This post is by Darren Woolley, Founder of TrinityP3. With his background as analytical scientist and creative problem solver, Darren brings unique insights and learnings to the marketing process. He is considered a global thought leader on agency remuneration, search and selection and relationship optimisation.
As agencies largely charge fees related to resource hours, it got me thinking about how much a big idea costs.
You see, when I was a Creative Director I was sitting in a client meeting where the Marketing Director was explaining how their core product was being undercut by more than 50% by a cheaper regional import. Now while the research showed that customers would say they valued this brand over all else, the sales results clearly showed this did not translate to behaviour at the cash register as market share and sales plummeted.
I heard this and offered a solution on the spot. The client loved it and asked us to go away and work up the idea, which was later adopted as a global solution.
Feeling very proud of myself I asked the Account Director how much we charged for the idea and he said $500. Why? Because he explained I came up with the idea in the meeting. If I had shut up and left the meeting we could have come back in 2 weeks time and charged 80 times as much or more.
Soon after I left the agency and set up TrinityP3.
So here it is, how long does it take to create a big idea, because that is currently how much it costs.
Ideas are the core of the advertising process.
Big ideas. Small ideas.
So how long does it take to create an idea?
A blink of an eye? A minute? An hour? Perhaps a week? Or months?
It is an important question, because the industry seems to pay for ideas on the basis of how long it takes.
So if you are paying for ideas you would hope that they happen on the spot.
But if you are selling ideas, then clearly the longer it takes the better for you.
Is it any wonder that marketers often complain that agencies take forever to ‘crack’ the brief and come up with the winning idea?
They are paid to take as long as possible.
Seems to me that a better way is to pay for the value of the idea. Not how long it takes to create.
And there are so many ways to set value. The value the idea creates. The value the idea has to the organisation or the brand. The value of the investment being placed into the idea. This is the basis for the pricing strategy, and isn’t pricing one of the marketing Ps?
So unless you are paying for the value of ideas, and not just the number of hours, I can tell you how long it takes to come up with the big idea — about as much as your budget can afford.
Just another reason you should consider Value Based Remuneration.
What are you paying for your big ideas? Or as an agency, what are you charging? And is it worth it? Let me know because I believe there is a better way to do this.