An advertising agency or ad agency is a service business dedicated to creating, planning and handling advertising (and sometimes other forms of promotion) for its clients. An ad agency is independent from the client and provides an outside point of view to the effort of selling the client's products or services. An agency can also handle overall marketing and branding strategies and sales promotions for its clients.

Typical ad agency clients include businesses and corporations, non-profit organizations and government agencies. Agencies may be hired to proadvertising campaign.

History

Volney B. Palmer opened the first American advertising agency, in Philadelphia in 1850. This agency placed ads produced by its clients in various newspapers

In 1856 Mathew Brady created the first modern advertisement when he placed an ad in the New York Herald paper offering to produce "photographs, ambrotypes and daguerreotypes.His ads were the first whose typeface and fonts were distinct from the text of the publication and from that of other advertisements. At that time all newspaper ads were set in agate and only agate. His use of larger distinctive fonts caused a sensation.Later that same year Robert Bonner ran the first full-page ad in a newspaper.

In 1864, William James Carlton began selling advertising space in religious magazines. James Walter Thompson joined this firm in 1868. Thompson rapidly became their best salesman, purchasing the company in 1877 and renaming it the James Walter Thompson Company, which today is the oldest American advertising agency. Realizing that he could sell more space if the company provided the service of developing content for advertisers, Thompson hired writers and artists to form the first known Creative Department in an advertising agency. He is credited as the "father of modern magazine advertising" in the US.

Types of advertising agencies

Ad agencies come in all sizes and include everything from one or two-person shops (which rely mostly on freelance talent to perform most functions), small to medium sized agencies, large independents, and multi-national, multi-agency conglomerates such as Omnicom Group, WPP Group, Publicis, Interpublic Group of Companies and Havas.

Most full-Service agencies work on a combination of fee-based and commission based compensation. The fee is paid by the entity for which the marketing is being done. The commission is a payment from the media to the agency and is usually equal to 15% of the cost of the advertisement. The broadcast media, radio and television, traditionally pay a commission.

Full-service, or media-neutral advertising agencies produce work for many types of media, creating integrated marketing communications, or through-the-line (TTL) advertising. The "line", in this case, is the traditional marker between the media that pay a commission to the agency and the media that do not.