Industry Overview: Advertising and PR

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Posted by The Editors on December 3, 2012
Overview

Maybe you're an English major whose friends are all receiving job offers from consulting firms, banks, and the like, and you're wondering just what the heck the business world has to offer you. Maybe you're a banker, but frustrated because your job doesn't let you express creativity or take advantage of your abiding interest in popular culture and the media. Or perhaps you're a struggling writer or artist who's tired of living on ramen and happy-hour buffets, and you've come to the conclusion that a cell phone and a steady paycheck don't necessarily make a person a sellout. Then you turn on the television or pick up a newspaper or magazine, and suddenly it hits you: Why not work in advertising or public relations?

Advertising

Advertising is big business. The biggest advertisers spend billions of dollars each per year to market their products and services; General Motors and Procter & Gamble, for instance, each spend about $4 billion annually on advertising, direct mail, and promotions. That translates to lots of work for advertising agencies.

In 2006, traditional advertising activities in the U.S.-the creation and dissemination of TV, print, and radio ads-generated $13.1 billion in revenue for advertising agencies, up 4.2 percent from the previous year, according to the 2007 Advertising Age Agency Report. Interactive advertising yielded another $3.6 billion in revenue during the year, while health care advertising-not considered a traditional field-brought in $2.1 billion.

In broad terms, an advertising agency is a marketing consultant. It helps the client-for example, a consumer goods manufacturer like Nike or a service provider like Charles Schwab-with all aspects of marketing, from strategy and concept through execution. Strategy involves helping the client make high-level business decisions, such as determining which new products to develop, or how to brand or define itself to the world.

Concept is where the agency takes the client's strategy and turns it into specific ideas for advertisements-such as a series of ads featuring "extreme sports" athletes for a soft-drink maker whose strategy is to enter the teen market. Execution is where the agency turns the concept into reality with the production of the actual ads: the print layout, the film shoot, the audio taping. Full-service agencies also handle the placement of ads in print and electronic media so that clients reach their intended audiences. "If you thrive on variety, you'll probably like advertising," one insider said. Sometimes the agency works in conjunction with the client's marketing department. In other instances-when the client doesn't have a marketing department-the agency takes on that role.

PR

PR has long taken a backseat to advertising in terms of industry revenue and prestige, but with the proliferation of media outlets and the increasing complexity of the marketing landscape, it's growing in size and importance. In 2006, the PR industry generated $3.1 billion in revenue, according to the 2007 Advertising Age Agency Report. Unlike advertising, which is paid media exposure, PR involves communicating the organization's message through the news media, whose supposed objectivity lends credibility to the message and thus makes it more powerful. The goal in PR is to make your client-or your company, if you work in-house in a corporate or marketing communications position-look great. PR professionals work primarily with members of the press to ensure that newspapers, magazines, and radio and TV outlets run stories favorable to their clients.

In addition, they might speak on behalf of client organizations; arrange for clients' presence at appropriate industry events; help mitigate harmful publicity when, for instance, the federal government sues a client for antitrust violations; or help clients come up with an overall marketing strategy for, say, a new product launch. PR professionals serve companies, government agencies, charitable organizations, and famous individuals-in short, just about anyone seeking to promote a public image, message, or product.

The old advertising model is dead. No longer can advertisers expect to reach their target audiences by force-feeding ads to TV viewers and magazine and newspaper readers. TV viewers are no longer limited to just a handful of television networks; the spread of cable TV means that viewers now have a seemingly limitless array of programming options. And no longer are readers limited to the newspapers and magazines for sale at their local newsstand; nowadays, they can readily access any publication that has a presence online, as well as a host of other websites. Indeed, media markets are fragmenting-breaking up into smaller chunks of viewers, readers, and Net surfers with specific interests and demographic characteristics.

The U.S. Census Bureau reports that as of July 2005, 14 percent of the U.S. population was Hispanic, 13 percent was black, and 5 percent was of Asian descent. Hispanics account for half the nation's annual population growth.

By 2050, Hispanics will make up 24 percent of the U.S. population-a number that doesn't include undocumented individuals. For multicultural advertising agencies, the growing diversity of the country means increasing business opportunities. In the U.S., advertisers already spend a pretty chunk of change reaching multicultural markets. For example, Hispanic-focused advertising spending totaled $3.3 billion in 2005.

Look for continued strong growth among multicultural agencies, as U.S. demographics change and advertisers look to reach specific markets with more tailored advertising.


