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Decision system analysis of advertising agency decisions

DSA of advertising agency decisions

WoonBong Na College of Business Administration, Kyung Hee University, Seoul, South Korea

153

Roger Marshall School of Business, Auckland University of Technology, Auckland, New Zealand, and

Arch G. Woodside Department of Marketing, Carroll School of Management, Boston College, Chestnut Hill, Massachusetts, USA Abstract Purpose – The purpose of this paper is to report the use of decision system analysis (DSA) mapping the streams of communications (i.e. interactions), thoughts, actions and decisions involved for advertising agencies as executives in these firms gain client approval, and design creative, promotional and media strategies. Design/methodology/approach – This study uses DSA. This little-used technique requires protocol analysis, interviews and observation before transcription of the organizational decision processes into flow charts. Findings – The research first identifies four models, describing four specific decision types, then derives a general model from them. Executives from four agencies not in the original sample later confirms the models. The models generally confirm the existing knowledge base, with a few minor exceptions. Research limitations/implications – This qualitative technique suffers the common malady of the researchers losing objectivity because of their immersion in the case-companies. Wherever possible the research employs quantitative techniques to verify observational judgments. Practical implications – The “thick description” and the summary charts of the advertising agency decision processes have the potential to aid agency decision makers to better structure their decision processes. Originality/value – The findings themselves are of significance to those involved in the advertising industry, and there is an element of originality in the classification and the thick descriptions of advertising agency decision systems. The resurrection of DSA and the demonstration that the technique is viable and valuable is also a contribution of the study. Keywords Decision theory, Systems analysis, Decision making, Protocols, Advertising agencies Paper type Research paper

Introduction We clearly need to know what behavior people perform before we explain why they perform them. Not only has little study been devoted to overt behavior, but also little attention has been given to delineating the basic sequence of behaviors people must perform to purchase a product, or other sequences of behavior of interest in marketing (Peter, 1981, p. 144).

The fundamental purpose of this report is to come to a better understanding of how agency personnel and their clients make marketing communication decisions, within

Qualitative Market Research: An International Journal Vol. 12 No. 2, 2009 pp. 153-170 q Emerald Group Publishing Limited 1352-2752 DOI 10.1108/13522750910948761

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an advertising agency context. The research method used for the study, decision systems analysis (DSA), is not particularly fashionable; indeed, the authors found few references to DSA in reported marketing studies since the early, exploratory work on industrial purchase processes of some 25 years ago. Nevertheless, that the groundbreaking work of Webster and Wind (1972a), Sheth (1973) and others has stood the test of time so well supports the authors’ use of this “direct” research method (Mintzberg, 1979). The parallel between the early work, where commercial buying centres were first investigated (Vyas and Woodside, 1984), and the research reported here, goes further than this early work. The purpose of these early studies was to use inductive logic to formulate a general model from a series of structured observations. The developed model may guide academic researchers and both marketing and purchasing strategists who were interested in an independent description on how organizations make their purchase decisions. The study reported here does very much the same thing, but for advertising decisions in general rather than for purchasing decisions in general. The results obtained here provide a degree of validation for descriptive theory building in earlier direct research on advertising decision processes (Capon and Scammon, 1979; Fleck, 1973). The advertising decisions under inspection are of substantial importance to business in general, and do not lie just within the interest domain of a relatively small number of advertising agencies. A company’s objectives matter little, and neither do the policies and strategies they put into place to achieve these objectives matter as much as their explanation to customers. How good their technology, is or even how well they can satisfy the needs of some customer group all become immaterial if they do not communicate their intentions to the appropriate audiences in an appropriate manner. Advertising is not cheap. Consumer-good companies often spend up to 5 per cent of their sales revenue upon marketing communications; such advertising-to-sales ratios represent substantial expenditures. Business-to-business companies and high-technology companies are not exempt from advertising expenditures, either. It has long been held necessary to support sales representatives in the field both with general advertising, to create an umbrella image, and with direct communications to build relationships with their actual and potential clients. This following discussion develops by first summarizing knowledge about types of advertising decisions, and then discussing how advertising agencies choreograph various decision groups within their organizational structures. A brief discussion of the historical use of DSA, and then a detailed description of how the research method contributes on this occasion follows, including a detailed presentation of the nuances involved in the thinking-deciding processes of advertising managers. Agency structure and advertising decisions Most advertising agency clients require the same services from their agencies no matter what business the clients are in; clients often find it difficult to analyse their own problems objectively (Na and Marshall, 2001). Hence, although agency organization structures are quite varied (from a group system to the more common departmental system), the functions that agencies perform are often standardised.

