Deck 2: The Structure of the Advertising Industry: Advertisers, advertising Agencies, and Support Organizations

Question 1

Retailers that sell in national or global markets are the most visible reseller advertisers and promotion users.

Answer 1

True

Question 2

The advertising used by social organizations has a fundamentally different purpose compared to the advertising carried out by major multinational corporations.

Answer 2

False

Question 3

The old-style power struggles in the advertising industry were mild compared to the 21st-century power struggle going on in the industry now; consumers are tired of ads on every screen,so industry needs to adapt successfully to the new technologies that consumers are willing or even eager to use.

Answer 3

True

Question 4

Digital/interactive agencies are those that have expertise in preparing communications for new media,such as the Internet,mobile marketing,and interactive television.

Question 5

Trade resellers of consumer products and services are the most prominent users of advertising and promotion.

Question 6

From Facebook to Twitter to Snapchat,consumers are seeking out information environments where they control their exposure to information rather than an advertiser or media company being back in control.

Question 7

At the local level,small retail shops deal only with household customers.

Question 8

Media conglomeration broadly concerns how there used to be a few main players in the media business but now many more channels and other forms of media are emerging.

Question 9

A creative boutique's greatest advantage is its niche expertise.

Question 10

Advertisers include business organizations,but exclude not-for-profit organizations.

Question 11

The task of strategic coordination of media and promotional efforts has become simpler because of the proliferation of media options and extensive use of promotional tools beyond advertising.

Question 12

Due to the backlash against advertising that clutter can cause,advertisers are integrating more tools within the overall promotional effort to reach more consumers in different ways,such as through mobile or social media or digital content.

Question 13

The idea behind crowdsourcing,which happens to be very synergistic with social media,is to prevent ideas about a new brand from becoming public to consumers.

Question 14

Blogs have emerged as sophisticated sources of brand and product information and can synergize with social media.

Question 15

Social media is an example of the explosion of new media in recent years.

Question 16

It is common for social organizations to advertise at the national,state,and local levels.

Question 17

Proctor & Gamble,a major company,can reach 70-80 million Facebook users through careful targeting.

Question 18

The goal of creating persuasive communication is to attract attention and develop preference for a brand.This can be done well with integrated brand promotion via both digital and traditional marketing communications tools.

Question 19

No matter what changes,the brand and its differentiation still need to be highlighted with persuasive communications.

Question 20

A creative boutique's niche expertise can be its greatest liability if the creative boutique is an extra expense that advertisers cannot afford.

Question 21

Radio and satellite are examples of broadcast media.

Question 22

Firms that maintain and manage large databases of mailing lists are known as digital/interactive agencies.

Question 23

______ is used by organizations to get consumers committed to brands in a way that passive advertising cannot.

A) Co-op advertising 
B) Phishing 
C) Crowdsourcing 
D) Broadcasting

Question 24

Database consultants are particularly useful in planning coupon or direct mail campaigns.

Question 25

A disadvantage of using media specialists is that they buy media in small quantities.

Question 26

The four most prevalent agency compensation methods are commission,consultant,external facilitator,and production facilitator plans.

Question 27

In which of the following areas is the federal government's spending on advertising and promotion concentrated? 

A) The internal revenue service 
B) Political campaigns 
C) Armed forces recruitment 
D) Trade and commerce

Question 28

Which of the following is true of crowdsourcing? 

A) It refers to managing the supply chain system in a way that will most effectively reach the target markets. 
B) It aims at getting consumers more involved with and committed to a brand. 
C) It indicates the process of describing the firm's objectives for the brand in the near term and long term. 
D) It refers to passive, intrusive advertising.

Question 29

_______ has emerged as the most significant form of consumer control over information creation and communication.

A) Web advertising 
B) Social media 
C) Interactive television 
D) Direct marketing

Question 30

A typical markup charge for outside services is five to ten percent.

Question 31

With media clutter and fragmentation: 

A) integrated brand is all the more important. 
B) the probability of any one advertisement making a real difference has increased manifold. 
C) there are very few media choices available to advertisers. 
D) promotion options are no longer attractive to advertisers.

Question 32

A ______ is a general description for all organizations in the marketing channel of distribution that buy products to make them available to customers.

A) sponsor 
B) media buyer 
C) media specialist 
D) trade reseller

Question 33

Under the commission system,the rate of commission is raised to 25 percent for outdoor media.

