Question 1

Which of the following statements is true about speculative presentations?

Accepted Answer

A)  Speculative presentations require little time and effort on the part of agencies.
B)  Many agencies do not like to participate in speculative presentations because there is no guarantee they will win the account,and they require time and money.
C)  Speculative presentations are rarely used in the advertising industry.
D)  Most agencies do not participate in speculative presentations to acquire new business.
E)  They are also known as storyboards.F) None of the above
G) A) and B)

Question 2

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

Accepted Answer

A)  group system
B)  departmental system
C)  creative boutique
D)  in-house
E)  decentralizedF) B) and E)
G) B) and D)

Question 3

Most of an advertising agency's expenses are in the area of:

Accepted Answer

A)  media costs.
B)  salaries and benefits for employees.
C)  personal selling.
D)  production facilities.
E)  commissions.F) C) and D)
G) B) and E)

Question 4

A(n) _____ is an advertising agency that is set up,owned,and operated by the advertiser.

Accepted Answer

A)  creative boutique
B)  full service agency
C)  in-house agency
D)  self sufficient agency
E)  collateral agencyF) C) and E)
G) C) and D)

Question 5

_____ are drawings that show what the print ad will look like and from which the final artwork will be produced.

Accepted Answer

A)  Creative briefs
B)  Copywriters
C)  Layouts
D)  Designs
E)  LogosF) D) and E)
G) C) and D)

Question 6

Under a centralized organizational arrangement,which of the following is the advertising manager responsible for?

Accepted Answer

A)  Budgeting and planning media schedule
B)  Coordinating the creation and production of ads and sales
C)  Compensation management
D)  Administering the firm's sales and sales promotion programs
E)  Sales and sales managementF) A) and B)
G) A) and C)

Question 7

Under the _____ system of compensation,the client agrees to pay the agency a fee based on the costs of its work plus some agreed-on profit margin.

Accepted Answer

A)  fixed fee
B)  negotiated commission
C)  fee-commission combination
D)  incentive based
E)  cost plusF) A) and B)
G) B) and C)

Question 8

Which of the following statements about changes in the way advertising agencies are being compensated is true?

Accepted Answer

A)  Most clients do not pay full commissions to their agencies because they prefer to use some type of fee or incentive-based system as they seem more equitable than the commission system.
B)  With the move toward integrated marketing services,it is likely that there will be a return to the commission system of compensation.
C)  From the viewpoints of both the client and the agency,the traditional commission system is much superior to negotiated commissions.
D)  Since most clients want their agencies to be in total charge of the integrated marketing communications process,they are willing to compensate them based on media commissions.
E)  In a negotiated commission system,commission is usually greater than 15 percent.F) B) and D)
G) A) and B)

Question 9

Clients and creative boutiques that have developed their own media strategies may employ _____ to execute them.

Accepted Answer

A)  media specialist companies
B)  full-service agencies
C)  in-house agencies
D)  media departments
E)  product managersF) A) and B)
G) C) and E)

Question 10

A(n) ______ primary function is to provide information or entertainment to its audience.

Accepted Answer

A)  client's
B)  advertising agency's
C)  media's
D)  customer's
E)  advertiser'sF) A) and B)
G) B) and D)

Question 11

Which of the following departments of the full-service agency,analyzes,selects,and contracts for space or time in the media that will be used to deliver the client's advertising message?

Accepted Answer

A)  Research department
B)  Media department
C)  Account management department
D)  Creative services department
E)  Art departmentF) A) and D)
G) A) and E)

Question 12

Which of the following statements is true about superagencies?

Accepted Answer

A)  They were formed when large advertisement agencies were broken down into smaller,more specialized agencies.
B)  Advertisers who became disenchanted with the superagencies moved to form smaller agencies that were flexible and more responsive.
C)  They were formed so that agencies could provide clients with effective supply chain management.
D)  Advertisers who became disenchanted with the superagencies moved to form larger agencies that were inflexible and less responsive.
E)  They were formed so that agencies could provide clients with just-in-time inventory management system.F) B) and E)
G) B) and D)

Question 13

Account planning has become a very important and demanding function in many agencies because:

Accepted Answer

A)  public relations has replaced advertising to achieve global integrated marketing communications.
B)  budgeting services have reduced the redundancy associated with on-task account planning.
C)  marketing research has expanded the creative capacity of ad agencies.
D)  of the increase in the number of marketing communication channels and ways of contacting consumers.
E)  of the reducing roles of account executives.F) A) and E)
G) B) and C)

