Edited by Shintaro Okazaki
Chapter 23: Analysis of the Relationship between Advertisers and Advertising Agencies in the Global Market
Hirokazu Takada, Makoto Mizuno and Ling Bith-Hong INTRODUCTION The major tasks for companies operating in the highly competitive global marketplace are to formulate advertising and branding strategies, and to implement them by working together with advertising agencies. In the global market, companies must coordinate these activities across different countries; thus the relationship between companies and advertising agencies becomes highly complex. One of the key questions confronting managers is whether or not to use the same advertising agency or its network for the entire operation across countries to achieve cohesiveness and better coordination of advertising activities. An alternative strategy is to use local advertising agencies to better respond to local needs/wants. Obviously, some companies may choose a combination of both strategies, or a variant of these, e.g., globally networked agencies for key markets along with local agencies for the rest of the markets. Recently, global advertising agencies have responded to the needs of global companies by building a global network through alliance with other agencies such that these agencies can provide the necessary service whichever country their client company is operating in. Furthermore, a majority of these advertising agencies strictly adhere to the policy that they will work for just one company in the industry; thereby the client and agency can work very closely by sharing a great amount of information between them, and the agency is highly involved not only in daily operations but also in strategic decisions. It is well known that Japanese advertising agencies, such as Dentsu and...
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