Question 34

Advertisers are also known as ______ by their advertising and promotion agency partners.

A) consultants 
B) facilitators 
C) sponsors 
D) clients

Question 35

A fee system is much like that used by consultants or attorneys,whereby the advertiser and the agency agree on an hourly rate for different services provided.

Question 36

Advertisers do not like to handle their own public relations tasks because it requires highly specialized skills and talent not normally found within the company ranks.

Question 37

Websites frequented by individuals with common interests where they can post facts,opinions,and personal experiences are known as _______.

A) paywalls  
B) blogs 
C) infomercials 
D) creative boutiques

Question 38

It is mandatory for designers and graphic specialists to be involved in strategy planning.

Question 39

Grand Resorts has acquired the services of Elegant Inc.to develop advertisements for their organization.ElegantInc.has advised them to add a panoramic view to billboard ads and to portray tourists lounging by the sea.ElegantInc.is an example of a(n) ________.

A) media specialist 
B) creative boutique 
C) digital/interactive agency 
D) in-house agency

Question 40

Barlow and Baley Inc.,an advertisement agency,handles the clients' needs from account planning to creative to media to production in both digital and traditional areas.Barlow and Baley Inc.is an example of a(n) _______.

A) full-service agency 
B) in-house agency 
C) interactive agency 
D) database consultant

Question 41

CloudNine,an advertisement agency,charged Sparkles Inc.$50,000 at the rate of $5,000 an hour for the ten hours it spent designing an advertisement for the firm's new product launch ad.Which of the following systems of compensation did CloudNine utilize? 

A) A fee system 
B) A commission system 
C) A markup charge system 
D) A pay-for-results system

Question 42

___________ help firms in creating the visual impression of its advertising material.

A) Sales promotion agencies 
B) Fulfillment centers 
C) Designers 
D) Bloggers

Question 43

Which of the following acts as a support to direct marketing agencies and follow-up on the delivery of their direct mail? 

A) Creative boutiques 
B) In-house agencies 
C) Media specialists 
D) Fulfillment centers

Question 44

______ are experts in finding locations,securing dates,and putting together a team of people to pull off a promotional activity.

A) Event-planning agencies 
B) Creative boutiques 
C) Fulfillment centers 
D) Direct marketing agencies

Question 45

A compensation system that is based on the achievement of specific objectives of the client is known as a _______ .

A) pay-for-results compensation 
B) a markup charge 
C) commission system 
D) fee-based system

Question 46

           are experts in designing incentive programs,point-of-purchase materials,and in-store merchandising.

A) Database agencies 
B) Sales promotion agencies 
C) Fulfillment centers 
D) Event-planning agencies

Question 47

PinBall Inc.sought the help of Blazer Corp.to help them reach a niche group of vendors that they have been trying to do business with.Blazer offers the solution of publishing an advertisement in a trade journal which would help create awareness about the firm's product.In this scenario,Blazer Corp.specializes in ___________.

A) the management of databases 
B) creative services 
C) consumer sales promotions 
D) trade-market sales promotions

Question 48

Which of the following services occur within an ad agency? 

A) Administrative services 
B) Creative services 
C) Account services 
D) Production services

Question 49

A compensation system that adds a percentage amount to a variety of services the agency purchases from outside suppliers is known as a ______.

A) markup charge 
B) fee system 
C) pay-for-results compensation 
D) commission system

Question 50

A(n) ______ is often known as the advertising department in a firm.

A) creative boutique 
B) full-service agency 
C) interactive agency 
D) in-house agency

Question 51

Advertisers and their agencies rely primarily on external facilitators for: 

A) consumer research. 
B) media buying. 
C) assessing the effectiveness of promotional programs. 
D) production processes.

Question 52

Which of the following best describes digital agencies? 

A) They focus on ways to use digital solutions for direct marketing and target market communications and social media 
B) They implement direct response campaigns using all forms of media. 
C) They design direct marketing campaigns that mainly use emails and telemarketing. 
D) They specialize in buying media time and space and offer media strategies to advertisement agencies.

Question 53

A(n) _______ coordinates the research effort of an advertisement agency.

A) graphic designer 
B) media specialist 
C) account planner 
D) fulfillment center

Question 54

_______ are specialists that design and then operate contests,sweepstakes,special displays,or coupon campaigns for advertisers.