These functions include planning, creative, marketing and account services, as well as management and financial services. Most clients expect an advertising agency to make recommendations about the objectives and strategy of some advertising campaign. The agency should also indicate how it intends to use its skills in carrying out strategy and tactics. Many agencies accomplish this through a planning board or committee, others through informal meetings. An important part of planning is preparation of the budget. The more commonly understood function of an advertising agency concerns the provision of creative services for the advertiser. These services typically include copywriting, artwork design and production of the finished advertisement or commercial. Similarly, most advertising agencies offer marketing services that included media planning and buying as well as a host of research services. The office management oversees the various clerical functions that support the agency’s operations, and ensures efficient delivery; whilst the accounts department keeps track of expenses in revenues. The account executive, the person who acts as a liaison officer to coordinate the activities of the agency and maintain contact with clients, coordinates all these services. Several account executives, each working with different companies or brands, usually report to an account supervisor. The supervisor is a senior management person who coordinates a number of accounts. The use of decision system analysis in marketing The epigram by Peter (1981) nicely sums up the use of direct research (i.e. descriptive modelling using face-to-face data collection methods) in marketing. After all, not only are normative models – developed from observation of practice – useful inputs to the formulation of competitive strategy to executives in an appropriate decision-making mode, but they also make a good starting-point for further theoretical development. Bowman (1963) describes “boot-strapping”, where a decision model made from the decision-maker’s own rules and behaviour often outperforms the decision-maker’s own decision concerning a problem upon which he or she focuses. Hulbert (1981) explains that the higher performance of bootstrapping versus the decision-maker’s own processes relates to bootstrapping eliminating the error component introduced by the decision-maker. Researchers have long used empirical, observational studies in the study of industrial purchase processes. Robinson et al. (1967) developed a well-known descriptive model of industrial buying behaviour, which categorises the purchase decision process according to purchase situation. Webster and Wind (1972b) proposed a descriptive model of organizational buying, which incorporated the concept of the buying centre. Sheth (1973), developed a model, based on observation, that encompasses multiple buying decisions. The Sheth Model distinguishes three main elements of industrial purchasing; the psychological characteristics of the individuals involved, the conditions that precipitated joint decision making and the conflict resolution procedures affecting joint decision making. Bonoma et al. (1978) provide a global model focused upon the dyadic relationship between buyers and sellers. Researchers have also used observational techniques to study the supplier choice processes for a single product or single company (Cyert et al., 1956; Pettigrew, 1975; Vyas and Woodside, 1984; Wilson, 1984). These types of research projects have severe limitations with regard to generalization, in that they rely upon one decision process or

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several decision processes limited to one firm. Most of the data for Moore’s (1969) study, for instance, comes from a total of seven, three day, “sit-in” observations of industrial buyers in various companies. Moore does not select any specific product or material, nor observe the entire supplier choice process; but he does observe the different incidents in the work-lives of these individual buyers during the three-day observation sessions. Vyas and Woodside (1984) extended this research to inductive model building. These researchers provide an inductive model from studying several decision processes of six industrial firms in five disparate industries. Woodside (1988) says that such a global model may be useful as a general outline or map, but may not apply to industrial purchasing strategies within a specific industry. Woodside and Wilson (2000) report DSA findings on decisions involving decisions of purchasers and marketers of industrial solvents; again – even though the DSA technique was refined – the study was for a single product. In the advertising area, however, few descriptive modelling studies are available related to client-agency decision processes. Specific advertising decisions for which models have been developed include the selection of items for retail advertising (Rados, 1972), media decisions (Fleck, 1973), budget decisions (Capon and Hulbert, 1975; Marschner, 1967), agency-client relationships (Capon and Scammon, 1979), and special campaign decisions (Capon and Hulbert, 1975; Capon and Scammon, 1979). For all the advantages observational techniques offer to the understanding of decision behaviour, a number of methodological problems exist with direct research methods. Most of the criticisms centre on the difficulty of generalization and the problem of subjectivity. Analysts can overcome these problems to a point, however, in a number of ways discussed during the explication of the research methodology of the present study as follows. Research method Following from the prior discussions of the services offered by advertising agencies, this study focuses on four decision areas; the creative, media, budget and general client-agency relationship decisions. After the start of the study, evidence emerged that, contrary to prior research, the firms in the sample did not make budget decisions within the advertising agency-client communication contexts. Rather, the advertising companies make these decisions with little or no consultation with the agency. Similarly, client-agency relationship decisions were contained mostly within an annual campaign process. Thus, to gain a wide sampling base for our study, we settled upon four decision-topic areas: the annual campaign decision, the development of the creative campaign, developing the promotional campaign and media decisions. Five propositions guide the research; the researchers based them upon both logical assumption and evidence from the literature. These propositions are presented here as they are formative to the research process: P1.

