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Which of the following statements explains why an organization would want to use an outside advertising agency?


A) An outside advertising agency saves money for the client.
B) An outside advertising agency helps the client gain more prestige and a better image.
C) An outside advertising agency has more knowledge of the brand's identity and its previous promotional activities.
D) An outside advertising agency provides the client with the services of highly skilled individuals who are experts in a number of areas including creative, media, and research.

Correct Answer

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An advertising agency that wants its employees to develop expertise in servicing a variety of accounts should use a(n) ________ structure.


A) group system
B) creative boutique
C) departmental system
D) in-house agency

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The department in an advertising agency that is responsible for analyzing,selecting,and contracting for ad space or time that will be used to deliver its client's advertising message is the ________ department.


A) public relations
B) account services
C) marketing research
D) media

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The ________ is responsible for creating the visual portion of an ad such as layouts and the commercial storyboards.


A) account executive
B) product management department
C) art department or art director
D) copywriter

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An agency books television media space at a cost of $1,000,000.If cash discounts do not apply,what price does the agency pay to the media company?


A) $985,000
B) $1,150,000
C) $850,000
D) $1,000,000 and the client pays the agency commission

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International agencies formed by mergers and acquisitions of mid-sized agencies in order to provide integrated marketing communications services worldwide are called:


A) superagencies
B) multinational agencies
C) integrated agencies
D) full-service global firms

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Which of the following would NOT be a valid reason for switching advertising agencies?


A) dissatisfaction over the quality of the advertising produced by the agency
B) conflicts over compensation policies
C) a change in research methodology
D) a stagnation or decline in sales of the product

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Lack of sufficient internal expertise and personnel growing stale while working on the same product might be reasons why a company might move away from:


A) a brand marketing system
B) an in-house agency
C) the use of full-service advertising agencies
D) the use of creative boutiques

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A typical direct-response agency is divided into three main departments:


A) creative, media, and research
B) account management, media, and research
C) account management, creative, and media
D) creative, media, and production

Correct Answer

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Under the cost-plus compensation method,all of the following costs might be included in the calculation,EXCEPT:


A) profit margin
B) out-of-pocket expenses
C) media costs
D) agency self-promotion costs

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The Performance by Results system reflects three groups of performance measures.Which of the following is NOT one of those measures?


A) comparison to previous year's communication budget
B) marketing communication effectiveness
C) overall business performance
D) agency process evaluation

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________ are agencies that specialize in offering services,such as database management,direct mail,and creative and production capabilities.


A) Creative boutiques
B) Sales promotion agencies
C) Direct-response agencies
D) Public relations firms

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The ________ department coordinates all phases of production to see that the ads are completed on time.


A) media
B) production
C) art
D) traffic

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The ________ department is becoming an increasingly important part of the agency business as many large advertisers consolidate their media buying with one or a few agencies to save money and improve media efficiency.


A) traffic
B) media
C) production
D) product management

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Which type of ad agency is most likely to assist the client in areas such as marketing strategy and research,campaign planning and execution,and media planning and buying?


A) a creative boutique
B) a full-service agency
C) a media buying service
D) a collateral agency

Correct Answer

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A ________ is an agency organizational structure in which each functional area is set up as a separate department.This structure is called on as needed to perform its specialty and serve all of the agency's clients.


A) departmental system
B) group system
C) creative boutique
D) matrix system

Correct Answer

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Which of the following is NOT a valid criticism of the commission compensation system for an ad agency?


A) It is difficult to administer.
B) In periods of media cost inflation, the agency is disproportionately rewarded.
C) There is an incentive to avoid noncommissionable media.
D) Media costs do not relate directly to effort or expertise expended by agencies.

Correct Answer

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Target's internal creative department handles the design of each of these elements EXCEPT:


A) direct-mail pieces
B) branding initiatives
C) weekly circulars
D) in-store displays

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Independent companies that specialize in the purchase of radio and television time are known as:


A) media measurement bureaus
B) mid-sized agencies
C) full-service agencies
D) media buying services

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Creative boutiques are agencies that:


A) limit their client service to creative planning and execution
B) have resulted from advertisers wanting to save money in buying media space
C) can perform the same functions as full-service agencies for their clients
D) are used only when research is not important to marketing success

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