Constant Contact offers over 400 email templates and a tracking and reporting feature that allows you to see what percentage of your audience opened your email and which link generated the most click through rates. They have excellent customer support and offer a free 60-day trial for up to 100 contacts. After 60 days you will pay a monthly fee that starts at $15 and increases incrementally depending on the number of email addresses you send to.

MailChimp does not offer as many templates to choose from, but they offer free emails for lists with 2,000 names or less. They also have an easy to use system for adding and managing contacts and have a strong reporting feature. MailChimp offers point-and-click WYSIWYG editing. A WYSIWYG (What You See Is What You Get) editor enables you to easily edit your email campaign while seeing what it will look like to your readers.

Once you have done your research and picked out your email marketing partner, set goals on what you want to achieve and track them. Below are some general tips to consider:

1. Pick or design a template that complements your brand and your website.

2. Determine what you want to include in your weekly, monthly or quarterly email marketing. Do you have a featured spotlight, a product or safety tip? Interview an employee or an expert. Tell readers something they don’t already know and sprinkle in some fun or a quote. Treat the readers like they are a part of your group to help build brand affinity.

3. Ask your customers what their email reading habits are. Do they prefer to open emails on their computer, receive a text or open them on a mobile device or smartphone?

4. So that your email can be viewed on a smartphone or computer, remember that a practical, clean design is best. Always set the alignment to the left – this ensures that the copy doesn’t get pushed to the center or right if someone is reviewing the email newsletter on a smartphone. A good design includes whitespace, short paragraphs, few pictures and clearly labeled sections.

5. A/B test your emails so you can determine what days of the week and times have a higher open rate for your business.

6. When programming the content, include a teaser paragraph with a link to your website so your readers have to click on the link to get the full story. This helps drive traffic to your website and with rankings.

7. Incorporate Google Analytics so you can view statistics on visits, conversions and sales. Combine email and social marketing by sharing your campaign with Facebook, Digg or Twitter.

8. Always test your email campaign before it is sent to the masses. Test it internally, externally and for viewing it in different browsers and on smartphones.

9. After you launch your email, pay attention to what topics have higher click through rates for future campaigns. Remember to measure your success and compare results from email campaigns. Use your reports
to learn about your reader’s interests and sign up for your competitor’s e-newsletters to see what they are doing. Make sure you are building and regularly updating your email list and database.

10. If you are having trouble coming up with rich content, consider reducing the length and frequency of your email newsletters. People typically value the space in their inbox so make sure you are providing relevant and engaging information.

Still need help on getting started or improving your email marketing? Contact evok advertising at 407-302-4416.


The offer must appeal to target audience. Some companies find that reaching a specific target audience, such as children, creates a challenge. Motivating kids to fundraise for their schools can be a cumbersome task for a hard-to-please audience. Would one offer them rebates that take six to eight weeks to receive? Or would one offer them a class pizza party? You can determine which one will achieve results based on the context of the promotion, the willingness of the children to participate and their perceived value.

High perceived value. A consumer’s perception is their reality. The product offered has to have value in the consumer’s mind, and be an offer they usually would not go out of their way to buy. When offering a product it’s not necessary to give away a Ferrari of the year, instead give away a car that has the same perceived value as a Ferrari, but in reality only costs $20,000. Scale your giveaways to your budget but keep consumers’ perception of products mind. Presentation of that product helps as well.

Immediate satisfaction. We are a microwave society. Today, people expect to be satisfied immediately. If your offer has a delayed satisfaction for your consumer, it may not be successful. Mail-in rebates that companies offer are a prime example, and can lead to lower consumer participation. Think about when you’re surfing the web, and how long do you wait for a websites to download…15-20 seconds? You take the risk of losing a consumer the moment they have to wait.

Keep the process simple. If consumers see a complex web of tasks and processes needed to participate in promotion, they may walk away. People, for the most part, expect companies who offer incentives to make them as easy as possible to obtain. If the amount of work it takes to get an offer overshadows the perceived value, then the probability of getting consumers to act diminishes and vice versa.

Be honest. Do not be ambiguous when it comes to the messaging. Be upfront – tell them what they are going to get and how they are going to get it. The fine print, also known as disclaimers, may scare people away. When the list is never ending, consumers may not act on the offer. In the end, honesty and being upfront is appreciated.

Be legal. Make sure that you follow all state guidelines when launching a promotion or sweepstakes. The rules can vary by state but as a rule of thumb, remember; you cannot make a consumer buy your product or service to be eligible to enter to win a prize – that’s a lottery and illegal in most states. You have to provide the consumer a free way to enter the promotion with the same opportunity of chance. This does not apply to a gift with purchase, where everyone is awarded a prize. See the state of Florida’s guidelines here: http://www.800helpfla.com/sweepstakes.html

Remember, it’s not about what you sell; it’s how you sell it.

With social media on the rise, and being significantly cheaper than other mediums, many companies are going for it. Great if you are opening the hottest new club in town, but what about if you’re trying to sell hearing aids? Twitter may not be your best bet! So, when deciding what channel to use, the first step is to identify your target market and the best way to reach them.

Let’s stick with the hearing aid example. Although an increasing number of seniors own computers and are savvy about navigating them, studies show there are better ways to reach them in a more targeted fashion, like by direct mail.