Like so many other industries, advertising has experienced lots of consolidation in recent years as companies join forces to lower costs and stay competitive in the global marketplace. According to the 2007 Advertising Age Agency Report, in 2006, the top four marketing organizations-Omnicom Group, WPP Group, Interpublic Group, and Publicis Groupe, which together own 35 of the 50 largest U.S. advertising agencies-accounted for 57.4 percent of the U.S. marketing communications business. In advertising and PR, bigger size means more clout with media outlets-hence, lower advertising costs and more PR pitch phone calls answered by news editors. This trend is also a result of the fact that by owning several different advertising or PR agencies, a single holding company can control several competing accounts without conflict of interest.


Just a decade ago, interactive or online advertising was brand-new. These days, it's become central to all kinds of advertisers' strategies, and any agency that wants to stay competitive now relies on its interactive efforts to generate a growing percentage of its revenue. Indeed, many advertisers are desperate to hire pros with significant experience in so-called integrated marketing.


These days, most folks are jaded by the overload of ads in traditional media, such as TV and newspapers, and often ignore them. As a result, advertisers have been vying for attention through nontraditional means, such as product placement in movies and on TV. Sponsorship is another major tactic for companies looking to promote their brands. For instance, San Francisco's AT&T Park-previously known as SBC Park, and Pac Bell Park before that-and the Fleet Center in Boston are two professional sports venues that count sponsorship dollars among their revenue sources.
Municipalities have invited corporate sponsors to fund events while allowing them to stock prominent locations with their products and feature the city or town in their advertisements. And thanks to Channel One, advertising has been a part of daily life at many U.S. schools.


Amid increasing public concern about issues like human rights and the environment, more and more companies see value in associating their brands with social movements. For instance, microprocessor maker and Intel rival AMD spearheaded a campaign in 2006 titled "Is Green, Saves Green." Saatchi's print campaign for Tide detergent showed how much energy you can save by doing laundry in cold water. Dow Chemical's "The Human Element" campaign, launched in the U.S. in 2006 and expanded internationally in 2007, was designed to reinforce the company's commitment to engage challenges like affordable and adequate food supply and personal health and safety. Many big PR firms have practice areas devoted to social marketing.


Like the advertising industry, the PR sector has been marked by extensive consolidation over the past decade or so. Bigger size means more clout with media outlets, and a single holding company can control several competing PR accounts without conflict of interest. In general, ad and PR agencies that exist under mammoth holding companies such as Omnicom and WPP operate as standalone businesses, but there are cases where business synergies result from new ties between agencies. For instance, if you go into PR, you may end up trying to place stories about an ad campaign created by a subsidiary of the same holding company that owns your firm.


The Internet has changed the face of PR. On the one hand, it offers a wealth of opportunities to get the word out on behalf of your client. And PR professionals can reach specific audiences as never before, by targeting (or creating) industry- or interest-specific news sites, message boards, and blogs.
The flip side of the coin is that it's now harder than ever to manage the release of information. And the interactive nature of the Internet means that negative news about your client can pop up anytime, anywhere-from a popular blog to a high-traffic message board. Many online news sites are updated 24/7, so PR professionals with high-profile clients have to be constantly vigilant.


The PR industry has been notoriously lacking in terms of training for young professionals. In many agencies, most new employees still suffer through a sink-or-swim, learn-as-you-go period early in their careers. However, many agencies are beginning to recognize the benefits of offering formal training-to orient new employees, to ensure that valuable knowledge is available across the agency, and to help retain valuable staffers.

Though boutique agencies are growing in number and revenue, the big names continue to handle most of the accounts-and earn most of the dollars. They also are the primary source of employment opportunities. In addition to the size of the firm, you'll need to think about its location, its client list, and the kind of advertising it does: branding vs promotional, general vs specific industries, all media vs specific media.


In the past decade, global has become the way to go. Several huge global marketing and media conglomerates now dominate the advertising industry. These include Omnicom, the WPP Group, Interpublic Group, Havas, and Publicis Groupe. They are joined by advertising agencies that have expanded their operations by opening offices around the world and by acquiring other marketing and media companies. Together, these firms own many of the major players in traditional and interactive advertising. Publicis Groupe, for example, owns Publicis Worldwide, Saatchi & Saatchi, and Leo Burnett Worldwide.


While a lot of hot shops have been snatched up by the big global holding companies, there are still plenty of smaller shops-some with as few as five employees. Often these are creative boutiques-agencies started by people from bigger agencies who have hung out their own shingle to follow their vision of what makes good advertising. Mad Dogs & Englishmen in New York and Butler, Shine, Stern, and Partners in Sausalito, California, are two of the hundreds of smaller shops.


