Question 1

In terms of the 75/15/10 rule, the 10 represents the amount of money that is spent on creating or designing the ads.

Accepted Answer

The answer of In terms of the 75/15/10 rule, the...

Question 2

Using crowdsourcing to create advertisements is normally cheaper than using an advertising agency.

Accepted Answer

The answer of Using crowdsourcing to create advertisements is normally...

Question 3

One method to measure the creative reputation and capability of an advertising agency is to look at a list of awards the company has received for past campaigns.

Accepted Answer

Awards received by an advertising agency for its past campaigns are a good indicator of its creative reputation and capability.

Question 4

In selecting an advertising agency, it is important to assess the agency's production capabilities and media purchasing capabilities, even if these services will not be a part of the contract with the agency.

Accepted Answer

The answer of In selecting an advertising agency, it is...

Question 5

Discovering an advertising agency's client retention rate helps reveal how effective the agency has been in working with various clients.

Accepted Answer

Knowing an advertising agency's client retention rate indicates how well the agency has been able to satisfy its clients and meet their needs, resulting in clients choosing to continue working with the agency for further projects. This, in turn, reflects the agency's effectiveness in its work with different clients.

Question 6

In terms of selecting an advertising agency, a creative pitch is a formal presentation addressing a specific problem, situation, or set of questions.

Accepted Answer

A creative pitch is indeed a formal presentation that addresses a specific problem or situation and provides a possible solution for advertising agencies to win over a new client.

Question 7

In terms of selecting an advertising agency, without clearly understood goals, it is virtually impossible to choose an agency because company leaders may not have a clear idea of what they want to accomplish.

Accepted Answer

Without clearly understood goals, it is difficult for company leaders to communicate their needs and expectations to an advertising agency, making it challenging to select the right one for their business.

Question 8

Crowdsourcing is the process of outsourcing the production aspect of an advertisement to the public.

Accepted Answer

Crowdsourcing involves obtaining ideas, services, or content by soliciting contributions from a large group of people, especially from an online community, rather than from traditional employees or suppliers. It is not limited to outsourcing the production aspect of an advertisement but can include various tasks such as problem-solving, idea generation, and funding.

Question 9

When two or more companies compete for a contract with creative pitches, the process is sometimes called a shootout.

Accepted Answer

This is a common term in business and advertising, where multiple companies present their ideas or proposals to win a contract or project. The shootout format allows the companies to showcase their strengths and differentiate themselves from their competitors.

Question 10

A media service company negotiates and purchases media packages, which are also known as media buys.

Accepted Answer

A media service company is specifically designed to negotiate and purchase media packages, which are also known as media buys.

Question 11

The first step in selecting an advertising agency is to set and prioritize goals.

Accepted Answer

Setting and prioritizing goals is an important first step in selecting an advertising agency as it helps to ensure that the agency selected will be able to meet the specific needs and objectives of the business.

Question 12

In terms of selecting an advertising agency, requesting client references should occur before the initial list of applicants is screened, because the client list can be used to eliminate agencies where there is a conflict of interest.

Accepted Answer

Requesting client references typically occurs after the initial screening of applicants to ensure that the shortlisted agencies have a good track record and to verify their capabilities, rather than using it as a primary criterion for elimination.

Question 13

Reference requests are not usually made during the selection of an advertising agency, especially for finalist companies.

Accepted Answer

Reference requests are commonly made during the selection process of an advertising agency, especially for finalist companies, to verify their past performance and client satisfaction.

Question 14

The request for a creative pitch would occur after the list of candidate agencies is reduced to only two or three agencies.

Accepted Answer

This is true as a creative pitch involves a significant amount of time and effort on the part of both the agency and the client. Therefore, it is usually requested only from a limited number of top contenders after the initial evaluation process.

Question 15

If an agency had represented a dine-in restaurant in the past but no longer has the account, it would be a conflict of interest for another dine-in restaurant to hire the agency.

Accepted Answer

There is no conflict of interest unless the two restaurants are in direct competition with each other. Simply having represented a dine-in restaurant in the past does not automatically create a conflict of interest for representing another dine-in restaurant. However, if the two restaurants are in the same market or geographic location, then it could potentially create a conflict of interest.

Question 16

To be effective in terms of using an external agency, at least 75 percent of the advertising budget should be spent on media buys.

Accepted Answer

When using an external agency, typically at least 75 percent of the advertising budget should be spent on media buys to ensure that the message reaches the target audience through various channels such as television, radio, print, and online.

Question 17

Matching the size of an advertising agency to the size of the client company is typically not a key issue in agency selection.

Accepted Answer

Matching the size of the advertising agency to the size of the client company is often important because larger agencies may have different processes and resources than smaller companies, and vice versa. The size of the agency should be considered when selecting one to ensure it can meet the needs of the client.

Question 18

A boutique agency provides a full range of advertising services.

Accepted Answer

A boutique agency typically specializes in a specific aspect of advertising or serves niche markets, rather than offering a full range of advertising services.

Question 19

Winning a variety of advertising awards for creativity assures a company that the agency can be objective in developing a campaign.

Accepted Answer

Winning advertising awards for creativity does not necessarily guarantee that the agency will be objective in developing a campaign. Creativity and objectivity are two different factors, and it is possible for an agency to prioritize creativity over objectivity in their campaigns.

Question 20

If an agency has relevant experience in a particular product category but not with the exact same product, then it creates a conflict of interest.

Accepted Answer

It is not necessarily a conflict of interest if an agency has relevant experience in a particular product category but not with the exact same product. In fact, it could be seen as an advantage as the agency brings knowledge and best practices from a similar product category. A conflict of interest would arise if the agency has a financial or personal interest in a competing product or if they have a relationship with a client that poses a conflict with the new client's interests.

Quiz 5: Advertising Management