Pros and Cons of Establishing an In-House Ad Agency

There have been several ads promoting books and reports on this subject, or included as part of the contents in several mail order books stating:

"SAVE UP TO 17% ON ALL YOUR ADVERTISING"

It's legitimate, practical and effective, but like so many other promises, there are pros and cons involved. The pros are fairly obvious. By setting up your own advertising agency and placing your advertising under your agency name, most magazines will allow you the standard 15% agency commission plus and extra 2% cash discount. If your annual ad budget is $5,000 this amounts to a saving of $850 a year, which is a considerable piece of change.

The negative side to this operation involves the initial cost of establishing your new agency, which isn't very difficult, but it might be considered time-consuming. To initiate an agency you will have to have a name for it other than your regular business name. Example: If your company name is Nationwide Electronics and your name is John Smith, you could call your agency John Smith Advertising or The J.S. Advertising Agency, The agency address will have to be different than your company's, but this can be resolved by renting a post office box for the ad agency and using your home or office address for the other. Next you will have to open a separate checking account under the agency name because all advertising payments will be issued thru your agency, and you will probably be required to register your agency with your County Clerk as a new business.

Once these details have been taken care of, you're ready to begin placing ads. You'll have to have insertion order forms printed with your agency name and address, and a separate form must be prepared for each ad in each publication. When your advertising schedule involves only a few publications, this will not be a problem, but if you expand into 50 to 100 different magazines, it can really cut into your time. Of course, if business gets large enough, you can always hire a secretary to take care of that chore.

Copyright 2004 by DeAnna Spencer

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DeAnna Spencer is a virtual assistant that helps entrepreneurs run a successful business by providing affordable administrative help. She also publishes a blog for small business owners. Visit this learnsmallbusiness.wordpress.com small business resource today.