Question 14

Under a centralized organizational system,the responsibility for planning and controlling the advertising and promotional function lies with the:

Accepted Answer

A)  brand manager.
B)  advertising manager.
C)  product manager.
D)  in-house agency.
E)  vice president of marketing.F) All of the above
G) C) and D)

Question 15

Agency compensation under the commission system is based on:

Accepted Answer

A)  total number of hours worked.
B)  a percentage of a client's marketing budget.
C)  a specified percentage of the cost of any advertising time or space the agency purchases for its client.
D)  a percentage of advertising production costs.
E)  the client's position in the distribution channel.F) C) and D)
G) B) and D)

Question 16

Which of the following can be stated a responsibility of a brand manager in a decentralized marketing system?

Accepted Answer

A)  Planning of the marketing program
B)  Manufacturing the products
C)  Compensating all the employees
D)  Distributing products
E)  Developing departments in the organizationF) A) and E)
G) C) and E)

Question 17

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

Accepted Answer

A)  account executive
B)  copywriter
C)  product management department
D)  research department
E)  art departmentF) A) and E)
G) A) and B)

Question 18

Company A has hired company B to take care of its advertising needs.All company A has to do is provide its products and funds to company B to execute its advertising requirements. Company A is known as a(n) :

Accepted Answer

A)  client.
B)  creative boutique.
C)  full service agency.
D)  advertising agency.
E)  media organization.F) A) and E)
G) B) and E)

Question 19

Which of the following is an advantage of an in-house agency?

Accepted Answer

A)  Increased coordination and cost savings
B)  Different brand images and large number of marketing partners
C)  Increased coordination and greater cost savings
D)  More overall control and freshness in ideas and work
E)  Greater flexibility and more objectivityF) B) and E)
G) All of the above

Question 20

An advertising agency works with its clients under a traditional commission system compensation arrangement.The agency places a 30-second spot for one of its clients on an episode of Friends,which costs $500,000.A reasonable estimate of the agency's commission on this space buy is:

Accepted Answer

A)  $15,000.
B)  $30,000.
C)  $45,000.
D)  $75,000.
E)  $80,000.F) B) and E)
G) C) and D)

Exam 1: Organizing for Advertising and Promotion: the Role of AD Agencies and Other Marketing Communication Organizations

Agency compensation under the commission system is based on:

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

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Which of the following statements is true about superagencies?

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Account planning has become a very important and demanding function in many agencies because:

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Company A has hired company B to take care of its advertising needs.All company A has to do is provide its products and funds to company B to execute its advertising requirements. Company A is known as a(n) :

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Which of the following can be stated a responsibility of a brand manager in a decentralized marketing system?

Correct AnswerverifiedShow Answer

Which of the following statements about changes in the way advertising agencies are being compensated is true?

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_____ are drawings that show what the print ad will look like and from which the final artwork will be produced.

Correct AnswerverifiedShow Answer

A(n) ______ primary function is to provide information or entertainment to its audience.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Under a centralized organizational arrangement,which of the following is the advertising manager responsible for?

Correct AnswerverifiedShow Answer

Under a centralized organizational system,the responsibility for planning and controlling the advertising and promotional function lies with the:

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Which of the following is an advantage of an in-house agency?

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Clients and creative boutiques that have developed their own media strategies may employ _____ to execute them.

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Most of an advertising agency's expenses are in the area of:

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A(n) _____ is an advertising agency that is set up,owned,and operated by the advertiser.

Correct AnswerverifiedShow Answer

An advertising agency works with its clients under a traditional commission system compensation arrangement.The agency places a 30-second spot for one of its clients on an episode of Friends,which costs $500,000.A reasonable estimate of the agency's commission on this space buy is:

Correct AnswerverifiedShow Answer

Under the _____ system of compensation,the client agrees to pay the agency a fee based on the costs of its work plus some agreed-on profit margin.

Correct AnswerverifiedShow Answer

Which of the following departments of the full-service agency,analyzes,selects,and contracts for space or time in the media that will be used to deliver the client's advertising message?

Correct AnswerverifiedShow Answer

Which of the following statements is true about speculative presentations?

Correct AnswerverifiedShow Answer

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