The advertising agency’s organizational structure (team or functional system) influences the structure of decision-making groups enacting decision processes. This proposition is very straightforward. For example, in the team system an account supervisor would usually be in charge of the group. However, in a departmental structure system, it is more usually a copy director or an art director who would be in charge of the group. Although we would expect the decision roles to be constant no matter what the structure

(i.e. influencers, buyers, gatekeepers, and deciders), the functional roles involved will almost certainly differ. P2.

The types of advertising decision (creative, media, promotion and campaign) affect the structure of decision-making groups. This, again, makes intuitive good sense. It is to be expected that different types of advertising service require different types of expert for that particular problem-solving situation. Other authors have espoused this view (Dunn and Barban, 1982). Thus, the structure of decision-making groups will vary across each of these decision-type situations.

P3.

The decision situation (complexity, novelty or importance) influences the decision process and the size of a decision-making group. The buying situation determines the size, role structure and decision process within group decisions (Crow and Lindquist, 1985; Doyle et al., 1979; McQuiston, 1989; Na and Marshall, 2001). Clearly, factors such as intangibility, unfamiliarity, complexity and simply the costs of getting the decisions wrong will all have a structural affect upon the decision-group composition.

P4.

Conflicts are rare and are resolved in ways perceived to be rational. Advertising is simply one kind of professional service, and a professional association provides support and a code of conduct in almost every market, as for other professional services. Professional services require a great degree of confidentiality and trust on the part of the purchaser, who lack the detailed information and skills of the professional being hired. We assume that if a conflict does occur under these circumstances, then it will be resolved professionally and rationally.

P5.

The function, types of decisions, and the decision situation (complexity, novelty and importance) affect the structuring criteria and decision rules adopted (for evidence supporting P5, see Bettman and Park, 1980; and Vyas and Woodside, 1984). The proposition has face validity as well, in that very simple decisions only involve a small number of people, for instance, whereas a larger group of managers are more likely to share more risky decision situations. As each role-player brings her/his own decision criteria to the table, then the nature of the risks involved in the particular decision process are reflected in the decisional criteria.

Research instruments Following the advice of Woodside and Sherrel (1980), Vyas and Woodside (1984) and Woodside (1988), multiple methods of data collection for analysing and describing the decision-making process were designed into the data collection method. We combined protocol analysis with DSA, document analysis, interviews and direct observations. Direct observations are useful to supplement and guide more focused types of analysis, and could include attendance at face-to-face meetings between departments (for instance, at the creative team and account executive team meeting, or client and agency staff meeting). Protocol analysis, which involves instructing subjects to verbalise their thoughts while they are in the process of making a decision, can be applied after direct observations indicate the key decisions to study. Document analysis

