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Business Promotional Materials: Advertising basics 2

In Advertising basics 1, we dealt with advertising law. Now we need to look at doing your own advertising for your business.

Advertising is a complex industry, and you need to know your way around before even talking about spending any money.

  • Comparative fees for advertising.
  • How to control the content and quality of your advertising.
  • How advertising fees are charged or 'billed'.

Comparative fees for advertising.

Advertising agencies charge fees on a competitive basis. You can do yourself a favor by shopping around and getting quotes for advertising work. Some agencies charge a lot, and even if the expenses are deductible, it's money out of pocket. A few phone calls can save you thousands of dollars.

Note: Since the internet boom, a lot of freelance copywriters and graphic artists have been doing advertising work, and they can be a lot cheaper than agencies. You'll still need to discuss fees, but you will find that for basic advertising, they're as good as the agencies, sometimes better.

How to control the content and quality of your advertising.

There's a sort of industry myth that the advertising agencies create the advertising, and their clients just pay for it.

Nothing could be further from the truth. Nobody gives blank cheques for their advertising materials. Most advertisers want control over any advertising related to their business. They have a strong grip on content. Advertising agencies give them ideas, and they either approve or disapprove of the concepts, and may demand other materials.

Generally speaking, advertising material is sold 'on acceptance', meaning the client has approved of the materials.

How advertising fees are charged

  • Advertising fees, or billing, as it's known in the industry, are based on a series of standard practices.
  • Advertising agencies pay all their production fees, including buying space on newspapers, TV, the internet, etc, up front.
  • They then charge the client, incorporating those costs, and their own fees, which are on average about 33% of the total cost.

This works out as a fairly efficient way of doing business, because the agency can do the actual placement of the advertising very effectively.

It can also come as quite a shock, because the fees for placement can be real surprises to the bottom line of some businesses.

You need to know all costs up front, before giving the OK for anything.

You should receive quotes for fees in writing.

You also require comparative pricing to see what sort of deal your getting from your advertising agency.

A basic point about doing business with the advertising industry:

The only real truth about any of the myths about the advertising industry is that it really is a cutthroat industry. Nobody minds undercutting the competition. Paying customers are always welcome, and the agencies like regular cash flow. Go for a good deal, and you'll eventually get one.


Please note:

  • This text is intended for advisory and guideline purposes only.
  • Any business letter can become a legal document, so check your content properly before issuing.
  • Any executable or statutorily defined document should be checked for compliance with legal requirements, and you should seek legal advice regarding its contents.