Our answer is yes. Over the course of the past 50 years, the advertising industry has transformed to encompass all new media that fall under the advertising umbrella. If you recently haven’t reviewed your marketing strategies and costs when working with an agency, you should. You might be losing a fortune.
I read an article today by a former head of creative at a major ad agency that read how he had witnessed a large amount of frustration by Chief Marketing Officers (CMOs) caused by how their agencies charge for creative and account services. The author says he had an epiphany and that maybe charging by the FTE (full time employee) should be a thing of the past. He states, “the fact that agencies charge more money when they put more people (or say they do) onto a project,” is wrong. No kidding.
I have always felt that the standard advertising agency model he wrote about is broken. In this model, ultimately agencies are compensated greater when deadlines are not met or only sub-par work is delivered. I’ll explain.
Let’s say that your agency presents you concepts for a new campaign. Its employees have been working on storyboards, scripts and ads for weeks while billing you for the time. You take a look and see nothing you like and say to the agency, “I need to see more concepts.”
If the agency uses this standard model, ultimately, it just hit the lottery. Now it can go back and create additional campaigns and of course bill you more money. If the agency presented you great campaigns in the first presentation they lose potential income. The agency is being rewarded for delivering inferior work.
I’ve always wondered why CMOs put up with type of agency model.
Now you’re probably saying, “This isn’t the relationship I have with my agency. I would never agree to this type of arrangement.”
The truth is you might have a similar type of relationship but don’t realize you do. Are your invoices always much higher than the initial quote? Are hidden fees popping up each month? If you answered yes, let me tell you how Davis Advertising can help.
At Davis we can operate using a fixed pricing model to help businesses of any size. This model has our clients pay a locked-in price or a pre-determined monthly fee (not retainer) that covers all required services for the completion of a project or campaign. This fixed pricing model would penalize us for creating campaigns that were not accepted by our clients at the first presentation. At Davis Advertising, if our first presentation is not great we will not be compensated for future concepts. Clients are invoiced only once we get it right. Not only does this method make us work more efficiently, this method is fairer to our clients and saves them time. So when you ask your agency if it can fix your problems and save you money be sure to also ask which model is used.