Interactive agencies specialize in online marketing and advertising. This includes everything from conceiving, designing, and placing banner ads to designing corporate websites to developing e-commerce solutions for corporations. This segment of the industry was devastated in the early 2000s when dotcoms, which spent a lot of money on online advertising, started collapsing left and right. But the segment has undergone a healthy recovery, as advertisers from a broad range of industries try out new online strategies with a more realistic perspective on what Internet advertising can do.


Firms that specialize in providing PR services include Edelman, Ketchum (owned by Omnicom), and Hill and Knowlton (owned by WPP). Internally, one difference between PR and ad agencies is that PR firms tend to organize themselves around practice areas, such as public affairs, investor relations, labor relations, crisis management, entertainment, media relations, consumer product marketing, and corporate reputation management. Smaller PR firms, like ad agencies, may specialize in a particular field, such as the Internet, health care, or telecommunications.


Beyond the traditional ad and PR agencies, there are a number of other job sources in this field. Research firms, such as IRI (Information Resources, Inc.), Nielsen (of TV-ratings fame), Gallup, and J.D. Powers all measure the success of agency campaigns. Other firms specialize in certain aspects of the advertising world, such as direct marketing or promotions. Although some of these are independent, others are owned by big players.

Also, large corporations usually have marketing communications (marcom) departments that create and produce brochures, product sheets, and other marketing collateral. Marcom departments also often write and distribute press releases and perform other PR functions. And some large companies even create and produce some or all of their own advertising. For example, Charles Schwab and MasterCard both have in-house ad departments.

The advertising and PR industries were hit hard by the decline of the dotcoms, the tech downturn, and the overall recession. But things are looking up as companies are starting to spend again, albeit not at the levels of the late 1990s. As advertising and PR budgets increase, agencies add new jobs. The U.S. Bureau of Labor Statistics is optimistic, predicting employment in advertising and PR to grow 22 percent by 2014. As the industry continues to expand the ways it reaches the consumer, it will also continue to seek out new, creative talent to launch its campaigns.

You'll face stiff competition if you want a career in advertising or PR. Still, these industries remain sexy to many job seekers. In advertising, many writers and artists are drawn to agencies' creative and production departments because the salaries are much higher in the ad game than in the starving artist game. For business types, advertising offers an exciting proximity to the creative process, if not an actual role in that process. PR offers liberal arts types jobs that can be steady and fairly lucrative while still being creative. Pros in both industries often enjoy perks like dinners, plays, and ball games with clients. And everyone in these industries gets to spend their days with the hippest, most culturally aware coworkers around-and play a role in creating the stories and advertisements that shape our culture.


No matter where you work in advertising or PR, you'll have the opportunity to experience quite a bit of variety as you progress in your career. You'll get to work on different accounts, each with its own problems to solve. Over time, you might work on everything from computer software to sporting goods. One advertising account management insider says, "It's never dull. You're always working on a bunch of different things. If you thrive on variety, you'll probably like advertising."


One insider swears that he says just that to his wife every evening when she asks how the office was that day. Of course he's kidding, but he likes the atmosphere. "It's light," he says. "There are a lot of young people." A creative insider says, "For a corporate environment, it's the most relaxed you can get. The dress is casual, you can joke around with people, there may be a pool table or a Ping-Pong table or that kind of thing...." Another advertising creative insider agrees: "Even when I have a bad day at work, I laugh really hard several times during the day." A PR insider says, "We all go out together all the time." An advertising account management insider sums it up: "A lot of fun and interesting people work in the industry."


You can change the way people think or speak with an effective ad campaign. Imagine your work entering the consciousness of people across the globe-just ask the people involved in the "Just Do It" ad campaign for Nike.


No matter how much some people in the industry would like to believe good advertising is the same thing as art, the fact is that it's not. "It's probably as base a consumer-oriented thing as you can do," says an insider. In fact, in advertising you may end up advertising a product you don't think much of. And PR's no different in this regard. Someone's got to spin the story for the oil company after the big spill at sea; someone's got to defend the chemical company that doesn't want to pay damages to the third-world community over which its facility released a cloud of noxious gas. That someone works in PR.


Job security can be tenuous, due to the amount of money and work a single client can bring to an agency. For example, an agency might lose a big account, and 20 percent of the staff is suddenly laid off.


Advertising creatives are unanimous in occasionally disliking aspects of the agency's relationship with the client, and most people in the business have been frustrated by their dealings with clients at some point. One insider says, "We had a bagel client who insisted that we not have any punctuation in the ad copy. It was the most absurd client demand I'd ever heard." Another says, "You can spend six months working on a project that just suddenly dies [because the client changes its mind]." Another complains about foreign clients that don't "get it," like the Asian auto manufacturer that kills great creative ads because it doesn't understand American humor. An account management insider says, "I hate having to babysit the client." As another insider notes, though, "You need the client. So you have to compromise your integrity sometimes."

