Question 1

Lack of long-term objectivity, flexibility, and creativity are a few of the reasons why a company might move away from:

Accepted Answer

An in-house agency may lack long-term objectivity, flexibility, and creativity because it is part of the company and may not bring in fresh, external perspectives or have the same level of diverse expertise as external agencies.

Question 2

A major reason why some companies choose to use an in-house agency is to:

Accepted Answer

Using an in-house agency can help companies reduce advertising and promotions costs by eliminating the need to pay external agency fees and allowing for more control over the budget.

Question 3

Which of the following is true of an in-house advertising agency?

Accepted Answer

An in-house advertising agency provides greater stability as it is a part of the company and can adapt to changes more easily. It also allows for easier communication and collaboration with other departments within the company.

Answer: D
 An in-house advertising agency can provide more objectivity as they have a better understanding of the company's products, goals, and culture. They also offer a range of services since they are part of the company and have access to its resources.

Therefore, the correct choices are C and D.

Question 4

A company often uses a decentralized organizational system when:

Accepted Answer

A decentralized system is more suitable when there are multiple divisions and different products. This is because a centralized system may not be able to cater to the needs of each division or product individually. With a decentralized system, each division or product can have its own management and decision-making power.

Question 5

Which of the following is a disadvantage of using a centralized organizational system?

Accepted Answer

Centralized organizational systems often have layers of bureaucracy that can lead to longer response times and slower decision-making processes.

Question 6

Which of the following statements explain why an organization would want to use an external advertising agency?

Accepted Answer

Using an external advertising agency can provide the client with access to highly skilled individuals who specialize in various aspects of advertising and promotion, such as copywriters, graphic designers, and media planners. This can help the client create more effective and efficient campaigns than they might be able to do on their own. Choices A, B, C, and D are not accurate reasons for using an external advertising agency.

Question 7

A company that uses an in-house agency might turn its advertising and promotion tasks over to an outside agency in order to:

Accepted Answer

Turning advertising and promotion tasks over to an outside agency can bring in an outside perspective, which can lead to greater objectivity. This can be important for companies that feel that their in-house agency has become too familiar with the products or services they offer.

Question 8

Superagencies were formed:

Accepted Answer

Superagencies were formed to provide their clients with integrated marketing communications services worldwide. As globalization increased, clients wanted a single agency to handle all of their marketing communication needs across different countries and cultures. Superagencies were able to provide this service by merging with or acquiring other agencies around the world.

Question 9

Which of the following is an advantage of a decentralized organizational system?

Accepted Answer

A decentralized organizational system allows for decision making to be made at lower levels, allowing for a quicker response to problems and opportunities.

Question 10

An ad agency that offers its clients a complete range of marketing, communication, and promotion services is known as a(n):

Accepted Answer

A full-service agency offers a complete range of marketing, communication, and promotion services to its clients, including creative, account management, and media buying services. Creative boutique agencies focus primarily on creative and design work, while media buying services specialize in buying ad space in various media outlets. Account service agencies primarily provide account management and strategy services to their clients. Buzz marketing agencies specialize in viral marketing and word-of-mouth promotion.

Question 11

Diva Boutique, located in Manhattan, relies on external advertising agencies for its advertising needs, but due to its growing global presence, it is now worried that using external agencies may lead to inconsistency in delivery of its brand image. It also wants to maintain tighter control over its advertising and promotional activities. Which of the following advertising agencies should it adopt?

Accepted Answer

Diva Boutique needs an in-house agency to maintain tighter control over its advertising and promotional activities and ensure consistency in brand image delivery.

Question 12

Which of the following describes a limitation associated with the decentralized organizational structure for advertising?

Accepted Answer

In a decentralized organizational structure for advertising, brand managers often end up competing for management attention, marketing budgets, and other resources. This can lead to inefficiencies and difficulties in prioritizing advertising initiatives.

Question 13

Which of the following statements is true about outside advertising agencies?

Accepted Answer

External agencies are often preferred for their greater skill and expertise levels. They provide clients with specialists who have specific skills, knowledge, and experience to help market the client's products or services.

Question 14

Which of the following refers to the amount of client money that agencies spend on media purchases and other equivalent activities?

Accepted Answer

Billings refer to the total amount of client money that agencies spend on media purchases and other equivalent activities.

Question 15

Which type of ad agency is most likely to offer its clients an extensive range of marketing, communications, and promotions services, including planning, creating, and producing the advertising; performing research; and selecting media?

Accepted Answer

A full-service agency is most likely to offer its clients an extensive range of marketing, communications, and promotions services, including planning, creating and producing advertising, performing research, and selecting media. This agency model offers a one-stop-shop for all advertising and marketing needs of the client. Other agency types may specialize in one or two specific areas like creative, media, or collateral.

Question 16

In a decentralized system, individuals who oversee management of the entire product category and focus on the strategic role of the various brands in order to build profits and market share are known as:

Accepted Answer

Category managers oversee the management of a product category and focus on the strategic role of various brands to build profits and market share. They are responsible for developing and implementing strategies that enhance the performance of the product category. They work closely with brand managers to develop the product and promotion strategies for each brand within the category. Art directors, account executives, account supervisors, and media planners are roles that are typically found in advertising or marketing agencies and are not specific to decentralized systems.

Question 17

Which of the following is a disadvantage of using an in-house advertising agency?

Accepted Answer

An in-house advertising agency may have fewer opportunities to attract and retain top-level talent compared to an external agency that can draw from a larger pool of applicants. This could negatively impact the quality of work produced by the agency.

Question 18

Which of the following statements is true about superagencies?

Accepted Answer

Superagencies were formed by merging smaller advertising agencies to form large conglomerates that offered a full range of services to clients. However, as these superagencies grew in size, they became bureaucratic and less responsive to clients, leading some advertisers to switch to smaller, more specialized agencies that were flexible and more responsive to their needs.

Question 19

Which of the following is a potential benefit of an in-house advertising agency?

Accepted Answer

An in-house advertising agency provides greater control over the advertising process, as the team is part of the company and can align more closely with its goals and strategies.

Question 20

Which of the following is a disadvantage of a decentralized organizational system?

Accepted Answer

Decentralized systems can lead to ineffective decision making due to the lack of centralized control and potential for inconsistent decisions across different parts of the organization.

Quiz 3: Organizing for Advertising and Promotion: The Role of AD Agencies and Other Marketing Communication Organizations