A) Creative boutiques 
B) Sales promotion agencies 
C) Database agencies 
D) Fulfillment centers

Question 55

_______ entail identifying the benefits a brand offers,its target audiences,and the best competitive positioning,and then developing a complete plan.

A) Administrative services 
B) Creative services 
C) Account services 
D) Media planning and buying services

Question 56

The graphic mark that identifies a company is known as a(n)           . 

A) patent 
B) blog 
C) logo 
D) slogan

Question 57

A regional fast food chain called Platters is interested in opening a restaurant in a new market.The company plans to hire the services of a firm to collect the data needed to expand into the new market.In such a scenario,which of the following firm's services would it hire? 

A) A marketing research firm to conduct surveys to understand the potential market  
B) An advertising agency to create innovative ads 
C) A consultant to create message strategies and message themes 
D) Media organizations for placing ads in broadcast and print media to create awareness for the restaurant

Question 58

Harper & Kane advertising agency sets an hourly rate for the services it provides to its clients.This rate is based on the average salary of all the members in the creative department.Harper & Kane uses the __________ system.

A) commission 
B) cost-plus 
C) markup charge 
D) fee

Question 59

Which of the following services of an advertising agency involves expressing the benefits of a company's brand in interesting and memorable ways? 

A) Creative services 
B) Billing services 
C) Administrative services 
D) Media buying services

Question 60

The _______ services department of an advertising agency typically includes the company's art directors,illustrators, and copywriters.

A) creative 
B) media buying 
C) marketing 
D) administrative

Question 61

_______ provide the physical facilities,including sets,stage equipment,and crews needed for broadcasting. 

A) Production houses 
B) Creative boutiques 
C) Fulfillment centers 
D) Interactive agencies

Question 62

Scenario 2-1
As one of the world's largest computer and technology developers, Dell, Inc. has never been a stranger to advertising. However, due to a consistent decline in market share, the Texas-based company is looking to overhaul its advertising efforts for the first time in years. In the past, Dell found success promoting its products as some of the most inexpensive computer products in the market. However, the company's new ad campaign, which will be targeted toward more high-end users, will make no mention of product price. The company is looking to reinvent its image and believes that the first step in doing so is to revamp its outdated advertising campaign.
(Scenario 2-1)Dell decides not to use a full-service advertising agency because it would like its own employees to take responsibility for the new ad campaign.However,full-service agencies do provide a number of advantages- one of these advantages is that they: 

A) are always large, employing thousands of people. 
B) can provide the physical facilities for broadcast production. 
C) have an array of talented professionals to meet all the needs of a client.  
D) are the only way to create an ad campaign.

Question 63

Scenario 2-4
Caltech Corp. has a 19 minute advertisement that is aired on a local news channel explaining to the public the benefits of its product. Sparkles Inc. has provided Caltech Corp. airtime on its television network, and has offered to advertise its product on its website as an act of goodwill.
(Scenario 2-4)Caltech Corp.has a 19-minute-long advertisement that explains to the public about its product.This is an example of a(n) _______.

A) podcast 
B) electronic directory  
C) blog 
D) infomercial

Question 64

Scenario 2-2
Brush Strokes is an art supply store located in a town with a population of about 100,000 people. The town is also home to a major State University. Brush Strokes gets a majority of its business from the student population. It uses the services of a local full-service advertising agency to promote themselves. A large part of its marketing budget has been used in running small advertisements in the local and school newspapers at the beginning of each term. The advertising agency is now recommending that Brush Strokes devote a majority of its budget to running television spots during broadcasts of the University's football and basketball games. While the owners of Brush Strokes agree that they could be doing a better job of reaching a larger portion of the student population, they have not come to any conclusions about the best way to accomplish this.
(Scenario 2-2)The owners of Brush Strokes are concerned that their agency may be recommending television advertising because it would be profitable for the agency.Brush Strokes can avoid paying for ineffective advertising campaigns by changing to a _________ system of compensation.

