INDICADORES DE GENERACION DE VALOR

One of the most important decisions you will make is the selection of an advertising agency to handle your local advertising and sales promotion needs.

In order to make a proper selection you must first determine what the scope of your needs is expected to be and what will be the size of your budget.

Once you have established these, you should review possible alternatives. 1. Free-Lance Services

2. Small, creative agency 3. Large, full-service agency 1. Free-Lance Services

Available services include:

a. Copywriters

b. Artists

c. Media buying services d. Printers

e. Typesetting services

Advantages: You are in total control. Costs are “net.” Buying a la carte gives you a broad range of selection.

Disadvantage: Extremely time consuming. Requires considerable experience on your part. You will receive a minimal amount of “outside insight.”

2. Small, Creative Agency

This type of agency usually attracts top creative talent whose area of expertise is the creation of the ad.

Advantages: Good creative talent. Dealing with agency principals. Outside input on creation of the ad.

Disadvantage: Often when the agency is small there are fees/mark-ups to be paid in addition to “normal” commission. Thinking usually creatively based rather than business-based which may lead to one-side input. Potential lack of services/expertise in areas such as media planning/buying, research, etc. Possible financial instability.

3. Large, Full-Service Agency

This type of agency can handle the full range of your advertising.

Advantages: Full advertising resources. Financial stability. Clout with local media. Disadvantages: May be less “creative.” Your account (unless large within the standards of what the agency already handles) may get insufficient attention.

__________________________________________________________________________________________________________ ____

March 2005 60

As the Pre-Opening period will be particularly a busy time for both the General Manager and the Sales Manager, depending on the availability in your city, a large, full-service agency should probably be given first consideration.

What an Advertising Agency‟s Role should be

1. To work with you to compare and evaluate your hotel vis-à-vis the competition and help determine how your hotel should be presented to the consumer.

2. To come up with a number of strategy options, including the tactical message and unique selling points (USPs), to help you determine the overall advertising strategy for your hotel.

3. To create a number of advertising ideas in rough, concept form that expresses the agreed strategy.

4. To create finished advertising and media recommendations based on your marketing strategy, properly addressed to your selected target markets.

5. To submit a year long marketing and advertising plan covering all aspects of our hotel‟s objectives as they relate to advertising.

This plan should include…

a. overall marketing objectives/strategy (including the tactical message) b. recommended implementation for both creative and media

c. an analysis of competitive strengths/weaknesses d. possible opportunities

e. future projections

The media portion of this plan should include… a. audience objectives

b. reach/frequency objectives c. justification for each medium d. month-by-month schedules/costs e. commitment/cancellation dates 6. To provide day-to-day service for…

a. continual review of plan verses objectives b. continual review of advertising effectiveness c. special projects/seasonal needs

Making the Selection of an Advertising Agency

1. Determine your field of choice. This will be affected by the size/sophistication of you city and the number of agencies available to choose from.

2. Set broad parameters to refine your review process. Look at the available agencies on the basis of their overall size and types of accounts they now handle. Any agency that handles other hotels would probably be eliminated at this stage unless the field of choice was severely limited.

3. Invite the agencies to which you have narrowed your choice to make presentations. These presentations should include:

__________________________________________________________________________________________________________ ____

March 2005 61

a. history of the agency and information on its growth and billing size b. background on the key personnel at the management level

c. background on the personnel they would be assigning to your account d. their track record with other clients

e. samples of their campaigns which the consider “outstanding” f. advertising success stories that would parallel your type of needs g. outside references

h. evidence of financial stability

4. Select a final list of no more than three or four agencies and invite each to make a further presentation on how they would handle your account. This presentation would include a speculative marketing approach and rough/semi-finished creative concepts. Make sure that you fully discuss the content you expect. Some agencies will be unwilling to do a complete presentation unless they receive payment for their efforts. If however, you have seen and respect the work they have done for other clients and feel reasonably sure they will be your final choice, paying for the presentation may prove a good investment.

5. Discuss payment procedures with the agencies you are considering. There are three basic ways that agencies bill their clients.

These are:

a. 15% Commission

The client pays the agency for media cost as quoted by the media rate card. The agency pays the media 85% of the published rate thereby receiving a 15% commission.

Production costs are billed to you at a mark-up of 17.65%. A mark-up of 17.65% on a net amount is equivalent to the 15% of the gross amount. An 85% net charge for production for example marked up 17.65% would equal 100.

b. Fees

Some agencies charge a monthly fee and bill all production and media at their net cost.

