What is an Advertising Agency?

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  • Written By: M.C. Huguelet
  • Edited By: Heather Bailey
  • Images By: Pavel Losevsky, Forewer, David, Matka_Wariatka, Frank Boston, Photocreo Bednarek, Monkey Business, Alejandro Catalan
  • Last Modified Date: 03 October 2019
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An advertising agency is a company that carries out all or some aspects of advertising production for firms by which it has been hired. Some agencies handle all phases of advertising campaigns, from performing market research and establishing product branding strategies to producing ads and placing them in appropriate outlets. Other agencies specialize in one or more of these functions.

Full-service advertising agencies typically have the resources to fulfill all aspects of a client’s advertising needs. This type of agency is generally made up of several departments which work cooperatively to carry each ad campaign from inception to execution. Generally, these departments include account management, research, creative services, and media services.

The account management department provides a link between the advertising agency and its clients. It works directly with clients to establish a clear understanding of their products and their advertising goals. This information is in turn conveyed to the other departments, allowing them to create campaigns that satisfy the client and profit the agency.

Another important component of an advertising agency is the research department. This department analyzes market trends and sales data and sometimes conducts focus groups to gauge consumer perception of the client’s product and its competitors. Such information is helpful in deciding how a product should be marketed and determining a campaign’s target audience.


Once the advertising agency clarifies the client’s needs and determines how a product can best be marketed, its creative department devises appropriate advertisements. These advertisements can take a number of forms, including illustrated or photographed still images and animated or filmed commercials. Many ad campaigns use a combination of these and other formats. Thus a typical creative department consists of an artistic and versatile staff capable of generating advertisements in a wide range of media.

After an advertisement has been produced, it must be placed in a suitable outlet. An agency’s media services department is responsible for purchasing the space from which an ad can be seen. They might secure spots in magazines or newspapers, on radio, television, or the Internet, or on highly visible outdoor objects like benches and billboards. Media services staff seek to place ads in those locations most likely to reach the target consumer while remaining within the client’s budget.

Many advertising agencies do not offer a full range of services, but instead specialize in certain aspects of the ad production process. Some, for instance, may offer only creative services, while others might focus solely on media buying. These specialty agencies can be useful for those firms that choose to partially produce their own advertising campaigns, as the firm must then only pay for the services which it is not capable of carrying out in-house.


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If you have a small business that you want to promote, you may want to considering hiring an advertising agency. With today's modern technology, a creative advertising agency will be able to get the word out about your business through a variety of media and online promoting tools. You will most likely be pleased with the increase in customers that you get as a result.

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