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is an unobtrusive method of research that is useful to crosscheck the information collected from interviews and protocols, while discrepancy between verbal and written reports can be resolved by further interviews. DSA provides a useful framework for structuring the resulting data. DSA is a descriptive research method that includes mapping the flows of interactions, decisions and behaviour within and between enterprises. DSA is an iterative process, where flow charts are developed, then taken back to the players and respondents for review, revision. Two or more principal participants in the decision process achieve final confirmation (see Morgenroth (1964) for an exposition on DSA methods). Sample Two agencies participated in the field study. The researchers selected them after setting several criteria for participation and only after completing a length search (i.e. three months) for firms that met all criteria. One agency is a major international agency whilst the other is a smaller, local agency operating only in New Zealand. Table I provides the agency characteristics. In all, the researchers collected 11 advertising agency decision cases, described in Table II. They offer a useful mixture of advertising situations from industrial producer to consumer packaged good producer; from promotional and creative campaign and media decisions to annual campaign, and product to service situations. The cases have numbers rather than names, as much of the information is confidential for competitive reasons. Following Bettman and Park’s (1980) recommendation, the protocols of the in-depth interviews are rephrased into short sentences that indicate the sequence of the Agency

NZ size ranking

Annual billings

Number of staff

3

$58 million

70

22

$14 million

22

DDB Needham Table I. Participating agency characteristics

MacHarman Ayer

TV Print Other TV Print Other

Agency

Client

System

Products

Decision type

DDB

McDonalds

Team

Consumer

Cadbury

Function

Consumer

Continental

Function

Service

Epsom

Function

Industrial

Promotion Creative Media Creativea Creative Creative Media Annual Creativea Creative Media

Ayer

Table II. Decisions covered

Media mix

Note: aPrint only campaign

65.2% 34.7% 0.1% 52% 46.8% 1.2%

Case no. 5 7 6 8 9 10 11 1 2 3 4

decision processes. The number of protocols in each case relates to the complexity of the case and ranges from a high of 25 to a low of seven. It seems a little odd, but the dichotomy between new buying decisions and routine buying decisions within an organizational buying context do not seem to exist in these advertising agency decision situations. As was found by Capon and Scammon (1979), the relationship between a client and an agency appears to be ongoing. This is clearly not always true, but it was true for all of the cases with which we were involved. The degree of importance, however, does vary between each case. Clients were asked to respond to a scale (where “1” ¼ little importance and “100” ¼ extremely important) to indicate how important each decision was to them. Table III provides the detailed data. The number of participants in each decision situation and the length of time taken to complete each decision cycle also vary between cases, as seen by inspection of Table III. Although these situations are necessarily limited, we believe that, overall, they give a good cross-sectional view of what goes on in typical advertising agency decision situations.

DSA of advertising agency decisions 159

Flowchart development The researchers identified suitable cases and appropriate decision participants after a series of structured and unstructured discussions with agency executives. Each decision participant then verbalised their behaviour and thought processes in a series of protocols. This process was tedious, but not difficult given the full (even enthusiastic) cooperation of the agency personnel. Once these protocols were established, they were verified where possible by checking any available documentation, and by cross-checking each individual decision participant’s account of the process with the accounts of those with whom they were interacting. As these decision situations were not particularly sensitive within the agency, this process went very smoothly. The first step in the development of the flowcharts, which is a central procedure for DSA, was to represent all of the protocols in abbreviated phrases. Then they were collated into the four decision-type categories; annual campaigns (one case, 34 protocols), creative campaigns (six cases, 68 protocols), promotional campaign (one case, 15 protocols) and media decisions (three cases, 20 protocols).

Case no. 1 2 3 4 5 6 7 8 9 10 11

Importance rating

Number of protocols

Number of participants

Time taken (weeks)

93.3 7.7 50.0 68.3 60.0 33.3 84.0 50.0 79.0 92.0 17.5

25 11 7 8 12 7 12 8 14 14 9

3 3 3 3 5 3 5 3 9 9 4

36 2 1 3 12 2 12 4 16 40 1

Notes: 1 – little important; 100 – extremely important

Table III. Case data

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At this stage, the researchers employed two independent judges and briefed them about the situation. Then one of the authors, and these two independent judges, each assembled the protocols into a decision flowchart for each decision area. This is not an easy task, and the three judges spent some time discussing the task before they independently attempted it. That this time was well spent becomes clear with consideration of Table IV, in which analysis by Kendall’s coefficient of concordance shows that the three judges developed a very similar flowchart sequences. Post hoc model validation To perform the final stage of the modelling process required a series of post hoc, unstructured interviews with agencies (in the same city but not included in the sample), to gain their acceptance of the developed models. The authors conducted four such interviews, and full acceptance of the models experienced. To be fair, the advertising agency executives consulted were at first taken aback by the complexity of the four decision-type flow charts, and a real effort was required to study them and relate them to what goes on in their own agency before they gave agreement – they verified the more general, generic, model very swiftly, however. Results As the flowcharts are so detailed, it is necessary to provide abbreviations for the titles of the individuals and committees within the decision process. The same key, in Table V, is common to each of the four sub-charts. The reader can follow the detailed processes through which the different types of advertising decision pass from an inspection of Figures 1-4. Rather than describing

