Connect with us

Best of The Best

Best of the Best: Underwood’s In-House Ad Agency




Craig Underwood shares insights on the benefits of your own ad agency.


HOW MANY OF YOUR ad dollars are going into your agency’s pockets each year? If the number is significant, you may want to create your own in-house agency. 

Whenever you hire an ad agency, a big part of its fee structure is the 15 percent commission that it is paid by your media partners when the ad is placed. The commission is a built-in fee, typically paid by radio, TV?and sometimes magazines. (Newspapers generally don’t.) How much money would you save if that 15 percent stayed in your pockets? 


More than 20 years ago, before I came to work for Underwood’s, my father created the William Gravely Agency. It allowed us to do everything advertising-related ourselves, and earn the 15 percent commission back from the media we were buying from.  


We’ve found that by setting the agency up as a separate C-corporation, we have fewer problems in convincing media to give us the commission. Obviously, they’re not going to give up 15 percent of their income lightly. Besides the money it costs them to give us the discount, they also have to worry about losing the business of other local agencies as a result — each one of which may represent 10 or 20 clients. So they have to be able to justify any decision to give us that 15 percent to their other customers. As a separate corporation, we make it easy for them. 

We do all the creative ourselves, along with media placement. We write the scripts, we handle the photography, recording, mixing — everything. We pay corporate taxes as a separate entity. We even invoice Underwood’s for our time and costs!  


It’s much easier to do radio than TV — and cheaper. First, you need to have an acoustically designed recording area set up. Purchase the proper microphones, recording system, and editing system. One of the most popular pieces of audio editing software is ProTools, which provides editing and sound enhancement. (Depending on the version you purchase, you could spend $250 or $8,000).  

You’ll also spend several hundred dollars on a microphone. And you can purchase royalty-free music that you can put underneath your voiceover. Ultimately, you can set up an entire radio production system of good quality for less than $5,000.  



With TV, you’re going to spend a lot more. To get a high-quality studio-grade camera, you’ll need to spend $10,000 to $15,000. Recording technology is moving more and more into recording directly to a “tapeless deck” (also known as a hard drive), But if you want a nice Beta deck, you will need to spend $5,000-$8,000. For video-editing systems, your main choices are Avid, Adobe Premiere Pro or Final Cut ($2,000-$5,000). We are in the process of converting over to Adobe now. We use other Adobe products, like Photoshop, and they all integrate nicely with Premiere Pro. 
And then you’ll likely need a new computer because of the processing time required for video, which means another $10,000-$15,000 on hardware. All told, we’ve put well over six figures into our system. 


Be prepared to spend time on your advertising, or to hire someone who can. Each month you’ll need to handle billing, check affidavits, and when you’re negotiating your schedule, there’s a lot more time spent on research. And then there’s the creative — writing the ads, shooting product, recording and editing. I would guess maybe a couple of hours a day over the course of the year, on average. 

But to tell you the truth, even if you have an agency handling your advertising, you’re still going to put a lot of time into working with them, communicating your vision, overseeing the negotiations, etc. So the net difference in time invested may not be that significant.  


If you primarily use co-op ads, an in-house agency isn’t for you. If your campaign is primarily print-based, it’s probably not worth the time and effort, because you won’t earn the 15 percent commission. But if your campaign heavily involves television or radio, it’s something I recommend investigating. Take a look at what you’re paying your agency. What is your total yearly expense? You may find that the money you save by doing your media placement and creative yourself is well worth the effort. I certainly know what 20 years of savings have done for our bottom line! 



Article ID: 2117
State Published
Hits 66
Revised 3 Times
Created Sunday, 02 March 2008 12:00
Modified Saturday, 29 August 2009 03:32

Parameters (Article)

Abe ShermanadminAladar Solymosi JrAlfredo MolinaAndrea NirenbergAndrew MorganAndy KoehnAndy MalisAvi SofferBeth BernsteinBeth SchmitzBob JanetBob NelsonBob OlmsteadBobby WilkersonBrian WeaverBruce BrighamCamille BrownCarl ForssenChris BurslemChris SnowdenChristopher MeeCindy ChandlerClaire BaizCliff YankovichCraig UnderwoodDamon PoeterDan GendronDan KischDavid AdelsonDavid AtlasDavid BrownDavid GellerDavid NygaardDavid NygaardDavid RichardsonDavid SquiresDebbie FoxDeborah YonickDenise MeyerDon GreigDonna FrischknechtDonna Pulese MurphyEileen AlexanianEileen McClellandEileen McClellandElie RibacoffEllen FruchtmanEmerson RobbinsEve AlfilléFred MichmershuizenHarriet Howard HeithausHarry J. FriedmanHolly ConnIvan LeviJack MitchellJames Dionjames fiebigJames PorteJeff CrilleyJeff McCandlessJeff UngerJeffery GitomerJeffrey SkaretJim FiebigJim ReedJoel McFaddenJohn BoeJohn FochtJoomlaVoguejoomlavogueJosh WimmerJosh WimmerJoyce JonasJudy TruesdellKate B. PetersonKate PetersonKaty BriggsKirsten DarrowLashawn BauerLaurie OwenLeonard ZellLisa Norling-ChristensenMalcolm AldertonMarc A. SilvermanMargaret AldertonMarlene RicheyMatt LauzonMerel HeggelundMichael FruchtmanmichaelttMichelle RahmmookyNancy TrentNeel MadhvaniPaul HolewaPaula ParisotPhilip NulmanPTTRachel WengrowRalf KircherRalf KircherRamona GautreauxRandy HaysRebecca KischRegina LeademRick SegelRobert DykmanRobin GambhirRon KruseRoy H WilliamsRuth MellergaardSarah YatesScott GinsbergShane DeckerSheldon WarrensiteadminSteve FeldmanSteve GerencserSteven KretserSusan EisenTeerawatTrace Shelton

Parameters (Advanced)

Use GlobalNoYes
Use GlobalNoYes
Use GlobalHideShow
Use GlobalHideShow
Use GlobalNoYes
Use GlobalHideShow
Use GlobalNoYes
Use GlobalHideShow
Use GlobalHideShow
Use GlobalHideShow
Use GlobalHideShow
Use GlobalHideShow
Use GlobalHideShow
Use GlobalHideShow
– Select Language -English (United Kingdom)

Metadata Information

Over the years, INSTORE has won 80 international journalism awards for its publication and website. Contact INSTORE's editors at [email protected].



Wilkerson Testimonials

If It’s Time to Consolidate, It’s Time to Call Wilkerson

When Tom Moses decided to close one of the two Moses Jewelers stores in western Pennsylvania, it was time to call in the experts. After reviewing two candidates, Moses, a co-owner of the 72 year-old business, decided to go with Wilkerson. The sale went better than expected. Concerned about running it during the pandemic, Moses says it might have helped the sale. “People wanted to get out, so there was pent-up demand,” he says. “Folks were not traveling so there was disposable income, and we don’t recall a single client commenting to us, feeling uncomfortable. It was busy in here!” And perhaps most importantly, Wilkerson was easy to deal with, he says, and Susan, their personal Wilkerson consultant, was knowledgeable, organized and “really good.” Now, the company can focus on their remaining location — without the hassle of carrying over merchandise that either wouldn’t fit or hadn’t sold. “The decision to hire Wilkerson was a good one,” says Moses.

Promoted Headlines

Most Popular