Company Background
Young & Rubicam, otherwise known as Y&R, is a full-service advertising agency headquartered in New York City. Y&R prides itself upon big ideas and straying from the ordinary (WPP.com, 2016). Since Y&R is a full-service agency, like many of its competitors, it is responsible for the initial development of ideas for advertisements as well as the other processes along the advertising supply chain. Y&R was the creation of Raymond Rubicam and John Orr Young in 1926 in New York City. Raymond Rubicam allowed for Y&R to prosper, and he became an influential figure in the advertising industry (Young and Rubicam / Y&R Brands, 2016). Currently, Matt Anthony is the CEO of Y&R, and Tony Granger is the Global Chief Creative Officer (Y&R About, 2016). Y&R employs roughly 6,500 employees in over 190 offices around the world. Its headquarters is in New York City (Y&R About, 2016).
Y&R’s Assets
In today’s advertising industry, many agencies strive to have a global presence, large scale, and be vertically integrated. Due to this, conglomeration is extremely popular, and has expanded, with large advertising conglomerates acquiring multiple agencies. This allows for these large companies to provide clients “one-stop shopping,” and increases their diversity in account representation (Elliot, 2002). Y&R is no stranger to this, and owns a plethora of local agencies globally, as well as a few other related entities. Y&R itself is owned by the London-based mass advertising conglomerate, WPP. Although its breadth is tremendous, each area of the supply chain is just as important as the next. Many companies, including Y&R, employ many areas of the supply chain from intellectual property to distribution, and can control the initial development, production, marketing, and distribution of the content (Turturro, 2016). Y&R employs talented individuals who are experts in many types of advertising, which is an appealing selling-point for companies considering hiring Y&R as an advertising agency.
Y&R does not own most of the brands it creates advertising for, but it is affiliated with many well-known ones, such as Nissan, Gap, and Dell. For example, recently, Y&R created a television advertisement for Colgate’s first Super Bowl spot. For this assignment, “the company opted to
Still from Colgate’s Superbowl Ad, created by Y&R
focus less on oral hygiene” and more on the issue of water conservation. “Save Water” was 30-second ad created by Y&R Peru. The initial goal was to “encourage viewers to turn off the faucet while brushing their teeth… the Super Bowl seemed like perfect opportunity to gain mass awareness at a time when there is heightened adrenaline and emotions” (Behind the Work: Colgate’s Pro-Social Super Bowl Spot, 2016). Super Bowl advertisements are known to be extremely original and creative, and are often seen as the annual peak of television advertising. Being in charge of an advertisement meant to air during the superbowl is a tremendous asset. When agencies are assigned these advertisements, the creation of an original idea could encompass every creative individual it employs. They may spitball ideas in a large conference room, in a process called tabling. The copyright for the storyline or idea for the advertisement is owned by the advertising agency, in this case Y&R, until it is officially pitched to the advertiser. Then, the advertiser who has hired the agency owns the copyright (Turturro, 2016).
The Business Model
Carol Turturro, Creative Director of the Joey Company and previous Y&R employee, describes the process for the initial development of an idea for an advertisement. Companies will hire advertising agencies in order to create original and successful advertisements. These companies are known as the advertisers despite the fact that the agency is responsible for the creation of ad content. For small businesses, “executives of the business write the ads themselves and then place them in newspapers and magazines,” but larger companies can afford to hire advertising agencies to help it sell its products to its target audience as successfully as possible (Turow, 2016, p. 92). When an agency is hired by an advertiser, it is commonly called taking an account (Turow, 2016, p. 93). Y&R is responsible for a multitude of different types of advertisements over different mediums, and is often hired by many well known brands.
When an agency is hired by an advertiser, the advertiser will often share its product and its goal for the advertisement. Typically, a creative director or writer and an art director will work together to develop the initial idea. These employees “begin with a strategy, and focus on what is called an end-end goal. For instance, not only will Colgate clean your teeth, but more importantly it will make you feel more confident. The confidence is the
end-end goal, and the ultimate message we want to convey” (Turturro, 2016). A target audience must be pinpointed immediately, and demographic research such as focus groups are often carried out in order to strategize the best way to deliver the message to the target audience. Demographics encapsulate many characteristics of an audience such as “age, income, education and ethnicity. Advertisers also target customers with certain behaviors. For example, fast-food restaurants advertise their late-night hours to appeal to those who work or stay up late” (Suttle, 2016). Once all of the research is in place, a strategy is formed. The creative team must have the strategy approved by the agency before moving forward. Using this strategy as the backbone for all subsequent creative processes, the writer and artist will develop an idea. Agencies often assign an account executive for its client in order to act as the liaison between the agency and the company it represents (Turow, 2016, page 95). The creative team must internally present their idea to the account executive first, and then later to the client. The agency owns the copyright for the idea for the advertisement until the moment it is presented to the client. If the idea is approved, it will then move down the supply chain to production, for which many agencies (including Y&R) employ media teams (Turturro, 2016).
The Revenue Model
How advertising agencies create revenue is fairly simple. The advertiser will pay the agency directly, coming to an agreed price depending on the advertisement, and serviced desired, but mostly based upon the salaries it must support plus a substantial profit. Typically, agencies will charge for time, which can be used for one or more projects. Those who are in charge of the intellectual property are usually not involved in this decision making process, but rather those in charge of financing. Creative personnel at Y&R are
usually assigned to one project at a time, in order to keep creative material fresh for each of their clients (Turturro, 2016). The marketing employees will secure that money will be made, the creative employees will be the catalysts actually making the money.
Advertisers: Unseen Heroes or Masked Villains?
The people who make up the intellectual property part of the supply chain of the advertising industry are often marketers, writers, and artists. Although many see the modern advertising industry as a negative force attempting to get into the minds of the public, those in charge of intellectual property are merely writers who would prefer not to starve. Employees at Y&R encounter multiple obstacles in the advertising business, for their work is not made by themselves for themselves, but instead for others. Writers and artists of advertisements usually do not own their work, and are often forced to keep their portfolios private due to the chance of being sued by a previous client for displaying old advertisements. Additionally, for sensitive or new products that clients want to keep secret, the creative team working to develop the advertisement will use code names in all forms of communication in order to protect their client (Turturro, 2016). Although often invisible, the creative idea-gurus of the advertising industry are just as important as the creative forces in all other media such as film, music, and television.
References
Behind the Work: Colgate’s Pro-Social Super Bowl Spot. (2016, February 07). Retrieved February 09, 2016, from http://yrcovers.com/post/138859853260/behind-the-work-colgates-pro-social-super-bowl
Elliott, S. (2002). Advertising’s Big Four: It’s Their World Now. Retrieved February 09, 2016, from http://www.nytimes.com/2002/03/31/business/advertising-s-big-four-it-s-their-world-now.html?pagewanted=all
Suttle, R. (n.d.). Three Stages of Development of Advertising. Retrieved February 09, 2016, from http://smallbusiness.chron.com/three-stages-development-advertising-25725.html
Turturro, C. (2016, February 7). Former Y&R Advertising Employee Interview [Telephone interview].
Turow, J. (2014). Media today: Mass Communication in a Converging World (5th ed.). New York, NY: Routledge.
Y&R About. (n.d.). Retrieved February 09, 2016, from http://www.yr.com/about#content=1
Y&R – New York Hq. (n.d.). Retrieved February 09, 2016, from http://www.wpp.com/wpp/companies/y-r/office/y-r-new-york/
Young and Rubicam / Y&R Brands : Advertising and marketing profile at Adbrands.net. (2016). Retrieved February 09, 2016, from http://www.adbrands.net/us/yr_us.htm