Table IV. Analysis of the similarity of the flowchart ordering by the independent judges, using Kendall’s coefficient of concordance for four models

Table V. Key to the abbreviations in the flowcharts

Models Annual campaign Creative campaign Promotion campaign Media decision

W

x2

DF

p-value

0.90 0.99 0.92 0.87

89 200 39 57

33 67 14 22

, 0.001 , 0.001 ¼ 0.004 ¼ 0.001

Abbreviation

Meaning

AD CD MD MM W HO GAD CGH MDR ATD RBC

Account director Creative director Media director Media manager Writer Head office Group account director Creative group head Managing director Art director Review board committee

DSA of advertising agency decisions

N

Client's briefing on market situation, sales trends, market share and budget with AD, CD, MD/MM

Satisfied?

Further interpretation

START

Y Results briefing with AD, CD, MD and Client

Need independent research?

Y Research? N

161

Conduct research

Y N

Conduct internal research

Based on the information given, AD, CD and MD/MM have formal meeting to discuss the direction (core meeting)

More info?

Conduct research Y

N AD formulates advertising goals and strategies

Informal, internal meeting with AD, CD and MM to discuss AD's suggestions

Y

Need RBC?

Satisfied?

N

AD revises as comments from CD, MD/MM

N Y

Satisfied? Y N

N

Satisfied?

N

RBC with: AD, CD, GAD, MM/MD, CGH, MDR

Presentation to client with AD, CD, MM/MD, GAD, CGH, MDR

AD revised based on comments

Satisfied? Y

Y

Informal meeting with AD-CD, AD-MD/MM, CD-MD/MM

AD revises

Need to confirm with HO (overseas)?

Y

Y N

AD & Client go to HO

Y

Y

RBC with GAD, AD, MDR, CGH, CD, W, ARD, MD/MM

N

Satisfied? End

CD & MD/MM revise alternatives

Fix the team alternative

Need RBC? Y

N

Satisfied?

AD meets CD, MD/MM to inform about advertising objectives and strategy; CD develops alternatives for creatives; MD/MM develop for media

Implement

Satisfied?

N

N

Presentation to Client

Y

Satisfied?

N

Figure 1. Actual campaign decision process

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Client & AD discuss marketing situation, long-term advertising goals & objectives

Part of annual plan?

Conduct research

Start

Satisfied? Y

Y Information search activities

Need research?

Meet with CD, MD/MM to discuss direction

N

N Do further analysis

N AD prepares formal documents on advertising objectives

Seek secondary data

Y CD, MD/MM start to develop creative alternatives

Formal meeting with Clients, CD, MD/MM

Y

Satisfied?

High Team system?

Y

Importance level? Low

N

N Informal meeting between CD, 2Ws & 2 ATDs

AD revises; informal meeting with Client CD selects the team; 1xW &1xATD

AD and selected team meet informally N Select the Team alternative

Internal department conducts research

Need an independent research company?

Y Need a pre-test?

Y

N Results confirm alternative?

Independent company conducts research

Y

N

N

Need an RBC?

Y

RBC with MDR, GAD, AD, CGH, CD, W, ARD

N

Figure 2. Creative campaign decision process

CD revises or prepares another alternative

Fix the agency's alternative

Satisfied?

END

Y N Y

Presentation to Client

Satisfied?

Implementation

each figure, it seems more appropriate at this point to go back to our propositions and discuss them before moving on to the construction of a general model. Four identified stages are common to all of the models, and feature in the global model presented shortly.

N

Part of annual plan?

START

Client requests the idea for promotion

AD undertakes the request

DSA of advertising agency decisions

Y

163 N

Is timing good?

