Question

Topic: Advertising/PR

Starting An Advertising Agency.

Posted by Anonymous on 250 Points
I'm starting an advertising agency in a small town outside of Houston, Texas. I have a graphic design degree and have experience running a print magazine and a website. However, none in an advertising agency.

How do advertising agencies get paid? Who pays them? The customer or the vendor.
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RESPONSES

  • Posted by Gail@PUBLISIDE on Accepted
    Whoever hires you -- typically the customer -- pays you. I suggest you request half of the project fee up front to protect yourself, as well. Good luck ;)
  • Posted by Gary Bloomer on Accepted
    Dear Kristen,

    First of all, I do not work in an ad agency.

    However, I like to think that having earned my living as a graphic designer, art director, creative director, and copywriter for the last 25 years at least something of value has drummed its way into my head, so, to the best of my knowledge, ad agencies get paid: per hour; per project, and on a commission basis on the ad space they buy on behalf of their clients. With payment structures varying depending on the job or on the shop concerned.

    The client pays the ad agency (in this case, you); the agency books the space, buys the print, etc., and the ad agency then marks up the vendor fees, pays the vendors for ad space and so on, and pockets the difference.

    But there are two vital things to consider: graphic design is not advertising. And, how much business are you likely to bring in in a small Texas town (or will you work with clients from farther afield as well as with local pitches?).

    You already know what graphic design's about (but for those who may NOT know, it's about creating identity, packaging, web pages, business cards, brochures, prepress, printing, bindery, and so on).

    Likewise, you may already know that advertising is about creating compelling, persuasive SALES messages that position the product, goods, or service by aligning the message with a compulsion and a need, problem, or pain—that then, and over time, conditions the thinking of the lead, prospect, or viewer so that they become FIRST, shoppers, THEN buyers, THEN customers and clients, and then REPEAT customers.

    But the key to your success as an ad agency will lie in the levels and to the degrees at which you're able to SUSTAIN your efforts across the board, and to which you can deliver results.

    So the big question here (and it's a question you must HONESTLY answer) is: Can you do these things? Can you deliver and can you sustain?

    If you can, great! Full steam ahead and damn the torpedoes!

    If you cannot, or worse, if you are not sure, you must plan to succeed by taking stock of your skills and by more than brushing up on what you do not know so that you become the "go to" person.

    If you cannot sustain, might it be better to offer graphic design services FIRST, and to then move into advertising as your confidence grows and your client list expands? CYA and all that.

    Naturally, the choice is yours and I wish you the best of success with whatever you decide to do. But when businesses fail to plan they often plan to fail. It sounds clichéd I know, but it's the truth.

    I hope this helps. Good luck to you.

    Gary Bloomer
    Wilmington, DE, USA
    Follow me on www.twitter.com @Gary Bloomer
  • Posted by Gary Bloomer on Member
    Dear Kristen,

    You'll find a fuller explanation for this question under your other post and again, I want to make it clear that I do not work in an
    ad agency.

    Your clients pay you, you then pay your vendors, which, if you are smart, you'll mark the vendor prices up and bill your client accordingly with the difference being part of your profit.

    You already know about graphic design but to my mind, advertising is different because it's about creating compelling, persuasive SALES messages that position the product, goods, or service by aligning the message with a compulsion and a need, problem, or pain—that then, and over time, conditions the thinking of the lead, prospect, or viewer so that they become FIRST, shoppers, THEN buyers, THEN customers and clients, and then REPEAT customers.

    Here are some additional resources on starting your own shop:

    https://www.tribbleagency.com/?p=3257

    https://advertising.about.com/b/2004/01/09/tip-of-the-week-starting-your-ow...

    https://www.ehow.com/how_2073477_start-advertising-agency.html

    https://www.work.com/starting-an-advertising-agency-1495/

    I hope this helps. Good luck to you.

    Gary Bloomer
    Wilmington, DE, USA
    Follow me on www.twitter.com @Gary Bloomer
  • Posted by Chris Blackman on Accepted
    Don't do it.

    Go get a job in a local ad agency and discover from the inside how the business works.
  • Posted by Chris Blackman on Member
    Don't do it.

    Go get a job in a local ad agency and discover from the inside how the business works.
  • Posted by Gary Bloomer on Member
    Dear Kristen,

    Hmm. What the hell do I know?
    Sound and sage advice from Chris B.

    Gary Bloomer
    Wilmington, DE, USA
    Follow me on www.twitter.com @Gary Bloomer

  • Posted by NatashaChernavska on Accepted
    ASVP/ChrisB suggested a VERY good thing! If you wanna do something, learn if from the inside - this is the only valuable advise we can give you. It's a bit naive - to expect some marketing professionals to give you advices that valued them years of work in advertising. You may learn a lot from us, you will learn times more from books, but NOTHING will replace you what you will learn yourself from real work.

    Get some freelance projects as designer on a side if you want to feel somewhat independent, but Advertising - is a very complex science. Go learn it yourself.

    Whatever happens

    GOOD LUCK!
    Natasha Chernyavskaya
    Artographica
    Los Angeles, CA

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