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What’s an Ad Agency?

An ad agency or advertising agency is a business or service dedicated to planning,

handling and creating advertising for clients. These agencies are independent of clients
and provide their skills and views to sell client's services or products. Advertising
agencies can also manage branding strategies, marketing and sales promotions for its

For an advertising agency, it is very important to realize that they can increase sales with
their effort. Truly speaking, advertising agencies are minds working on the other side of
the internet to increase sales. For a person working as an advertising agent, it is very
important to know about the buyer's psychology.

Those who are working in an advertising agency should know about the various thought
processes that go in the mind of a reader or a viewer, a potential buyer. This will
definitely help to build your business better.

There are ample of theories to explain the process that goes in the buyer's mind when
he/she goes to purchase anything.
AIDA Model





One of the popular features followed by ad agencies is AIDA.

AIDA is an acronym and stands for:

A - Attention

I - Interest

D - Desire

A - Action

The AIDA model states that advertising agency should know how to draw attention of a
buyer to get the customer interested by exhibiting its advantages, benefits and features.
Interest is followed by desire. It is advertising agency's duty to create a desire in a buyer
to buy a specific product.

All three steps of the AIDA policy will help you to stimulate the action towards the
purchase of a product. AIDA theory guides and leads you to build a better advertising
business. BIG B's of advertising world have followed AIDA to generate good
advertisement campaigns.
Another model called DAGMAR has now increasingly become more popular and
comprehensive than AIDA. DAGMAR steps are more defined and easy to apply.

Term DAGMAR is an acronym for Defining Advertising Goals for Measured

Advertising Results. According to DAGMAR, a sale must carry a potential customer
through four stages:

I. Awareness

II. Comprehension

III. Conviction

IV. Action

Suppose you are having a service or product and your customer knows nothing about the
product. As your client is unaware of the product, the first step is to make him aware of
your product by posting advertisement regarding your product on respective websites.

Comprehension is the second step pf DAGMAR. Try to know the answers to these
following questions.

a) What is your product about?

b) What are the product’s potential features and benefits of product?
c) What will your customer get from your product? And How?

Answers to all these questions will help you to get a potential customer.

Next stage is conviction and this is very important. Convince your customer by telling
him the benefits of your product. After convincing, your next step starts i.e. action, which
is not controlled by you. You have to depend on the customer.

However, your previous actions will have a major role to play. If you have been able to
convince, the customer ad have answered him satisfactorily and then you will definitely
be the winner of the day.
Hierarchy of Effects



& Image


Among advertising theories, the hierarchy-of-effects model is predominant. It shows
clear steps of how advertising works. Hierarchy of effects Model can be explained with
the help of a pyramid.

First the lower level objectives such as awareness, knowledge or comprehension are

Subsequent objectives may focus on moving prospects to higher levels in the pyramid to
elicit desired behavioral responses such as associating feelings with the brand, trial, or
regular use etc. it is easier to accomplish ad objectives located at the base of the pyramid
than the ones towards the top. The percentage of prospective customers will decline as
they move up the pyramid towards more action oriented objectives, such as regular brand

If most of the target audience is unaware of the object, the communicator’s task is to
build awareness, perhaps just name recognition, with simple messages repeating the
product name. Consumers must become aware of the brand. This isn’t as straightforward
as it seems. Capturing someone’s attention doesn’t mean they will notice the brand name.
Thus, the brand name needs to be made focal to get consumers to become aware.
Magazines are full of ads that will capture your attention, but you’ll have trouble easily
seeing the brand name.

The target audience might have product awareness but not know much more; hence this
stage involves creating brand knowledge. This is where comprehension of the brand
name and what it stands for become important. What are the brand’s specific appeals, its
benefits? In what way is it different than competitor’s brands? Who is the target market?
These are the types of questions that must be answered if consumers are to achieve the
step of brand knowledge.

If target members know the product, how do they feel about it? If the audience looks
unfavourably towards the product to communicator has to find out why. If the
unfavorable view is based on real problems, a communication campaigns alone cannot do
the job. For product problem it is necessary to first fix the problem and only then can
you communicate its renewed quality.

The target audience might like the product but not prefer it to others. In this case, the
communicator must try to build consumer preference by promoting quality, value,
performance and other features. The communicator can check the campaigns success by
measuring audience preference before and after the campaign.