Based on annual plan, AD suggests a promotional campaign to Client

AD & Client to await better time

END

Y Information search for selected promotional items

Need research?

AD, MD/MM & CD have informal meeting to share opinions about the working schedule (timing is critical in this decision)

Satisfied?

N

Need independent company?

Y

N

Internal department conducts

Y

N

Invited company conducts

Results - briefing with Client, AD, CD, MD, MM

Fix the team alternative

Further interpretation

Y CD starts to develop creative alternatives. MD & MM also start

Informal meeting of AD with CD, CD with MM/MD, and AD with MM/MD

Need RGB? Y RBC with MDR, GAD, AD, CGH, CD, W,ATD

Fix the agency alternative

Presentation to Client

N

Satisfied?

Y

Implement

END

N

Findings for P1: organizational structure influences decision-group structure P1 is concerned with the difference in decision-group structure and decision flow that might come about within different agency organization types. That this proposition is well founded becomes evident from a scrutiny of cases 7 and 9. The former case is handled in the team system, whereas the latter is handled (by the same agency) within a functional structure system. Both decisions concern creative campaigns for both TV

Figure 3. Promotional campaign decision process

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START

N

Y

164

Client discusses the problem of media: E.g. - budget change - new product launch - another medium needed

Information search activity for the most efficient media schedule

N

Based on the annual plan or revised strategy, MD/MM suggest/revise original media schedule to meet the situation

Choose the alternative (s) (Team alternative)

AD & MD/MM have formal meeting

Related creative work?

AD sets up strategies

Y Invite CD for discussion

N Y Satisfied?

Need RBC?

Y

Formal meeting with AD, CD, MD/MM

RBC with MDR, GAD, AD, MD/MM

N Fix the agency's alternative

Y

Satisfied?

N

MD/MM revise or prepare alternative

MD/MM revise the alternative Need formal meeting with Client?

Figure 4. Media decision process

Y

N

AD presents to Client

END N Y

Formal presentation to Client

Satisfied?

Implement

and print, and the level of importance is somewhat similar (84 for case 7 and 79 for case 9). For case 7, however, only five executives take part in the decision process, whilst in case 9 there are nine participants. These two cases also exhibit a different decision flow. For case 7 it is sufficient that the account director formulates advertising objectives and then passes the baton to his colleagues to do their job. Case 9 calls for an informal meeting to formulate strategy, alternatives are formulated and a review board committee is involved. Findings for P2: advertising decision types affect decision structure P2 states that the types of advertising decisions (creative or media) affect the structure of the decisions. Cases 5-8 concern a promotional campaign, a media decision, a creative campaign concerning TV and print media, and a creative campaign concerning print media only, respectively. As the same agency makes all these decisions, it seems reasonable to compare them. The account director is concerned in

every situation, but the media manager is only concerned with the first three. The creative director is not included in case 6, whilst the creative group head only features in cases 5 and 7. Writers are required in neither case 5 nor case 6. Findings for P3: size of the decision group affected by importance of decision In P3 the importance, novelty or complexity of the decision situation impacts upon the size of the group and the decision process. The data in Table VI strongly supports this proposition.

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Findings for P4: group decision conflicts are rare P4 concerns whether or not conflict emerges in advertising agency-client decisions – because of the extent of trust and professionalism displayed the observers expected very little overt conflict to occur. The observations support this contention well, as in only three cases differences of opinion arose (once between an account director and a client, and twice between an account director and his colleagues). In each situation, the conflict was resolved swiftly and without heat. Of course, there could be some sort of bias here, as the players were aware that they were under observation. Findings for P5: type of decision affects the adoption of decision rules P5 is concerned with how decision situation types affect evaluative criteria and the decision rules. However, it appears as if the participants used non-compensatory decision rules in every situation; at least, we could not identify a situation where they applied compensatory rules. Decisional evaluative criteria varied dramatically among individuals, who tend to carry their criteria with them as they participate in the decisions. Thus, as Tables VII and VIII show, as the composition of the decision-group changes, so do the evaluative criteria used to resolve the problem.