If the fee were $10,00 a month or $12,000 a year, this would be equivalent to what an agency charging 15% commission would realize form a client spending $80,000 a year on media and production. Use this type of calculation as a rule of thumb to determine whether or not the fee requested is a reasonable one.

Floor Fee

There are instances where an agency will set a fee “floor.”

This kind of structure guarantees the agency that they will earn a minimum amount regardless of how much on media/production the client ultimately spends.

__________________________________________________________________________________________________________ ____

March 2005 62

If this “floor” was set at $12,000 a year, once the client had spent more than $80,000 the floor would have been met. Any additional spending through the agency would then be billed to the client on a 15% commission basis.

In addition to overall payment procedures there are other “grey” areas that should be discussed.

While the client normally pays for media and advertising production and the agency normally provides at no direct cost to the client basic creative and marketing services and pays for day-to-day ordinary travel to call upon you and their entertaining in conjunction with your account - all of this should be clarified.

Other areas to be discussed include who pays for rough layouts, unusual travel/entertainment and research in your behalf.

Negotiate all of these before you make your selection.

6. Make your final selection on the basis of which agency you feel would best suit your hotel‟s particular needs.

While there are many ways to make this judgement, on approach would be to set up a matrix which would include both relative importance to you of the various characteristics you are looking for in an advertising agency and how well you think each agency you are considering would fulfil these.

THEORETICAL MATRIX EXERCISE

AGENCY CHARACTERISTICS IMPORTANCE TO YOU AGENCY #1 AGENCY #2 CREATIVE/FLAIR 10 4/40 9/90

BUSINESS JUDGEMENT 8 8/86 3/24 DAY-TO-DAY SEVICES 7 9/63 5/35 MEDIA DEPARTMENT 6 8/48 6/36 SIZE OF AGENCY IMPORTANCE

OF MY ACCOUNT 6 3/18 9/54

PERSONAL CHEMISTRY 5 4/20 7/35

TRACK RECORD 7 6/42 7/49

RESEARCH DEPARTMENT 5 8/40 3/15

TOTAL 335 338

Working with an Advertising Agency

The overall objective of hotel advertising is to generate business – To fill up rooms that would otherwise be unoccupied. – To provide additional covers in Food & Beverage outlets.

Advertising produces the best results when it has continuity. This may either be on a year-around basis or as part of a clearly defined seasonal program.

__________________________________________________________________________________________________________ ____

March 2005 63

1. Study your anticipated pattern of business…

a. Determine the nature of your projected occupancy on a month-by-month basis.

b. Take into account seasonal variations and recurrent low occupancy periods such as weekends.

2. Profile your product…the hotel.. Make your agency a full partner

1. Communicate to them all the background on your property, its strengths and weaknesses. 2. Be sure from the outset that they agency is totally aware of what your goals are, what is

expected of them and how you will judge their performance.

3. Provide the agency with samples of both the Corporate and Regional Advertising Programs so that they will have insight into these approached and will be able to prepare material complimentary to these.

Who you will be working with

Once you have selected an agency, you will probably be dealing mostly with your Account Executive. It is good background, however, to have a basic knowledge of all areas within the agency which will also impact on your account.

These include…

1. Management who oversees your account to make sure you is getting service and results. They may be contacted if you are having any problems with the way your account is being handled. 2. Account Executive is your day-to-day contact and is responsible for coordinating the efforts of the agency in your behalf. Functions, in effect, as your liaison at the agency and their representative to you.

3. Creative Director supervises the copywriter and the art director in the creation of the advertising for your hotel. Is responsible for the total quality of the material finally produced. 4. Media Director is the expert on recommending the appropriate media to reach your target

audience with the greatest cost efficiency at the appropriate frequency to sustain the impact of your advertising effort.

5. Research Director supplies quantitative and qualitative research studies to contribute important background to both the creative and media departments.

6. Production works under the supervision of creative people to prepare and produce the finished advertising material and forward it to the media.

7. Accounting pays the media and production expenses and bills you.

5.5. SALES TEAM MANAGEMENT

Liase with Regional Director of Sales and Marketing and/or refer to Pre-Opening Sales & Marketing Kit >> Item XIII for the following:

 Sales Force Management

 End of Month Report

 Business Planning

 Competitor Activity Summary

 Office Management

__________________________________________________________________________________________________________ ____

March 2005 64