In July this year, a very useful document appeared. It was a joint industry report on how to judge creative work. Backed by extensive research, it aims to give companies a 'best practice guide' to assessing the ideas of their agencies.
A copy can be downloaded here
It does provide some really interesting insights but I'd liked it to have spent more time studying the analytical and measurement services offered by the likes of Thomson Intermedia. However, on re-reading it today, it did begin to make me think about how agencies charge and whether it represents value for money for either party.
The time honoured tradition has been for the agency to make a time-based fee for the ideas presented. Those braver have tried to institute an 'idea fee' where it's the idea itself that is charged for. Both methods have their positives and negatives. Both have their own difficulties.
Time-based charging is easily quantifiable. As the industry report points out, the right idea can take an instant to appear. Unfortunately, that instant could be in the shower or at 3am in the morning. So, the cost is bigger than idea itself, it has to encompass the experience and understanding of the team; it has to encompass the quality of research and the clarity of the brief; it has to encompass the ingenuity and insight of the creatives.
Then, of course, taking the idea from proposition to execution is an interative process where the idea gets stronger as everyone involved - and that includes the client company - are allowed to provide constructive input. So, accounting for the time the agency spends seems a simple solution.
Two problems. First, many client companies are reticent to pay for the time to provide creative solutions. They are more interested in the execution. Secondly, the agency is paid the same regardless the success of the campaign.
That's where the 'idea fee' comes in. Its proponents say that this fee allows the agency to share in the reward of successful creative ideas - although I'm not sure I've heard of anyone refunding some of the fee for poor campaign results - and this can make clients nervous.
In addition, some fairly poor initial ideas have become very powerful, effective campaigns once they've gone through an iterative development and execution process. So, how much can any agency say that the purity of their original idea was the prime motive force to success?
Perhaps the answer lies somewhere in between, where the agency lowers their initial time-based charging in return for a success fee on the strength of its work's performance. A simple Service Level Agreement with agreed incentives could be put in place.
In the joint report, it states that judging creative ideas is 'both rational and emotional'. Maybe we could add 'empirical' as well so that everyone benefits.
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