A) commission 
B) fee 
C) pay-for-results 
D) markup charge

Question 65

Scenario 2-2
Brush Strokes is an art supply store located in a town with a population of about 100,000 people. The town is also home to a major State University. Brush Strokes gets a majority of its business from the student population. It uses the services of a local full-service advertising agency to promote themselves. A large part of its marketing budget has been used in running small advertisements in the local and school newspapers at the beginning of each term. The advertising agency is now recommending that Brush Strokes devote a majority of its budget to running television spots during broadcasts of the University's football and basketball games. While the owners of Brush Strokes agree that they could be doing a better job of reaching a larger portion of the student population, they have not come to any conclusions about the best way to accomplish this.
(Scenario 2-2)Brush Strokes is looking for a way to increase sales.The advertising agency helps create an innovative message that will be conveyed through promotions and mobile marketing.Which of the following agency services is the company using? 

A) Billing services 
B) Creative services 
C) Administrative services 
D) Media buying services

Question 66

Which of the following is an example of interactive media? 

A) Banners 
B) Electronic directories 
C) Catalogs 
D) social media

Question 67

Scenario 2-1
As one of the world's largest computer and technology developers, Dell, Inc. has never been a stranger to advertising. However, due to a consistent decline in market share, the Texas-based company is looking to overhaul its advertising efforts for the first time in years. In the past, Dell found success promoting its products as some of the most inexpensive computer products in the market. However, the company's new ad campaign, which will be targeted toward more high-end users, will make no mention of product price. The company is looking to reinvent its image and believes that the first step in doing so is to revamp its outdated advertising campaign.
(Scenario 2-1)To generate interest in its new line of computers,Dell hires a company to design a number of contests and incentive programs that will help build excitement for the new line.This company is an example of a(n): 

A) fulfillment center. 
B) database agency. 
C) sales promotion agency. 
D) market research firm.

Question 68

Scenario 2-3
Axel Corp., a new clothing line manufacturer, plans to reach out to the local fashion stores and wholesale distributors around the country. It also plans to offer a discount on its products for the first 100 customers and establish a coupon system for the first six months of sales. The marketing team is looking to create a television advertisement and is looking for ways to improve on the ideas that they have come up with for the ad.
(Scenario 2-3)Axel Corp.plans to reach out to local fashion stores and wholesale distributors.Axel Corp.can achieve this by employing an advertising agency specialized in _______.

A) consumer sales promotions 
B) trade-market sales promotions 
C) infomercials 
D) a commission system

Question 69

Scenario 2-3
Axel Corp., a new clothing line manufacturer, plans to reach out to the local fashion stores and wholesale distributors around the country. It also plans to offer a discount on its products for the first 100 customers and establish a coupon system for the first six months of sales. The marketing team is looking to create a television advertisement and is looking for ways to improve on the ideas that they have come up with for the ad.
(Scenario 2-3)Which of the following is most likely to provide Axel Corp.with a reasonable amount of media time at a rate lower than that provided by an advertiser? 

A) Production houses 
B) Sales promotion agencies 
C) Database consultants 
D) Media specialists

Question 70

Scenario 2-1
As one of the world's largest computer and technology developers, Dell, Inc. has never been a stranger to advertising. However, due to a consistent decline in market share, the Texas-based company is looking to overhaul its advertising efforts for the first time in years. In the past, Dell found success promoting its products as some of the most inexpensive computer products in the market. However, the company's new ad campaign, which will be targeted toward more high-end users, will make no mention of product price. The company is looking to reinvent its image and believes that the first step in doing so is to revamp its outdated advertising campaign.
(Scenario 2-1)Dell plans to strengthen its relationships with the media,industry associations,and its various competitors.In such a scenario,Dell would hire ________ to help strengthen their relationships.

A) a public relations firm 
B) a market research firm 
C) a creative boutique 
D) a database agency

Question 71

Which of the following is an example of outdoor support media? 

A) Podcasts 
B) Billboards 
C) Catalogs 
D) Public relations

Question 72

Scenario 2-2
Brush Strokes is an art supply store located in a town with a population of about 100,000 people. The town is also home to a major State University. Brush Strokes gets a majority of its business from the student population. It uses the services of a local full-service advertising agency to promote themselves. A large part of its marketing budget has been used in running small advertisements in the local and school newspapers at the beginning of each term. The advertising agency is now recommending that Brush Strokes devote a majority of its budget to running television spots during broadcasts of the University's football and basketball games. While the owners of Brush Strokes agree that they could be doing a better job of reaching a larger portion of the student population, they have not come to any conclusions about the best way to accomplish this.
(Scenario 2-2)Which one of the following would Brush Strokes' full service agency be least qualified to handle? 

