and be prepared to deal with them. This may mean that you need to reevaluate your staffing needs in light of a change to more interactive media. Or it may mean that you must create an alliance with a foreign firm if you have only a domestic operation. Regardless of the decision, keeping abreast of trends and how they impact your business is another key aspect of management.

Obviously, economic trends are among the ones that management follows. If your agency has 60 percent of its income tied up in travel accounts and fuel costs significantly rise, this trend weakens the travel market, which in turn has a huge impact on your clients and ultimately your business.

Another key trend that management must focus on is the nature of the competition. If a new technique or service appears to be gaining prominence in the market, then it is management’s role to decide if it needs to be integrated into the agency, and then figure out how to bring that about.

Keeping up with emerging trends is hard. As a manager, you want to keep up to date but not overreact to something that will prove to be the “flavor of the day.”

In summary, the fundamentals of advertising management are the ones practiced in any sound business. Management must properly organize its workplace to get the best product, yet produce a sufficient return on investment. Management must set the tone for the business and provide the leadership necessary to deal with any workplace issues. Finally, management must take a long view of the business and be prepared to reposition the company based on emerging trends.

For more information on advertising management fundamentals, see Chapters 1, 2, and 3 of Jugenheimer and Kelley’s Advertising Management textbook.

Case 1 Boswell Agency

DOI: 10.4324/9781315705934-2

Issue: Structuring of an Advertising Agency

Jill Williams arrived at DFW airport at 9 pm on Blue Sky Airlines from New York. The flight was on time.

“Thank goodness we came in on time,” she thought. “I’ve got enough on my plate without having to discuss a flight delay when I meet Tom Bradley tomorrow.”

Tom Bradley was the president of Blue Sky Airlines. He was a real no-nonsense figure who had many run-ins with labor unions in the past. He was a tough negotiator and an equally tough client. In fact, he was the largest client of Boswell Agency. Jill was being asked to head up the Dallas office of Boswell after being an executive with the agency’s New York office. The president of the Dallas Boswell office had recently resigned and since Jill had prior airline experience with Continent Airlines, and had run the tourism group for Boswell’s New York office, she was the choice to run Dallas. Naturally, this was stressful for her family. Her husband was an IBM salesman, so the move wouldn’t disrupt his work. However, her son and daughter were both in high school, so they were not excited about relocating. Her daughter was especially distraught since she had recently performed at the New York City Ballet and was in a special performance arts school. They all liked the Manhattan lifestyle so Dallas seemed like a foreign country to them.

Company

The Boswell Agency had grown out of Des Moines, Iowa, where it still maintains its accounting and financial activities. It began as an agricultural agency, but after its early success Charles Boswell went on an acquisition spree. He purchased agencies across the United States including New York, Los Angeles, Dallas, Atlanta, Chicago, and Boston. Through these acquisitions, he built the network of Boswell agencies that was now the twentieth largest in the United States.

This acquisition strategy brought many management challenges. Each office was largely independent and had its own financial goals. Although there were benefits to the network, it was not easy to get all the offices to work together. Power struggles and jealousies were a part of life.

Exhibit 1.1 Boswell Agency: Dallas Office's Client Roster

Account	Billing (millions)	Total Office % Income
Blue Sky Airlines	100.0	50%
Goodmark Foods	30.0	15%
Oberon Printers	22.0	11%
Bell Cellular	18.0	9%
Roscoe’s Sausages	8.0	4%
Bluebonnet Cosmetics	8.0	4%
Plains Bank	6.0	3%
WPBA-TV	4.0	2%
Singleman Auto Group	4.0	2%
	$200.0	100%

The Dallas office, which w...

Table of contents

• Cover Page
• Half-Title Page
• Title Page
• Copyright Page
• Table of Contents
• Preface
• Introduction: How to Analyze a Case Study
• Part I. Advertising Management Fundamentals
• Part II. Advertising Financial Matters
• Part III. Advertising Business Plans
• Part IV. Advertising Planning
• Part V. Advertising Budget Management
• Part VI. Advertising Management: Dealing with People
• Part VII. Advertising Management Decisions
• Part VIII. Advertising Management Environment
• Part IX. Managing the Future of Advertising
• Part X. Managing Yourself
• About the Authors