Agency

System

Multinational

Team Functional

National Multinational National

Account director Objectives Budget Reality Impact Benefit Client’s style

Functional Team Functional Functional

Decision type

Importance rating

Number in decision

Number of protocols

Creative Creative Creative Creative Creative Media Media Media

84.0 50.0 79.0 92.0 7.7 33.3 17.5 68.3

5 3 9 9 3 3 3 3

12 8 14 14 11 7 9 7

Group account director

Creative director

Creative group head

Media director/manager

Relevance Interesting Unique Agency principle

Objectives Relevance Simplicity Exciting Benefit Different Continuity

Relevance Uniqueness Sell the product

Reach Frequency Readership Budget Price Editorial/content

Table VI. Impact of importance level on decision structure

Table VII. Evaluative criteria based upon function

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The global model In spite of all the differences noted between situations, the global model shown in Figure 5 encapsulates some striking similarities. The most obvious of these similarities is that the decisions to go through a number of discrete stages, starting with problem recognition or definition (drawn with a heavy line in each of the earlier flowcharts), and following through to a feedback process where the relationship between agency and client is built and maintained (double lines). The decision-making process itself also seems to follow a logical, and typical, pattern where a decision group is formed (dotted lines), then information sought, then the problem is actually addressed using the information and criteria available, after which an evaluation is made before the final decision is brought down (plain lines). Discussion The four mid-range models and the global model all contribute to advertising practice and theory, but in different proportions. The mid-range models provide convenient synopses of the “thick descriptions” called for by Geertz (1973). On the other hand, many theorists may find the global model of more interest. The findings suggest several implications for executives concerned with advertising decisions. The first, unexpected, finding we stumbled upon was that it is not typical that clients make budget decisions within the agency environment. This finding is contrary to what most authors tell us in advertising textbooks, and advertising executives probably already know that there is usually very little upward flexibility in their clients’ budgets. A second observation is that the players in the decision groups all seemed to have a very clear idea of their role in the process – very little urging or prompting was required from the account directors or anyone else. It is possible that we simply struck two well-organized agencies, but we felt impressed by the timesaving way in which these professionals efficiently went about the decision process. Less well-organized agency readers might find a possible lesson here, and could profit from deliberately setting up decision systems along the lines suggested by the middle-range models. Yet a third insight was provided, in that the decisions made were rarely (never within this data set) considered finite – that is, the agency considered all decisions to have ramifications for the on-going development of the agency-client relationship. That a close relationship does develop is no surprise, Capon and Scammon (1979) noted this conclusion a very long time ago. Logic tells us that agents and clients exchange a

Table VIII. Evaluative criteria based upon type of decision

Creative decision

Media decision

Promotion decision

Annual/long-term objective Relevance to client/situation Unique Simple Exciting Different (tone/manner) Agency principle Budget

Reach Frequency Relevance to client Rate Editorial/quality of program

Budget Research results Annual/long-term objective Timing Benefit Simplicity Exciting

DSA of advertising agency decisions

START

167

PROBLEM AREA DECISION STAGE (1) Annual campaign decision

Creative campaign decision

Promotional campaign decision

Media decision

DECISION-MAKER GROUP COMPOSITION DECISION STAGE (2) The specific decision type

The degree of importance

The organizational system

DECISION-MAKING PROCESSES (3) Information search (3a) Need primary research? Need secondary research?

Problem solving (3b) Need a one-step solution process? Need a two-step solution process?

Evaluation (3c) Need a pre-test for alternative(s)? Need a review board committee?

Final decision (3d) Need a formal meeting/presentation? Need ratification from Head Office?

FEEDBACK PROCESS (4) - Building a relationship Need a revision?

Has the situation changed?

Customer satisfied?

great deal of sensitive and important information during the decision process; this must inevitably lead to a strong, trust-based bond developing between the agency personnel and their clients. The implication for theory of this fact is not quite as positive. The “buy-class model” developed by Robinson et al. (1967), that has such wide acceptance, does not actually apply to this situation. Instead, we suggest substituting importance level. Whilst there are countless levels of importance, there does seem to be two major divisions running through the charts. One decision route is a straightforward single-step decision process, where the strategic considerations are not heavy but where advertising executives need to make swift creative and media decisions. The other route is more akin to a two-stage process, where the strategic questions must

