Introduction advertising unit Structure

8. Finance Department :
The main function of finance department 
is to arrange and control finance. Thus this department is 
responsible for maintaining proper accounts, billing and collection 
of dues from the clients, verifying whether the advertisement in the 
different media actually appeared on the days it was scheduled, if 
so whether correctly, and whether the text was properly printed and 
also looking after all the routine matters relating to accounting, 
recording etc. 
9. Merchandising Department :
In case of large sized advertising 
agency, a separate merchandising department is established under 
the supervision and control of a merchandising manager which is 
specialist in displays, exhibits and preparation of various 
advertising aids. 
10. Public Relation Department :
In case of a large sized 
advertising agency, a separate public relation department is 
established under the supervision and control of a public relation 
officer - manager. The main function of this department is to 
establish and maintain contact and mutual understanding between 
the organisation and the public. It performs a liaison work between 
the clients and the various sections of the public - customers, 
employees and shareholders etc. 

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10.8 
METHODS 
OF 
REMUNERATING 
AN 
ADVERTISING AGENCY
The method of remunerating the advertising agency has been 
a subject of much discussion now-a-days at almost all the meetings 
of advertising agency associations and advertisement clubs. There 
are basically the following three methods of remunerating an 
advertising-agency in practice in our country : 
1. Commission Method :
This is the oldest, and most common 
method of remunerating an advertising agency. Under this method 
the advertising agency has a fixed commission by the media 
owners on the advertising bill for the advertising space bought by 
the respective advertising agency. The fixed rate of commission is 
15% in India as well as in U.S.A. Though the rate of commission 
varies from media to media and from country to country but the rate 
of 15% is almost universal. For example, an advertising agency 
places a full age advertisement in a magazine at an agreed charge 
of Rs. 50,000. The magazine will bill the agency for Rs. 50,000 less 
15% i.e., Rs. 42,500 net. The advertising agency will bill the 
advertiser for Rs. 50,000 (cost of advertisement charged by the 
media). Thus the difference of Rs. 7,500 will be treated as the 
remuneration of the advertising agency. Generally, a cash discount 
@ Rs. 2% is also offered by the media for prompt payment within a 
stated period. This cash discount is usually passed on to the 
advertiser on similar terms by the advertising agency. The general 
criticism of this method is that the advertising agency is always 
tempted to recommend expensive media in order to draw a higher 
remuneration.