How Does an Advertising Agency Work?

A Quick Guide To The Way Most Advertising Agencies Operate

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It may seem like a silly question – “how does an advertising agency work?” But, to anyone outside of the industry, it’s not silly at all. In fact, the way that ad agencies are represented in movies, and on television, is a world away from the day-to-day operations of a legitimate ad agency.

It would be easy to write a book outlining the roles, responsibilities, and activities involved in running a successful advertising.

But for a very quick overview of how an agency works, let’s break it down into a few main areas.

1) Ad Agencies Have Clients

This is a no-brainer, obviously. But the usual way an agency gets work is through a pitch. A pitch is an audition, with the client giving a brief to a number of advertising agencies, and choosing the one that best resolves the brief. Of course, it doesn’t always work that way (see The Pitch TV show), but for the most part, this is how agencies are paired with clients.

After this, contracts are signed and the real work begins. Depending on the type of agency and client, the scope of works (SOW) will vary greatly. But in a nutshell, the agency agrees to produce a certain amount of work for a set amount of money (be it a retainer, hourly, or other agreement) and the client agrees to pay the agency upon receipt of the work. That’s as basic as it gets, but it’s the most simple explanation.

2) Everything is Problem/Solution Driven

The ad agency is there to solve problems for its clients. The client is there to present the agency with its problems, and when it needs solutions. The types of problems and solutions vary greatly depending upon the client’s business and the ad agency’s area of expertise.

How this is done is different from agency to agency, but the basic steps are more or less the same.

  1. The account manager (and team) meets with the client to identify the problem that needs to be solved.
  2. The account manager writes a creative brief based on that problem. This will include competitive analysis, research, the assistance of the planner and/or creative director, and eventually, sign off from the client.
  3. The account manager briefs the creative team and includes a timeline, budget, proposed media and other factors.
  4. The creative team works on the project for several days (or weeks if they’re lucky) and brings the first round of ideas to the creative director.
  5. The creative director will cull the ideas that are not working, and direct the team to explore the good ideas.
  6. The creative team will continue to work on the ideas, but bring in the production department (if needed), account manager and other members of the agency to make sure the work is on track. If there are printed pieces, or a shoot is required, this is when the production department will begin estimates.
  1. The creative director approves the final ideas, and the creative team presents (hopefully) them to the client.
  2. The client will go away and discuss the ideas, before giving feedback to the agency. This may result in a reworking of ideas (repeat steps 3 to 7) or a green light to move into the execution of the ideas. At this point, a budget and timeline will once again be approved.
  3. The creative team works closely with the account team, media buying, production, and the creative director to produce the ads, whatever form they may take.
  4. The final ads are placed in front of the client for approval. Once the client approves, the ads are published, be it online, in print, outdoor, on the air, or any other media.
  5. The agency will monitor the success, and ROI, of the ads and give the feedback to the client.
  6. The client pays the agency. And then the whole process is repeated.

Again, that is a very simplistic way to look at the day-to-day workings of an ad agency, but that gives you a brief insight into the process.

3) Self Promotion and Awards are Key

If the agency does great work for a client, that should be advertising enough. But ad agencies, for the sake of survival and success, must get out there to win more business, and have clients coming to them for work.

Ad agencies will enter their best work into the awards shows. Only the best shows will garner attention from clients worth having. They will also develop a website and other forms of self-promotion to get clients looking in the right direction.

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