A target audience might prefer a particular product but not develop a conviction about
buying it. The communicator’s job is to build conviction among the target audience.

Finally, some members of the target audience might have conviction but not quite get
around to making the purchase. They may wait for more information or plan to act later.
The communicator must need these consumers to take the final step, perhaps by offering
the product at a low price, offering a premium, or letting consumers tried out. This is
where consumers make a move to actually search out information or purchase.

Thus advertising is thought to work and follow a certain sequence whereby the prospect
is moved through a series of stages in succession from unawareness to the purchase of the
product. Advertising cannot induce immediate behavioral response, rather a series of
mental effects must occur with the fulfillment at each stage before progress to the next
stage is possible.

Innovation Adopters Model





Rogers propounded the third model, which is known as Innovation –Adoption Model.
This model has relevance to new product introductions and particularly useful for
adoption of non-commercial services or practices in developing countries. The stages of
evaluation and trail before adoption (or purchase) are considered significant in the design
of advertising program. The decision in favor of making an evaluation is likely to be
influenced by information available from various sources including advertising.
Evaluation constitutes a major step towards the adoption of the product or service.


HIGH Car, House Jewelry, Cosmetics
INVOLV- Learn—Feel—Do Feel—Learn—Do
EMENT Test: Recall Test: Attitude change
Diagnostics Emotional arousal
Media: Long copy Media: Large space
Reflective vehicles Image specials
Creative: Specific info Creative: Executional impact


LOW Food, Household items Liquor, Candy
INVOLV- Do—Feel—Learn
EMENT Test: Sales Do—Feel—Learn
Media: Small space ads Test: Sales
Radio, POS Media: Billboards
Creative: Reminder Newspapers, POS
Creative: Attention

"FCB grid,” is suggested by Dave Berger and Richard Vaughn. This model combines
high and low involvement, and left and right brain specialization. It shows a visually
coherent matrix which has four quadrants with two factors—high and low involvement,
and feeling and thinking.

The communication response would certainly be different for high versus low
involvement products and those which required mainly thinking (left brain) and feeling
(right brain) information processing. To define involvement and think / feel, eight scales
are used:

High Involvement:

• Very important decision

• Lot to lose if you choose the wrong brand
• Decision requires lot

Low involvement:

• Unimportant decision.
• Little to lose if you choose the wrong brand.
• Decision requires little thought
Think or rational approach

• Decision is / is not mainly logical or objective

• Decision is / is not based mainly on functional facts

Feel or emotional approach

• Decision is / is not based on a lot of feeling

• Decision does / does not express one’s personality
• Decision is / is not based on looks, tastes, touch, smell, or sound (sensory effects)





Elaboration Likelihood Model

History and Orientation

Petty and Cacioppo (1979) discovered, in contrast to social judgment-involvement

theory, that high levels of involvement do not invariably decrease persuasion.

Core Assumptions and Statements

Core: The ELM is based on the idea that attitudes are important because attitudes guide
decisions and other behaviors. While attitudes can result from a number of things,
persuasion is a primary source. The model features two routes of persuasive influence:
central and peripheral. The ELM accounts for the differences in persuasive impact
produced by arguments that contain ample information and cogent reasons as compared
to messages that rely on simplistic associations of negative and positive attributes to
some object, action or situation. The key variable in this process is involvement, the
extent to which an individual is willing and able to ‘think’ about the position advocated
and its supporting materials. When people are motivated and able to think about the
content of the message, elaboration is high. Elaboration involves cognitive processes
such as evaluation, recall, critical judgment, and inferential judgment. When elaboration
is high, the central persuasive route is likely to occur; conversely, the peripheral route is
the likely result of low elaboration. Persuasion may also occur with low elaboration. The
receiver is not guided by his or her assessment of the message, as in the case of the
central route, but the receiver decides to follow a principle or a decision-rule which is
derived from the persuasion situation.

Conceptual Model

Elaboration Likelihood Model

Scope and Application

Advertisement-research (printed media, television etc.), psychological research. This

theory is promising because it integrates an array of variables into a single explanation of
persuasion. It addresses factors that explain why and when messages and self-motivated
efforts are more or less likely to lead to attitude formation.