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FAQs

• What is an advertising agency?

  Advertising agencies are hired by various sized businesses to create advertisements for different media platforms. Agencies are typically staffed with teams that include graphic designers, copywriters, planners, and art directors. These team members work together to understand a company's brand, values, and goals and create ads for platforms such as print, web, mobile, radio, and television.

  There are several types of advertising agencies, including:

  Full-Service Agencies

  • Plan, develop and execute advertisements
  • Staffed by experts in all areas of advertising and marketing

  Interactive Agencies

  • Focus on online and mobile advertising
  • Advertising methods often feature interactive technology

  Creative Boutiques

  • Focus on creative components of advertisements
  • Smaller companies with a limited team of copywriters and creative staff

  Media-Buying Agencies

  • Acts as a broker, buying and selling airtime and advertising space

• What is a full-service advertising agency?

  Full-service advertising agencies work with clients throughout the entire advertising process, from conceptualizing and developing advertising content, to executing advertising strategies. Alternatively, companies can work with à la carte advertising agencies if they're only looking for help with one or two steps of the advertising process, such as ad creation or media buying.

• How much do companies spend on advertising?

  Most experts recommend companies spend about 8% of their gross revenue on advertising and marketing, but this amount can vary depending on the company's preferred method of advertising. One of the most expensive ads ever produced is Pepsi's “Joy of Pepsi” Super Bowl ad featuring Britney Spears, which cost the company more than $8 million.

• How do advertising agencies make money?

  While some advertising agencies charge an hourly rate or fixed fee for their services, other fee structures can be a bit more complex. Some advertising agencies may charge clients based on value—that is, they take a percentage of the client's return on investment (ROI). These kinds of fee structures typically carry less risk for the customer because the advertising agency is financially incentivized to produce successful advertising.

• How can companies use social media to advertise?

  Social media advertising can be a low-cost option for businesses of all sizes. Platforms such as Facebook and Instagram make it easy for companies to create their own advertisements and roll them out to their target audiences, with just a few clicks.

  However, while do-it-yourself social media advertising can be an effective solution for companies with limited advertising budgets, it goes without saying that the expertise of a skilled advertising agency shouldn't be discounted. Advertising experts can quickly help companies determine the best way to roll out social media campaigns and scale them to ensure a high return on investment.

• What is a digital ad agency?

  Digital ad agencies combine the principles of traditional advertising, including graphic design and copywriting, with modern technology. These agencies typically go above and beyond standard advertising services, providing clients with a full host of marketing services and digital solutions. Some services that are commonly offered by digital ad agencies include:

  • Social media marketing
  • Search engine optimization
  • Content creation
  • Pay-per-click advertising
  • Website design
  • App development
  • Email marketing
  • Media campaigns
  • Video production

• What ad agency does Geico use?

  For more than 25 years, Geico has been working with The Martin Agency. Together, this insurance provider and its advertising agency have created an enormous catalog of witty campaigns for television, radio, and digital media.

  Several principles are followed in the creation of Geico's ads, including light humor and clarity of brand. Following these principles, The Martin Agency has created a broad range of recognizable characters and ads for Geico, including the Hump Day campaign and, of course, Geico's famous gecko commercials.

• How much do advertising agencies charge?

  The cost of advertising services can vary greatly, with social media advertising campaigns ranging from $250 to $10,000 per month and video advertisements starting from about $1,000 to more than $1 million. Other services, including copywriting and graphic design, are also subject to varying costs, with some agencies charging a combined fee for copywriting and graphic design and others charging à la carte.

• Why do companies advertise?

  There are many benefits to advertising a business. While every company tends to go about advertising their products or services in different ways, the benefits are generally the same. They include:

  • Generating awareness of the business
  • Sharing information about upcoming sales or product launches with consumers
  • Providing consumers with details, such as the business's address, website or phone number
  • Establishing brand identity
  • Changing the general public's perception of the business
  • Increasing revenue

• What does a copywriter do at an ad agency?

  Copywriters are an important part of an advertising agency's creative team. Working alongside art directors and graphic designers, copywriters help to determine the tone for the advertisements they create. They're responsible for writing text, scripts and CTAs (call to action) for print and digital media advertising, and, in many cases, they come up with taglines, which are often the most memorable part of an advertisement.

• What does a managing director do at an ad agency?

  Managing directors are responsible for overseeing the relationship between clients and the creative team. They act as a liaison between these parties, ensuring that the creative team is meeting the needs of the client and producing work in an efficient and timely manner. The managing director is also responsible for handling financial transactions with the client and, in most companies, reporting financial information to the company's financial director.

• Are ad agencies liable for false advertising?

  In the event that false claims are made in advertisements, the Federal Trade Commission (FTC) typically investigates both the brand and the ad agency. Liability is then determined on a case-by-case basis. As such, it's important that brands and ad agencies work together to create honest advertising campaigns and establish strict compliance and quality assurance processes.