Costing creativity: the creative process versus the way agencies try and monetize it.

March 14, 2016

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How in hell do you scope this?

From a business perspective, “creative process” is an oxymoron. Yet, every agency has one. In the age of projects versus client relationships, the process looks like hours worked. PM’s and AE’s must estimate how many people to put on a creative project and how many hours they will spend doing it.

With clients choosing agencies like restaurants and ordering a la carte off our menus, a neophyte might think it would be easy calculating the bill. Unfortunately, it is harder than ever.

From a creative perspective, the process defies accounting. The time frame for making creative was, is and always will be a guessing game, fraught with variables. How long does it take to come up with an idea – Two hours? Two days? Two weeks? And how long does it take to flesh out the idea? And how many ideas do you require?

When guessing how long a project will take to complete the guessers would ideally need to calibrate how different individuals create, which is unique. For example, Sally likes to work alone. Jack and Jill work best as a team and Bill, Fred and Mary love collaborating. And what about nights, when I like to write? If one calculated how many hours I play with a paragraph of body copy we’d be over budget on everything.

In the good old days, an agency had a relationship with a client (with a yearly nut augmented by media commissions), which allowed for expanding and contracting creative resources, contingent upon the growing or shrinking demands of each assignment. Therefore, creative directors could deal in real time, adjusting resources based on immediate needs, wants and capability variables. In a fire drill, we called in resources with impunity. On a pitch, we might give a bunch of newbies a crack. And so on. Though still a process, it was far more fluid and organic than what we have now. The creative department did not have finite budgetary limits.

As a manager, I’m all for tightening the screws and figuring shit out. As a creative director, I know it seldom works that way.

5 Responses to “Costing creativity: the creative process versus the way agencies try and monetize it.”

  1. Hey Stefan – After many years and much angst, I’ve developed a way that actually seems to work pretty well for all involved (client and agency), and also weeds out the tire-kickers. I run a very small brand communications shop, and we typically do a lot of re-branding and strategy before we get a handle on maintaining the ads/creative ongoing. As you know, time’s a bitch when it comes to creative; some days 8 hours of billable and well-intentioned time in the chair is worth a candy bar, and that sudden flash and explosive idea frenzy at 2 am is pure gold. And as I’m a complete masochist when it comes to pushing perfection, the hours really can add up. Plus there’s the issue of the less committed but still friendly client that shows up periodically and either throws a monkey wrench into the schedule, or who you have to artfully decline. So what do you do? I came up with the idea of assigning a monthly ceiling to each client, and getting them to commit to it. This ceiling might be, say, $5000 (higher and lower both exist for us), and requires a 12 month commitment and 30-day billing cycles. The ‘Ceiling’ represents the MAXIMUM a client can be billed on a regular month (large initiatives outside of the standard scope of regular duties – say a full web build etc, are discussed separately and are outside of the scope of this ceiling agreement). Basically, this gives us the autonomy and creative freedom to work up to that ceiling every month and not be line-item micromanaged, and gives the client a concrete budgetary amount to work with (note: this is for our creative/brand advisory/media planning services only – all media buys are direct to client). We seldom bill the actual ceiling, and the client has us on tap for a specific number, plus we get to decide if and when we’re going to eat hours, just to make things perfect. Works very well, weeds out the ephemeral clients (the ‘could you just throw an ad together’ crowd), and givens as a good projected baseline for income on a monthly basis. Works for us and has allowed us to trim the distracting cleints and focus more fully on the ones that really want to do something – just my 2 (or 3) cents! @LarryMannino

  2. True. It’s hard to predict how long it takes for ideas to happen. But we all make it work – one way or another – every day. One factor that agencies can control – but often don’t – is the clarity and focus of the assignment. I’d rather respond to a fire drill with a clear creative objective than stroll leisurely all over the strategic map. Cost-efficiency starts with strategy.

    • Steffan1 said

      Hi Jeff- The briefing aspect of this issue is a huge topic – hardly addressed here. Maybe in my next post🙂 Thanks for reading and commenting. -SP

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