Figure 5. Global agency-client decision process

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first be determined and then the functional decisions made in a more formal way, often including the formulation of alternatives. In the complicated flow chart of a campaign decision, shown in Figure 1, the “need a pre-test or a review board committee” and “need a formal meeting or ratification from head office” tasks repeat at different stages of the multi-decision process. Feedback loops occur more than just once, as the process can be quite protracted and the agency has no wish to follow a path unacceptable to the client. No such repetition occurs in the simpler models, which are sometimes simply subsets of the larger decision. Implication for marketing theory The major findings concerning theory are corroborative rather than new. First, the general model developed does indeed bear a strong resemblance to the classical group-decision models long ago developed by the marketing academic pioneers. A more interesting corroboration of extant theory is also present, in the way in which decisions do go through distinct, discrete and identifiable stages. Problem identification or clarification occurs, mainly between the account executive and the client. Once the nature of the decision is clarified satisfactorily, the relevant decision groups are alerted and mobilized, guided again by that ubiquitous choreographer, the account director. The actual decision process has several sub-components, which also follow a classical decision-phase pattern of information search, problem solving, evaluation and final decision. Finally, there is a feedback process, which is often missing from process decision models of this type, as not many concern the relationship-marketing mode, as is the present experience. This last stage is mainly concerned with making sure that the client is happy with the result, or if the environment has changed in some way as to make a revision necessary. A final word There are many omissions and probably not a few errors here – we freely admit that the technique is still subjective and personal, no matter what controls the researchers put in place. The labour intensity of the research process also militates against the large sample and broad scope required to be able to generalize confidently from the results. Nevertheless, we also feel that the research is of value as a starting point for further in-depth enquiry, and does contain some interesting insights into the working of what has traditionally been a “black box”, the agency decision process. References Bettman, J.R. and Park, C.W. (1980), “Effects of prior knowledge and experience and phase of choice process on consumer decision processes: a protocol analysis”, Journal of Consumer Research, Vol. 7 No. 3, pp. 234-46. Bonoma, T.V., Zaltman, G. and Johnson, W. (1978), Industrial Buying Behavior, The Marketing Science Institute, Boston, MA. Bowman, E.H. (1963), “Consistency and optimality in management decision making”, Management Science, Vol. 9, pp. 310-21. Capon, N. and Hulbert, J.M. (1975), “Decision system analysis in industrial marketing”, Industrial Marketing Management, Vol. 4, pp. 143-60.

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Woodside, A.G. (1988), “Mapping streams of industrial purchasing strategies: a composite, inductive model of the furniture industry”, Industrial Marketing Purchasing, Vol. 3 No. 1, pp. 52-70. Woodside, A.G. and Sherrel, D.L. (1980), “New replacement part buying”, Industrial Marketing Management, Vol. 9 No. 2, pp. 123-32. Woodside, A.G. and Wilson, E.J. (2000), “Constructing thick descriptions of marketers’ and buyers’ decision processes in business-to-business relationships”, Journal of Business & Industrial Marketing, Vol. 15 No. 5, pp. 354-69. About the authors WoonBong Na is Professor of Marketing and Advertising at Kyung Hee University, South Korea. He is Editor of the Korean Journal of Marketing Management. Before joining academia, he worked for 12 years as Research Director for Daehong Communications, one of the leading advertising agencies in Korea. His research and teaching focuses on advertising, brand strategy and consumer behaviour. Roger Marshall is the Professor of Marketing and Chair of the Marketing Discipline at Auckland University of Technology, in New Zealand. He is a member of the American Marketing Association, the Australia and New Zealand Marketing Academy, the American Academy of Advertising and the International Advertising Association. His research interests lie mainly in business-to-business marketing and research methods. Roger Marshall is the corresponding author and can be contacted at: [email protected] Arch G. Woodside is Professor of Marketing, Carroll School of Management, Boston College and Adjunct Professor of Marketing, AUT University, Auckland. He is a Fellow and member of the Royal Society of Canada, American Psychological Association, Association of Psychological Sciences, Society for Marketing Advances, and the International Academy for the Study of Tourism. He is Editor-in-Chief of the Journal of Business Research (Elsevier Science journal). Business-to-Business Brand Management (Emerald Publishers) is a forthcoming (2009) co-edited book by Mark Glynn (AUT University) and Arch G. Woodside.

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