A lot of people outside the industry think that advertising is all about creative work. In fact, there are three primary career tracks: creative, account management, and media. In each of these areas (and in PR as well), there is a fairly standard hierarchy of positions. Generally, new hires start out as account coordinators or assistant fill-in-the-blanks, then "assistant" is dropped from the title (assistant copywriter becomes copywriter). Next, you are promoted to senior fill-in-the-blank, vice president, and then senior vice president.

Account management and media positions require a BA or BS, preferably in communications, English, journalism, business, or economics. Jobs on the creative side often only require a two-year degree and a strong portfolio, although a BA won't hurt-especially for copywriters. For those without a degree, the industry is full of administrative jobs.


These are the suits who manage the relationship with the client and develop strategy. In advertising, account executives manage the creation of the pitch and the ad campaign. In PR, the account executives generally take responsibility for implementing the public relations program, working with the client, drafting press releases, and pitching stories to the media. Salary range in advertising: junior account executive, $40,000 to $62,000; senior account executive, $70,000 to $89,000; account supervisor, $79,000 to $96,000. In PR, the account executive range is $34,000 to $58,000; the range for account supervisor is $66,000 to $93,000.


Working with the art director, you come up with the copy (words or script) based on the strategy that's been defined for the ad campaigns. The ads you create go into your portfolio, something you'll need if you want to switch jobs. Salary range: junior copywriter, $34,000 to $45,000; senior copywriter, $54,000 to $67,000; and really good ones make more.


Art directors work with the copywriters to develop the story line, and they are responsible for the visuals in an advertisement. They prepare layouts for print ads and television storyboards and oversee filming of television commercials. As with the copywriter position, advancement is based on the strength of the portfolio. Salary range: junior art director, $49,000 to $90,000; senior art director, $62,000 to $118,000.


The media planner learns about people's viewing and media habits in order to plan how and where to place ads based on the client's objectives and budgets. This is very numbers-oriented work with little client contact. The media buyer negotiates with media sales reps to buy and place ads for the client, calculates rates and budgets, and makes sure that ads appear correctly. In PR, the equivalent position is media relations; this person is responsible for calling up members of the media and pitching story ideas in an effort to get media coverage for a client. Salary range: assistant media planner or media buyer, $33,000 to $45,000; media planner and media buyer, $50,000 to $76,000; media director, $95,000 to $125,000.


This type of job is more specific to PR firms. Many companies hire media spokespeople or communications experts to handle all media contact, event publicity, and media requests. You can find these positions by working up through a company's communications or public relations department, or by transferring from an agency. Salary range: $85,000 to $126,000.


Many PR agencies hire specialists to work in particular areas. Lots of agencies have a speechwriter, often a former reporter, who ghostwrites op-eds (opinion and editorial pieces) or speeches for clients in order to help raise their visibility. A specialist in investor relations would help a client enhance its image among investors or perhaps help it raise additional capital. Labor relations, public affairs, media relations management, corporate reputation management, consumer products marketing, and crisis communications are other common specialties. Salary range: $50,000 to $100,000 or more.

Advertising isn't easy to get into. Most people start out at the entry level and jump agencies as they move up-insiders say that it may even be essential to move from agency to agency in order to get to work on new clients. Once you pick your area-creative, account management, media-it can be difficult to change, unless you want to go back to the entry level. Public relations agencies are more likely to hire somebody with several years of experience outside PR, but that depends on the experience. Proof that you can juggle lots of projects, write well, work under deadline, understand media, and serve a client will help you land a job. If you're interested in getting into this industry, keep these things in mind:

  • Many advertising agencies hire people only at entry level. If you're in college and you know you want to enter the industry, see if you can get some work experience. (Every year a huge number of internships in advertising and public relations are available.) If you've interned, you'll have a definite leg up on others trying to land a spot.
  • Before an advertising interview, look at some magazines and watch television. Pick a couple of campaigns that you like and be able to explain why you think they're good. Think about how they target a particular audience and what they do well.
  • In creative, you'll need to present your book, a portfolio of projects you've helped design or write copy for. If you don't have one, but want to break into the industry, then make one. Create some ads or concepts on your own ("on spec" in industry parlance). Your book must demonstrate your design or writing ability and your marketing sense. Creatives must take a different path into advertising. For them, it's less about whom they know, where they went to school, or what their grades were. Creatives must have a good book to get a job. As one insider puts it, "It's not about your resume; it's about your book."
  • Advertising and PR are all about selling products. To get hired, you need to sell your abilities. If you can't communicate why you're better than all the other people who want the job, then you probably don't belong in the industry.