Question

Topic: Strategy

Few Questions On Business Planning For Ad Agency.

Posted by Anonymous on 5/27/2008 at 12:13 PM ET 1000 Points
Good day everyone,

I'm starting an ad agency (sorta) here in australia focusing on college marketing. I've spoken to 1 of the local university management in allowing me to insert advertisements into their University Year Book which will help them cut down their cost so far I've gotten the approval and have been allowed to insert 5 advertisements per year book. It went pretty smoothly in getting the approval since my cousin work in the University.

Now that I've taken the first step, I'll like to get into more universities (another 3 or 4) and get approval on this concept before I start selling ad space to companies.

As I'm very new to business and my experience is limited. I've gotten some trouble in planning my business which I hope you guys can advice me on...

1) Planning and organizing advertisements so it evens out - Each year book has 5 advertisements space (1 advertisements = 1 page) and it's estimated to be around 20,000 year book/university. When selling ad spaces to advertisers, how do I package my advertising spaces so in the end it'll even it out? I have a huge problem here because I need to make sure I get 5 advertisement per book and make sure it reaches 20,000 year book. Also when there's more than 1 university (say about 3), It'll be even tougher even the advertisements out therefore I need a solution to package my advertising spaces to advertisers so it'll be potentially make the "even out" process easier.

Take for example, I package my advertising space as 5,000/order 10,000/order 20,000/order. If 3 advertisers took on 10,000/order while 1 advertisers took on 20,000/order and the last advertiser took on 5,000/order it will not even out the advertising space in the year book. What is a good way to package it then? I can't force each advertisers to take on 20,000/order only as it'll be unflexible for them. Further to that, I see that advertisers would potentially ask if they can select which University they would like to advertise on (which makes the "even out" process even touger as it is)

How do ad agencies organize their advertisements if their in my situation using my platform of advertising?

-----

Approaching the Universities and Advertisers (Setting appointment via phone call)

2a) Calling Universities - To setup an appointment so that I can have a face to face meeting with them and present them my idea and allow them to understand how it'll benefit them in cutting cost. Safe to say the department I'll need to contact for such discussion would be Student affairs/council? I hope to have a telephone script which will successfully set up an appointment with them. I don't want to reveal too much because it's tough and confusing explaining on the phone but if I reveal too little they might not be interested or worse assume "Oh basically advertising in our tuff? nuh uh!" I need to grab their attention and interest for a face to face meeting..

2b) Calling Advertisers - When approaching companies like Coke, Mcdonalds or any huge companies which has a targeted demographic of age between 17 - 27. Which department and who should I ask to contact? (Marketing?) and also I face the same dilemma as above which is setting up the appointment for a face to face meeting

Hopefully someone can advice me on the telephone script for both universities management and advertisers. (sample would be great)

I thought off dropping by personally (both universities and advertisers) and try to setup an appointment in person (would this be something okay to do or it'll be rude even I was just trying to setup an apppointment?)

I guess that's about it, sorry for the lenghy explanation as I hope to be as clear as possible so you can understand. Thank you for taking the time in reading this, any advice and suggestion is greatly appreciated!
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RESPONSES

  • Posted by jcasalou on 5/27/2008 at 1:31 PM Accepted
    1) If each university runs 20,000 copies of their year book annually I would sell ads individually per university.

    You can offer multiple ad discounts. i.e. each ad is $100 but if they order 2 ads they'll receive 5% off, 3 ads 10%, 4 ads 15%, and all 5 ads = 20%.

    This offers them more flexibility and an incentive to purchase more ad space.

    If you have multiple universities to choose from then you need to sell the ad space on a first come first serve basis. They just need to know there are "x" amount of ads left for each university.

    A way to help reduce this problem is to focus on selling ads to local businesses near each university. This will be more beneficial for local businesses to invest in ads closer to their location.

    Another orgnization you may want seek out is regional or national companies. They will have the money and desire to buy advertising in multiple year books.

    2a) I think you are correct in contacting the student government/council to propose the idea. The one problem that you may face is the university wanting to cut you out and go seek out selling ads themselves.

    To counter this you would have to have a list of potential ad buyers

    2b) You are correct...this would come out of the marketing/advertising budget.

    Overall you have a solid idea...however if your universities are anything like here in the states. You'll realize that universities are run like businesses. With their own marketing departments who do these types of things already.

    You have the advantage of having an "in" at your cousin's university so that's a start!

    Good Luck!

    Jonathon Casalou
    Business Development & Marketing
  • Posted on 5/28/2008 at 10:42 AM Author
    Thank you so much for responding and your advice is definitely helpful. The multiple ad discounts idea is great. On your response to 2a, in order to counter the problem of being cut out by university management you mention that I need to have a list of potential ad buyers. Do you mean that informing the university management that we've already had clients that has sign up with "us" for this etc.?

    I hope to get some assistance in forming a conversation script to both University and Advertisers in successfully setting up a face to face meeting
  • Posted by Ghost Writer on 5/28/2008 at 5:08 PM Accepted
    The universities will want to see the list of potential advertisers, and likely want the power to reject any of them and to see the ads ahead of time. Remember that they are publicly funded institutions with carefully-guarded public reputations.

    If I was running a university, I would want to make sure that ads for condoms, beer, sex phone lines, etc. (maybe even the military or tobacco companies, depending on the political bent of the students/parents) were excluded.

    For the same reputation protection reasons, I would want final say over the ads themselves, to ensure they are appropriate and in line with university policies.

    So, be careful to approach potential advertisers outside of these potentially controversial areas.

    On the plus side, you can look at the university's websites to determine their main benefactors/supporters, both corporate and government, and approach them with your ad pitch. They will be more likely advertisers, and have no trouble passing the 'sniff test' with university officials.
  • Posted on 5/29/2008 at 3:52 AM Author
    Dear Ghost Writer,

    Thank you for your solid advice on the several factor which the University management will be concern of.. I'm well aware of it and has taken necessary steps to ensure the collaboration will be beneficial for them without any negative impact.

    I hope to get advice on conversation script of setting appointment for both University management and advertisers..

    Such as who should I contact, which department, what should I say and not say to ensure an appointment can be successfully set up..
  • Posted by Chris Blackman on 6/1/2008 at 1:31 AM Accepted
    Josh

    I'm confused. Are you producing the whole year book? Or are you just proposing to universities that they include advertising in the year books that they are already producing?

    If you are proposing to include advertising into the year books they already produce - how does that cut their cost? Do you mean you will generate some revenue for them, to offset their cost? Their gross costs, I feel, will actually grow because they will have to include the advertising and manage placement etc, that certainly has some cost component attached. The revenue generated from that advertising must more than offset that cost.

    You need to speak to the enrolments marketing manager for each university or college. They are probably the people responsible for producing the year book, and would be the people to present with your idea. I would be surprised if they had not already thought of the same idea themselves, though?

    Similarly, when contacting advertisers, you need to speak to their Marketing managers, or, in very large organisations, the media planners and buyers in the marketing department.

    You could also try large media aggregated buying groups like Harold Mitchell, Total, Group M, Media Decisions, Merchant & Partners, etc.

    Hope that helps

    ChrisB
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