Answer to Question #213565 in Management for GOG

Question

SUBJECT : ADVERTISING AND SALES MANAGEMENT

Describe the five (elaborate in detail ) most common decision variables in the selection of an in-house versus external advertising agency. Also discuss the steps (elaborate steps in detail ) involved in selecting an advertising agency

Answer 1

• Describe the five most common decision variables in the selection of an in-house versus external advertising agency:

Convenience - a firm has to consider convenient factors such as reliability, control and connectivity. In-house marketing teams offer reliability in managing the teams, monitoring quality and controlling the projects. In terms of connectivity, in-house offers great ability to access data, analyze and align responsively. External agencies may have limited control in terms of process and coordination could be complex. agencies have to make extra effort to access data.

Cost - making such a decision is highly influenced by the firm's cost budget on advertising. Not having to write checks to an outside firm may make in-house marketing more appealing for some. However, external agencies my be more appealing for others given the extra costs associated with setting up an in-house marketing team.

Objectivity - external agencies provide greater objectivity due to the independence of its recommendations. It brings in different approaches and ideas and freely object to marketing ideas that are not worthwhile.

Experience - in-house teams may offer a firm limited experience in some aspects and tools of digital marketing and thus may not cover efficiently all marketing needs. External agencies offer a wider pool of talents as they work with several clients and have more skilled individuals on hand. Their talents are diversified and cover wider scopes of marketing.

Flexibility - in-house marketing teams can adjust their skills to manage the required tasks and manage pressures. In-house teams can expand or scale down depending on the company's needs. External marketing agencies offer flexibility in terms of fees and resource allocation.

• Discuss the steps involved in selecting an advertising agency:

Determining the services needed - this sets the scope of the work e.g. an extensive marketing campaign or production of just a few marketing materials, so as determine whether one needs a full-scale advertising agency or not.

Setting up the advertising budget - a budget will guide a firm in picking a suitable marketing agency. Large agencies often charge more than smaller agencies and their fees may exceed what's in the budget. Smaller agencies can offer comprehensive plans at a smaller budget.

Deciding if you want a local agency - depending on the size of the business, one can hire an agency in any location. Proximity as a decision variable depends entirely on the firm and their needs and resources.

Match the company's size to the size of the ad agency - smaller businesses are probably better served by smaller agencies. Larger businesses with more needs may be better served by larger agencies offering a wider variety of advertising services.

Screening of agencies you're interested in - this encompasses visiting the advertising agencies in person, observing their styles, requesting work samples produced for other clients and asking for references from current or former clients.

Award assignment - this includes choosing the most suitable agency based on the business' needs and negotiating on aspects such as pricing and scope of work before awarding contract.