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The advertising industry is a global, multibillion-dollar business that serves as a conduit between manufacturers and consumers. The research group Magna Global reported that U.S. advertising agencies earned $166.8 billion in revenue in 2014. There are more than 65,000 advertising businesses employing more than 248,000 workers in the United States.
Whether for nonprofit organizations or Fortune 500 companies, advertising agencies are hired to cultivate brand identities, persuade consumers to switch brands, launch new products, and lobby for political issues. The advertising industry creates and manages the connection between companies, products, and consumers, translating their clients’ messages into effective campaigns. Advertising can stimulate buying, increase sales, and help to jumpstart the economy. The economy, though, can also affect the advertising business. When it slows down, consumers tighten their wallets, and manufacturers, in turn, reduce production and scale back on promotions. Ad spending decreases, as does ad revenue.
Popular media and technology drives this industry. Before the advent of radio, television, and computers, print publishing was the main method of advertising, with ads appearing in newspapers and magazines, flyers, and on billboards. Benjamin Franklin pioneered advertising tactics in his newspaper, the Pennsylvania Gazette, when he placed headlines, advertisements, and illustrations alongside editorial content. Franklin also owned a stationery store in Philadelphia and is believed to have been the first to create the mail-order catalog. Until the mid-1800s, little changed in how print advertisements looked. In newspapers, all print ads were usually a single column without special type or illustrations. Publishers weren’t in favor of advertisements and often separated them from the rest of the content. Magazine publishers, for instance, isolated advertisements to the back pages.
By the mid- to late 1800s, a large percentage of advertisements were about patent medicines, and the messages focused on the public’s health fears. The statements were often dramatic and outrageous (e.g., medicines that could “cure any ailment,” etc.), and did little to convince society that advertising was a serious business. The advertising industry started to take hold during the Industrial Revolution, when manufacturers with diverse products needed to advertise nationally to expand their customer base. Companies hired advertisers to secure create and strategically place ads where consumers would see them. In the early 1900s, stores such as Macy’s, Marshall Field’s, and Wanamaker’s turned to advertising to reach customers. Radio, television, computers, smartphones, and the Internet have since added other tools and techniques for advertisers to reach consumers.
Until the 1980s, clients could find myriad services in a single advertising agency. Once the media industry started to grow, agencies diversified and spun off their specialized in-house departments into separate agencies. Consolidation of agencies continues to change the industry. Independently owned agencies still exist but are far outnumbered by group-owned agencies and holding companies, which are parent corporations that own (or hold) stocks in other companies. Holding companies aren’t involved in the day-to-day advertising tasks but instead work with the companies’ board of directors, helping to set policy and strategy.
Traditional advertising agencies come in three shapes: worldwide networks, with multiple offices around the world; micro-networks, with only a few offices in other countries; and independent, standalone groups, which usually operate in one office and in one country. These networks and groups may be full-service agencies, creative boutiques, or media planning and buying agencies. Advertising agencies themselves have seven major departments: account services, creative, media, account planning and research, business development, production, and traffic (also known as project management in a growing number of agencies).
Jobs in account services include account managers and directors, account executives, and account coordinators, who each have different roles in managing advertising accounts and clients. Art directors, creative directors, and copywriters work in creative services, creating entire ad campaigns for different media. Workers in the account planning and research department study consumers' behavior and analyze data to help create strategically targeted advertising campaigns. Workers in the business development department develop relationships with new clients and are constantly on the hunt for new business. The production department consists of print and broadcast specialists, who have backgrounds in everything from illustration, design, and print production, to photography and broadcast production. Traffic managers, more often known as project managers, make sure the schedule for ads stays on track, liaising between all the departments to verify work is done and communicating with clients about any and all changes along the way.
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