A) Researching about the buying trends of the company's customers 
B) Creating a television commercial 
C) Forecasting dividend earnings of stockholders 
D) Generating awareness about the brand

Question 73

Which of the following best describes a media conglomerate? 

A) It is a firm that operates multiple media combinations. 
B) It is a firm that is a specialist in one particular form of media. 
C) It is a firm that specializes solely in buying media time and space. 
D) It is a firm that uses print media instead of broadcast media

Question 74

Scenario 2-2
Brush Strokes is an art supply store located in a town with a population of about 100,000 people. The town is also home to a major State University. Brush Strokes gets a majority of its business from the student population. It uses the services of a local full-service advertising agency to promote themselves. A large part of its marketing budget has been used in running small advertisements in the local and school newspapers at the beginning of each term. The advertising agency is now recommending that Brush Strokes devote a majority of its budget to running television spots during broadcasts of the University's football and basketball games. While the owners of Brush Strokes agree that they could be doing a better job of reaching a larger portion of the student population, they have not come to any conclusions about the best way to accomplish this.
(Scenario 2-2)The owners of Brush Strokes have called a meeting with their agency to determine ways in which it can benefit most from advertising.The agency has agreed to help in identifying the benefits of the brand,its target audience,the best competitive positioning,and developing a complete plan.In such a scenario,which of the following services is the agency offering? 

A) Media buying services 
B) Billing services 
C) Account services 
D) Marketing services

Question 75

Scenario 2-3
Axel Corp., a new clothing line manufacturer, plans to reach out to the local fashion stores and wholesale distributors around the country. It also plans to offer a discount on its products for the first 100 customers and establish a coupon system for the first six months of sales. The marketing team is looking to create a television advertisement and is looking for ways to improve on the ideas that they have come up with for the ad.
(Scenario 2-3)A(n)________ can help Axel Corp.in designing and executing direct response advertising campaigns using traditional media.

A) database consultant 
B) public relations firm 
C) fulfillment center 
D) interactive agency

Question 76

Scenario 2-1
As one of the world's largest computer and technology developers, Dell, Inc. has never been a stranger to advertising. However, due to a consistent decline in market share, the Texas-based company is looking to overhaul its advertising efforts for the first time in years. In the past, Dell found success promoting its products as some of the most inexpensive computer products in the market. However, the company's new ad campaign, which will be targeted toward more high-end users, will make no mention of product price. The company is looking to reinvent its image and believes that the first step in doing so is to revamp its outdated advertising campaign.
(Scenario 2-1)In order to reinvent the company's image,Dell puts together a team comprised of members from its marketing department who will be responsible for every aspect of the advertising campaign.The company decides that involving employees in the campaign will allow it to maximize the profits generated from the new campaign.This team will be an example of a(n): 

A) creative boutique. 
B) full-service advertising agency. 
C) fulfillment center. 
D) in-house agency.

Question 77

Design Solutions has two television network channels and its monthly magazine,Bling,is the most popular fashion magazine in the country.It also has a number of websites for its television channels and online sports news.Design Solutions is an example of a ________.

A) creative boutique 
B) media conglomerate 
C) media specialist 
D) digital/interactive agency

Question 78

Scenario 2-3
Axel Corp., a new clothing line manufacturer, plans to reach out to the local fashion stores and wholesale distributors around the country. It also plans to offer a discount on its products for the first 100 customers and establish a coupon system for the first six months of sales. The marketing team is looking to create a television advertisement and is looking for ways to improve on the ideas that they have come up with for the ad.
(Scenario 2-3)Which of the following agencies would help improve the ideas that Axel Corp.has for its advertisement? 

A) A direct marketing agency 
B) A creative boutique 
C) A database agency 
D) A fulfillment center

Question 79

______ is a high-speed technology that allows consumers to customize their programming and target very specific audiences.

A) Transit 
B) Crowdsourcing 
C) Broadband 
D) Cable

Question 80

Carmel Inc.has come up with the idea of creating a television ad for its new range of assorted cookies.The marketing executives approached RT Designs who will be filming the ad,preparing a set to record the ad,and employing an actress to play the role of a little girl enjoying her cookies.RT Designs is an example of a ________.

A) creative boutique 
B) production house 
C) fulfillment center 
D) media specialist