How does an advertising agency work?

A key player in media buying, the advertising agency is the organization that links advertising space to advertisers. From the acquisition of these spaces to the realization of advertising campaigns, the roles that an advertising agency must assume are multiple. Before you start acquiring advertising space, find out how an advertising agency works and the services it offers to advertisers.

Summary of the article: How does an advertising agency work?

1. What is an advertising agency?
2. What are the differences between internal and external advertising agencies?
3. How do advertising agencies acquire media?
4. How do agencies determine their media targets?
5. How are rates determined by an advertising agency?

The role of an advertising sales agency is plural, nevertheless, we recognize one main task, the marketing of advertising spaces for the media that it lists. Print, digital, radio, television... all these advertising spaces need to go through an advertising sales house to be able to use them.

The marketing of advertising spaces by an advertising agency also requires it to be able to advise its customers, to determine the media supports which will answer perfectly the objectives of campaign of an advertiser. In other words, an advertising sales house analyzes the media briefs of an advertiser in order to be able to propose a media plan that meets its campaign ambitions.

In addition, an advertising sales house is also responsible for :

• collecting the visuals of an advertising campaign;
• controlling the quality of the visuals for print and web advertising;
• transmitting the visuals to the media;
• ensuring the follow-up of the advertising campaigns;
• sending campaign proofs to advertisers;
• carrying out campaign assessments.

>>> What is the difference between an advertising agency and an advertiser?

Advertising agencies can be more or less independent of the media groups whose advertising space they market. Thus, there are two types of advertising agencies:

• Internal advertising agencies that are directly integrated into the major media groups. This is the case of the FranceTV Publicité agency of the France Télévisions group.
• External advertising agencies which are independent. They are most often specialized in one type of media (TV advertising, radio, etc.).

On the other hand, it is possible to define an advertising network according to the location of the advertising spaces it sells and more precisely if they are digital or not:

• Online advertising agencies sell advertising space on websites or social networks. They can also be responsible for the sale of digital posters, DOOH.
• Offline advertising agencies are those that sell traditional advertising space on media such as television, print, billboards ...

>>> What is advertising? Definition, objective, current trends

In order to be able to provide advertisers with advertising space, an advertising agency must first of all prospect for the best advertising spaces. They then negotiate the price of the different media with the media.

For billboards, it is the municipalities that issue invitations to tender to find the agency that will supervise its advertising furniture.

As for the advertising agencies in charge of digital, they acquire their spaces thanks to a DSP (Demand-Side Platform) managed by a web giant like Google or Amazon. Each DSP lists a variety of social networks and websites. It is possible for a network of sites to be found on several DSPs, just as it is possible for it to be linked to a single platform.

In order to determine the targets of the various advertising spaces that an advertising agency manages, the latter uses information provided by organizations specialized in the collection of media data and their analysis:

• Mediametrie for TV and radio.
• Affimetrie for billboards.
• ACPM for the press.
• As far as digital is concerned, Facebook, Google, Nielsen, Sir data or Quari provide its data.

There are many factors to consider when determining the rates for advertising space. Nevertheless, there is no real constraint or maximum or even minimum not to be exceeded. The management of the advertising agencies can be led to set a commercial objective to be reached which will be reflected in the prices of the media. 

This does not mean that the rates will not be uniform from one agency to another: all the agencies carry out benchmarks of the competition and align their rates to some extent. In addition, there are two determining criteria in the pricing of advertising:

• the volume of the audience reached by the media
• the quality of the media's audience

Thus, the more people a medium reaches, the higher its rate will be, as in the case of television: it is one of the most expensive media because it reaches one of the largest audiences. The prices will also be high if the advertising medium reaches a very precise and coveted target, even if this audience is restricted: it is the case of the media that reach business leaders.

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