Question 1

In medium- and large-sized advertising agencies,the organization is generally formal and is structured according to the:

Accepted Answer

Medium and large agencies are usually structured in a departmental or group system.In the department system,agencies are organized around various functions.In the group system,the agency is divided into a number of "little" agencies or groups.

Question 2

The primary reason that some advertisers set up a wholly owned in-house ad agency is to:

Accepted Answer

Some companies set up a wholly owned in-house agency (or house agency)to save money and tighten control over their advertising.

Question 3

An ad agency's traffic department:

Accepted Answer

The agency traffic department coordinates all phases of production and makes sure everything is completed and approved before client and/or media deadlines.

Question 4

Research is closely allied to advertising and an important tool for marketing professionals.Most firms do not maintain a fully staffed research department.Instead,they use independent:

Accepted Answer

But most firms do not maintain a fully staffed research department.Instead,they use independent research suppliers or consultants.

Question 5

In the advertising agency business,_____ are people and organizations that provide specialized services.

Accepted Answer

The people and organizations that provide specialized services to the advertising business are called suppliers.Without their services it would be impossible to produce the billions of dollars' worth of advertising placed every year.

Question 6

An ad for Calvin Klein's Eternity fragrance for men and women contains a black-and-white full-size photograph of an attractive,young couple in a romantic embrace.Who is in charge of the photograph portion of the ad,its placement on the page and the location and appearance of the product and product name in the ad?

Accepted Answer

Ads also use nonverbal communication.That is the job of the art directors,graphic designers,and production artists,who determine how an ad's verbal and visual symbols will fit together.The art director deals with all of the nonverbal parts of the ad.

Question 7

Because few agencies have the capability to produce television ads in-house,most rely on independent:

Accepted Answer

Few agencies have in-house TV production capabilities.Small agencies often work with local TV stations to produce commercials.But the large agencies normally work with independent production houses that specialize in film or video production or both.

Question 8

When the advertising agency of Lopez and White purchased several hours of television time for its customers' commercials from KLOX-TV,the agency received 15 percent of the gross amount charged by the station.The 15 percent:

Accepted Answer

Media commission is compensation paid by a medium to recognized advertising agencies,usually 15 percent (162F1F1F1S1F1F1F103 percent for outdoor),for advertising placed with it.

Question 9

The most commonly cited reason for changing agencies is:

Accepted Answer

Dissatisfaction with agency conduct,or performance,is the most commonly cited reason for agency switches in every country.

Question 10

Which of the following designs Web pages and ads which are both effective and efficient?

Accepted Answer

Similar to art studios,Web design houses employ specialists who understand the intricacies of Internet programming languages and can design ads and Web pages that are both effective and cost efficient.

Question 11

In advertising,a retainer is:

Accepted Answer

In the straight-fee or retainer method,agencies charge for all their services,either by the hour or by the month,and return any media commissions earned to the client.

Question 12

Which of the following is a current trend in advertising?

Accepted Answer

Larger advertisers are forcing the use of the pay-for-performance approach and are not paying commissions.There is a countervailing trend to conglomeration that has allowed for the creation of lots of small specialty agencies.The number of media options has increased greatly as has audience empowerment.

Question 13

What is the most critical factor in the agency-client relationship?

Accepted Answer

Many forces influence the client/agency relationship.Generally they can be grouped into the four Cs: chemistry,communication,conduct,and changes.The most critical factor is the personal chemistry between the client and people in the agency.

Question 14

What is probably the greatest disadvantage associated with in-house ad agencies?

Accepted Answer

But usually companies sacrifice more than they gain.The biggest risk for in-house agencies may be a loss of objectivity.

Question 15

Some advertisers ask for or imply that they want to see what the agency will do before they sign on.The agencies thus must create a:

Accepted Answer

Some advertisers ask for or imply that they want a speculative presentation,meaning they want to see what the agency intends to do for them before they sign on.

Question 16

An agency that earns a _____ charges a basic monthly fee for all of its services to the client and retains any media commissions earned.

Accepted Answer

There are two pricing methods in the fee system.With the fee-commission combination,the agency charges a basic monthly fee for all its services to the client and retains any media commissions earned.

Question 17

JWT Agency has designed a quarter-page magazine ad for Promise vegetable-oil spray.The job required the services of a photographer to produce photographs of various foods that will "taste better with Promise".The invoice for the artwork from the photographer was for $200.If JWT uses the traditional markup,how much did the advertising agency bill Promise vegetable-oil spray company?

Accepted Answer

Markup: A source of agency income gained by adding some amount to a supplier's bill,usually 17.65 percent.To get the traditional agency commission of 15 percent,JWT would markup the $200 bill by 17.65 percent which comes to $235.

Question 18

If the Tomlinson Agency were to buy an ad in Western Horseman magazine for the manufacturer of Reins man saddles,the ad would cost $3,000.How much money would the advertising agency bill the saddle manufacturer?

Accepted Answer

The saddle manufacturer would pay the full price ($3000)to the agency.The agency would then subtract the commission before paying the magazine.

Question 19

Which of the following statements about the speculative presentation is true?

Accepted Answer

Some advertisers ask for or imply that they want a speculative presentation,meaning they want to see what the agency intends to do for them before they sign on.The presentation process also allows the agency and the advertiser to get to know each other before they agree to work together.

Question 20

_____ supply agencies with artwork and illustrations for advertisements.

Accepted Answer

Art studios design and produce artwork and illustrations for advertisements.

Quiz 3: The Business of Advertising