How Much To Pay Your Ad Agency?

By Vivienne Quek

I'm sure this is the interesting question you had pondered often. Even your creative agency returned with a fantastic concept, you would still be wondering if you should accept that $3900 or $59,900 quotation.

What, exactly, are you paying for? Many think that they are only paying for that piece of advertisement or poster, the artwork. That would be very far from the truth. Behind that seemingly simple A4 artwork is a complex web of research, analysis, planning, conceptualizing, copywriting, experience, testing, creativity and execution.

"But there's only a few lines plus one photo and my agency took no more than a few hours!" Sure, it may look simple but, simple doesn't equate to easy. Also please understand that many brains, several hands and umpteen years of experience made that quality and speed possible. One mentor told me "A job that takes 20-minutes to accomplish doesn't mean it is only worth 20-minute of time. Behind that 20-minutes lies 20 years of experience."

It is not always easy to tell when slip-shod work is produced. Sometimes, a quick turnaround can produce a nice looking piece of work. A "nice looking" piece might be just that, eye candy. A detailed, professional critique could tear it to pieces. For example, is the headline relevant (catchy, maybe, but relevant?), is the product shown correctly (it might be upside down, I have seen it!), is there a call to action, is the company logo unduly big that it became an eye sore... and so on.

A correct price is when you and your creative agency agrees that it is a fair deal. So what should you pay for and what price is fair?

Ideally, paying by performance will be fair and it is usually a win-win situation for both parties. However, if a fee-based compensation is better suited and you are using your regular agencies, you can consider these factors against the quoted fees:

* Target Accomplishment - Does the agency always meet or surpass the objective, goal and expectation?

* Work Quality - Does the agency always have a refreshing idea even if based on the same old promotional mechanism you used for the past 3 years? Is there a finesse that made your brochures look a tad more "premium" than your fiercest competitor?

* Delivery Punctuality - Does the agency say "Tuesday" and you only get to see your ads on Friday?

* Service Responsiveness - Does the agency respond to all your queries immediately or do they take their time getting back to you? Is there a dedicated support staff or team other than your AE?

* Calibre of staff - Does the agency have experienced marketers to be your think tank? Do they have daredevils that forge ahead through the creative frontiers?

These should form the basis to determine a fair price. Do not look at the artwork only. That is just one piece of a much bigger picture. And please, do yourself a favour by not doing any of these: * Get 3 quotes and award the job to the lowest bidder. (Seriously, do you buy ALL your dresses at the discount bin?)

* Get 3 quotes and ask the best qualified bidder to match the price of the lowest bidder. (Ever hear of "pay peanuts and get monkeys"?)

* Start bargaining AFTER the agency has delivered the final piece of work

All in all, the idea is to be fair. The creative people have spent many years to earn their stripes. Just as you will not expect your top sales managers to draw the same salary as the junior secretaries, why then would you expect to pay your agency less than the best?

Vivienne Quek is a seasoned veteran in the advertising industry. She has worked in small local outfits to large international agencies servicing multi-million dollar accounts. Today, she runs two agencies providing a wide range of marketing and communications services

Vivienne continues to play an active role in her agencies and blogs to share her experiences with everyone at http://www.versacreations.net

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