Do they resell media to client at profit or have the client pay them the agency commission on media buy? Do they also charge for creative? Production? Or do these get covered by the media mark-up?
2006-06-23 05:13:35 · 4 answers · asked by sonnyinvalley 1 in Business & Finance ➔ Advertising & Marketing
Sonny--the optimal phrase here would be--any way they can---An agency has several ways they can adapt to the needs of a client when it comes to their needs in this area...The first consideration has to be the budget...The agency usually is set up with the various media that they use with accounts that reflect what is known as "bulk buy rates" which means each of the midia businesses treat the agency as a prefered customer and gives them the best rates that they have for space and services (this is because they bring so many smaller accounts in under one "account")---so then the agency can get a fairly good mark on the space rates and still offer that space at a fair discount---Then--depending on the size of the account and the budget--the better agencies have any number of services that they can offer in the production and post-production phases of the ad project and these services can either carry a price tag as independant add on charges or (if it is a major account) be thrown in as part of the much larger client's block space purchasing...There are many other ways that they enhance the bottom line--far more than space and time allow for here but this is thumbnail to the overview here...I'll end with the statement --creative and production charges ARE made but whither or not they are listed and charged for as a seperate charge or are buried within the total of services rendered usually depends once again on the size of the account and the complexity of the services rendered.. Hope this helps in some way.....
2006-06-23 05:45:58 · answer #1 · answered by Anonymous · 2⤊ 1⤋
Most offline media have agency rates that allow for a 15% commission to the agency. However, this is intended to cover the cost of planning and placing the media, not actual creative development (creation of ads, billboards, tv spots, whatever).
So, yes, they charge for creative development, production, materials etc, and can profit from the media buy itself.
2006-06-23 12:18:59 · answer #2 · answered by ce 2 · 0⤊ 0⤋
most ad agencies book the media time [and commissions from that] as well as charge their clients the creatives [storyboards, script, production].
2006-06-23 12:27:16 · answer #3 · answered by Q&A Monster 2 · 0⤊ 0⤋
They provide a service so they charge by the product.
2006-06-23 12:16:56 · answer #4 · answered by Dan S 7 · 0⤊ 0⤋