If you decide to start an advertising business, then you need to know what types or formats of advertising agencies generally exist in nature, which one is right for you and the specifics of the region in which you have to work.
Before opening an advertising agency, clarify its format for yourself. A well-organized advertising business has a chance to gain a client base and pay off in three months.
Small agencies that provide intermediary services, that is, place advertisements in the media, take orders for printing. They usually consist of two or three people.
However, experts believe that such firms have very little chance of surviving in the advertising business and becoming a long-term project.
Anyone who wants to deal with a large budget is forced to create a company with five to ten staff positions. And most importantly, he must produce his own intellectual product. What kind of bird is this – your own intellectual product?
In the advertising business, an intellectual product is:
1. branding (development of a trademark, corporate identity elements, etc.),
2. event marketing,
3. BTL.
Advertising only at first glance seems easy, so if you are far from the advertising business, hire a professional who is familiar with the specifics of the work. Misses are not allowed. The first mistake that infuriates the client can cost the entire undertaking.
Advertising business: search for premises
The location and appearance of the office practically do not play a role. After all, your employees will travel to customers themselves. An office is needed – to receive calls and shift papers from folder to folder.
But if you have not yet developed a portfolio, it is still worth showing yourself at least in which office you are renting. Sometimes customers still come to you, and it is important that they do not faint when they see the place where you are sitting.
Advertising business: office equipment
Here is what you will need to purchase:
1. PC,
2.printer,
3. scanner,
4. copier.
In no case should you save on computers for designers (for the lead creative designer and for the technical one). These cars are 2-3 times more expensive than ordinary ones. Also, software. We will not insult or advertise anyone, we will only say that the software in the advertising business must be professional.
We don’t include furniture here, because that’s obvious. But in the next paragraph we will put
5. Multi-channel telephone numbers, Internet and local network creation.
6. Important in the advertising business and the purchase of research data needed for planning. This refers mainly to measurements of the media audience. Researchers are usually contacted on an as-needed basis. A full-fledged subscription to media data is expensive even for a super agency.
Advertising business: Search for employees
For the main areas, take people on staff, for rare and unique operations, attract freelancers.
Here is an approximate list of personnel that is needed in the advertising business:
1. Two designers. One is for creative work (creates a product), the other is for layout.
2. Two sellers;
3. Media buying specialist,
4. Creator – a specialist in creating concepts for creative products).
5. Director.
Your own, full-time creative usually runs out of steam, that is, begins to repeat and work according to a template. The “multi-field” system is more expedient: while three freelancers are “under fallow”, the fourth one “cultivates” brilliant ideas for you.
Sales managers usually receive a salary plus a percentage of the attracted budgets. The amount of bonuses depends on the scale of orders and their profitability.
And there is another type of advertising business device
If you are mainly engaged in the creation of corporate identity and advertising layouts, then it is advisable for you to work only with freelancers (creating texts, and slogans), even hiring a third-party accountant. Only employees-managers should be hired for permanent work – a creative director (generator of ideas), an art director (implementation of ideas), an ekkanut director (seller of ideas).
Advertising Business: Service Promotion
Here, as elsewhere, everything is decided by connections. The well-connected employees you hire will provide the company with a flow of orders. Connections are important even when working with large clients: the director of the company may refuse to hold a tender if someone has a familiar designer who everyone likes.
Until you have developed a portfolio (it will take, on average, a year), do not poke your nose at business sharks. Build muscle in small and medium businesses.
Advertising agencies can also advertise themselves – through specialized media directories. Small firms to find advertising agencies just read such media.
There are also direct sales, but they are in last place here. Direct sales in the advertising business (phone calls to people by company managers) do not cause aggression only if the RA has a unique service or product, for example, exclusive places for outdoor advertising. During the first year, advertising in the media and direct sales can bring the company only 30% of customers. The rest is connections.
Advertising business: payback
The most profitable in the advertising business is creative. In other words, this means that the profitability of services
1. creating layouts;
2. banners;
3. logo design
can reach 40%.
Make up your own price! After all, you are a seller of air, and, therefore, your product does not and cannot have a real value. Everything in the advertising business depends on the client and your acting skills.
Small advertising agencies charge from 12 thousand rubles for a script. Create a logo – from 30 thousand rubles, a corporate identity – from 70 thousand rubles, an advertising layout in a magazine – from 12 thousand rubles, a billboard layout of 3 x 6 m – from 8 thousand rubles, an original layout of corporate publications – from 25 thousand rubles. As you can see, these approximate figures do not have an upper bar.
By placing advertisements in the media, the agency earns a discount (10-15% of the advertising budget) provided by the media.
The time and effort spent on this type of service is high – media buying brings money only with a budget of more than 100 thousand rubles. per month from the customer. But experts in the advertising business advise: do not ignore small orders! In the initial stage, it builds and strengthens relationships with enterprises. Expect increased profits from media buying if you manage to establish informal connections with commercial directors of the sales service. The situation, in reality, is as follows: in the paper price list, the biggest discount is 15%, but in real life, it reaches 25%!
Large advertising agencies master large budgets – it is difficult for a small agency to get a large budget for media placement. The larger the advertising budget, the more profitable the client for the office.
Customers with big money usually use creative and design, events and BTL promotions that are more profitable for the agency, etc. On small orders, the profitability does not exceed 25%, on large orders (from 500 thousand rubles) it grows to 30-40%.
The payback period for an advertising agency ranges from three months to one year, depending on what budgets the agency manages to get.
Here is a final tip for you: when you decide to dive into the advertising business, you will no longer have time to learn something, or even create a beautiful portfolio on the run, “on your knee”. Start working as an amateur as soon as possible and let your city know what kind of creative and entertainer you are before you decide to become a businessman and make money from it. At first, you will work for free, so start your advertising business right from your student, or even from school.