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Home » Marketing » 8 Types of Advertising agencies based on their Function

8 Types of Advertising agencies based on their Function

June 10, 2023 | By Hitesh Bhasin | Filed Under: Marketing

Advertising agencies are dedicated centres to create and promote advertisements. They are responsible for not only developing advertisements but also executing the entire advertising strategy and developing and executing integrated marketing communications. Advertising agencies come into the picture when firms decide to outsource the advertising.

Owing to the professionalism of advertising agencies and their combined services, in spite of having an internal advertising department, firms make use of advertising agencies by outsourcing to them.

Broad Classification of Advertising

  1. Internal Advertising – Advertising is done by the internal department
  2. External advertising – Advertising done by External Advertising agencies.

Let us have a look at the internal advertising option first.

Table of Contents

  • Internal Advertising department
  • Types of external advertising agencies
  • 1) Complete servicing Types of Advertising Agencies
  • 2) In-House Types of Advertising Agencies
  • 3) The Limited servicing Types of Advertising Agencies
    • 3-1) A Creative Boutique
    • 3-2) Media buying services
    • 3-3) B2B ad agency
    • 3-4) Financial advertising agency
    • 3-5) FreeLancers

Internal Advertising department

The primary function of internal advertising department includes planning of the advertising program and maintaining a liaison with the external ad agency. the advertising manager or in the same companies, the marketing manager is solely responsible for overall planning and executive of advertising programs. The functions include deciding on advertising strategy, the advertising budget, markets to be captured and whether to outsource their advertising program or not.

The advertising budget is a part of the marketing budget which is dependent on the sales of the company. Evaluating the ad effectiveness, creating and finding new ways of advertising, coordinating with marketing function, developing ad budget are few of the other functions of the internal advertising department.

Types of external advertising agencies

Following are a few types of advertising agencies based on the function :

Advertising agencies - 1

1) Complete servicing Types of Advertising Agencies

A complete advertising agency offers the whole package of services which includes, but is not limited to, full strategy for marketing communications, promotional materials, and tools, creating an advertisement etc. Some may even include performing market research and selecting the best source of advertisement to reach the target audience. A complete servicing agency includes board of Management, account executive and others, under which various departments like marketing, research, media, creative and admin department are present. Creative department is one of the most valued departments in an ad agency.

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A complete servicing agency includes not only the entire package for promotional strategy but it also includes individual services as per the need of the client. The biggest advantage of utilizing the services of a complete service agency is that they have the best talent and they provide numerous services, all under one roof. For companies who want a one-stop approach complete servicing agency is the best option. Using services of complete servicing agency include benefits like that the creative work is sales oriented, the clients get an experience of holistic and synergistic approach, the coordination is easier and corrective measures a simple. They also provide a better and professional working environment.

2) In-House Types of Advertising Agencies

an in-house agency is an option for medium and small-scale industries as well as for firms which are startups. In-house agency sales on the cost of outsourcing since it is owned and operated by the parent firm or advertiser. An in-house ad agency may also accept outsourced works from other organizations. It provides all the services provided by traditional complete service agencies with cost-effectiveness. Reduction cost of advertising is the major advantage of an in-house agency.

Not only does it reduce the cost but also it can be a revenue generator for the company if it accepts work from other companies. Creativity is strictly supervised in an in-house agency. On the other hand, the disadvantages include that creative professional is not usually attracted to an in-house ad agency. Since the major focus of in-house ad agencies to service the own company it may affect the creativity and cause repeating of advertisements.

3) The Limited servicing Types of Advertising Agencies

Advertising agencies - 2

many companies prefer only limited services rather than using a complete service agency. Although Limited services can be purchased from a complete servicing agency in the cost is a major factor because the primary function of complete servicing agency is to provide full service.

The limited service agencies main specialize in media or production research or new product development or any other industry. These agencies provide faster response, clear objectivity and effective and direct communication with their clients which leads to better results. The client may determine the planning and managing of the advertising.

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There are Many Types of Limited Servicing Advertising Agencies. Let’s look into these different types.

3-1) A Creative Boutique

Creative boutique, media buying services fall under Limited servicing agencies. This is a form of the advertising agency which provides only creative services. For clients who seek creative talent because of unavailability of talent in the in-house agency or because of the repetitive forms of advertising, creative boutiques are the best place to go after.

They are known for their superiorly creative and innovative ads. Apart from creating ads, they do not offer any other service which increases their focus and the quality of the output they produce. The disadvantage of availing the services of a creative boutique include that the clients have to employ other ad agencies for the rest of the functions. Coordination between the two can be full of hassle.

3-2) Media buying services

These specialize and buying radio and TV time and operate independently of the other companies. They are niche category of advertising agencies which specialize in the purchase and research of advertising time and space. There are times when services of media buying are utilized by both clients and Advertising agencies mainly to execute them.

The function of media buying agency is to purchase large amounts of time and space on media which they get at a huge discount and then the re-sell it to the other clients on good profits. The function also includes scheduling various slots for various companies on different media like TV and radio stations and ensuring that proper telecasting of respective media has taken place at a proper time or not.

3-3) B2B ad agency

Electrician advertising agencies these specialized only in advertising of products or services of businesses to business and not customers. B2B agencies target the complex decision-making processes involved in marketing and businesses with the ads that could help to make the process smooth and easy. Examples include advertising of office stationery for the companies, advertising of international expansion of the company etc.

3-4) Financial advertising agency

As the name suggests, financial ad agencies provide only specialized services for financial companies. Agencies that advertise only about financial products or services in a financial market also fall under this category. Few agencies may provide services related to investment decisions and proper communication and presentation of financial results.

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3-5) FreeLancers

While freelancers are not exactly an advertising agency there are people who work on small campaigns of smaller firms. The clients delegate the advertising to the freelancer and the freelancer with his creative abilities to create ads for the client. Only after approval of the client does the execution happen.

Freelancing is probably the cheapest form of advertising that any organization could avail. Also, creativity can be explored in freelancing since the freelancer is not associated with any of the regular advertising companies. Many freelancers provide only creativity services while senior freelancers my offer developing the entire ad campaign for the client. There are few third-party companies which connect freelancers from all around the world and provide a single service to the client.

The client may hire one freelancer for creativity, other for developing the advertisement, other for developing the message and yet another for combining the entire plan or the client could get half of the work done from the freelancer and they may complete the rest half.


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Liked this post? Check out the complete series on Advertising

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About Hitesh Bhasin

Hitesh Bhasin is the Founder of Marketing91 and has over a decade of experience in the marketing field. He is an accomplished author of thousands of insightful articles, including in-depth analyses of brands and companies. Holding an MBA in Marketing, Hitesh manages several offline ventures, where he applies all the concepts of Marketing that he writes about.

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Comments

  1. Solomon Essel says

    The source of information here is very rich. Keep it up for more insight

  2. Nagesh says

    Thanks for sharing this I found your information really helpful. your explanations were easy to follow, and I appreciated how you explain 8 Types of Advertising agencies based on their Function, it was very informative and useful. keep the posts coming! very good talent.

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