While Internet spending has increased dramatically over the last several years and newspaper advertising has decreased dramatically, direct mail spending has remained virtually flat. Flat doesn’t sound good, does it? But really, this means that it’s a tried and true marketing medium that has stayed consistent throughout the years.

Direct marketing, as defined by Wikipedia, is a form of advertising that reaches its audience without using traditional, formal channels of advertising, such as TV, newspapers or radio. The goal of direct marketing is to allow businesses to communicate directly to the consumer through the use of advertising techniques such as flier and catalogue distribution, mailing of promotional letters, and street advertising.

There are several advantages to direct marketing. Here are a few:

1. It enables you to send your message directly to the consumer, without interference.  For instance, when it comes to TV spots, how many people now Tivo and DVR their favorite TV shows, and skip right through the commercials, blasphemous to an advertiser, but it happens nonetheless!

2. It also allows you to personalize your message to each consumer. “Dear Mr. Jones, we would like to offer you a special discount…”

3. Direct mail also can include a call to action, which allows for tracking. For example, if you ask consumers to “bring this coupon into the store to receive your discount,” you can actually tally up the amount of coupons the store receives to see the success of your campaign. Other calls to action include, “call this number” or “logon to this website.”

4. Although there are many forms of direct marketing – telemarketing, e-mail marketing, door-to-door leaflet marketing, broadcast marketing – direct mail remains the most popular.

5. In a study conducted by The Direct Marketing Association, it was found that 57% of the campaigns studied employed integrated strategies.  Of those, almost half (47%) launched their campaigns with a direct mail piece.

6. Additionally, although we were using the hearing aid company as an analogy marketing to seniors, direct mail can also be used successfully to market to all age and ethnic groups.

Direct Mail and Coupons

For the first time since the Depression, the Gen Y group and their followers, the Gen Z group, are saving more money than any of their predecessors. Although not a definite, this could be attributed to the rise of coupon usage. Where it used to be taboo to use a coupon (think standing in line behind the blue-haired lady in the grocery store, with her handful of coupons), it is now the norm and almost expected. Don’t want to spend the money for your morning latte? Probably will if you have a 50% off coupon. And what better way to receive a coupon that by having it mailed directly to your house?

So when determining how best to spend your precious marketing dollars, first and foremost consider your market and how to reach them, then make sure your messaging is clear and if using direct marketing – consider making your consumers an offer. And don’t discount direct marketing – it’s how many consumers get discounts and they love that, so you should too.

As an advertising agency, it is vital that we communicate the importance of understanding how messages can be integrated within these new—virtual and actual—areas. However one must carefully consider the product and service type, along with the target’s demographics and lifestyle habits to ensure the “right fit” media strategy and placement. Almost every group is becoming a more mobile consumer, so it is essential to consider where, when and how fast they expect and/or would be most receptive to receiving marketing messages.

The keys to help in media planning are still fairly traditional:

• Define the target demographic
• Know the product or service
• Know the client (target)

Define the Target Demographic:

The better one can define their target audience, the more effective a media buy can be.  It is becoming necessary to look closer—explore psychographic information of the potential consumer as well as the more general demographics such as age, gender and geographic area.  You need to know what they like to do; if they are soccer moms or people who have pets or if they are retired, and customize both the message and the media to reach them.

Know the Product or Service Point of Different:

It is probably obvious that certain products and services are a better fit for some of the new and emerging media options available, while others have a higher success rate on their tried and true traditional formats.  For example, if you are trying to reach a younger demo, a mobile text messaging campaign may work extremely well; but to reach an older, more conservative demo, banner ads targeted by geography and content might be a better fit.

Know the client (target):

Keep in mind, for every rule, there is an exception. Just as with the target market, their will be advertisers willing to try something new and are open to putting their messages in new places; while others will be more cautious when considering venturing into new mediums and strategies before they see that it has worked for others. In advertising, it is as important to do the research, as it is to be the first. Some might say it’s a gamble, other’s argue “calculated risk” is a winning equation that should be incorporated into every media strategy and plan. As advertisers, both sound research and trail blazing get our vote. Further, it’s important to inquire regarding your feeling, as well as the beliefs of any agency partners you currently use or would consider. Media is as important as the message. A great message delivered to the wrong person at the wrong time in the wrong place is just, well…wrong.

It is essential for any agency offering media planning, buying and placing to be knowledgeable about all mediums, not just the ones their current clients use. Further, they should inform and educate the client and all team members (account services and creative) of what’s going on in the ever-changing media landscape. As an advertising agency with clients that run the gamut, we have the good fortune to keep up with all the new and emerging media. We have a living library of emerging media stories that assist all clients with options and ideas of how to get their message out. We’ve found that all our clients, even the more traditional ones, truly appreciate the latest and greatest media trends, even if they don’t end up on their strategy-driven plan.

But, I digress. This post is not about the names, the latest functionality or insight into what’s coming down the pike. Instead, let’s talk about the price of a website. As we’ve discussed in previous posts, advertising agency’s sell “time” and “ideas” as a commodity. That’s the widget exchanged for compensation. There’s a lot of talk about the traditional agency model, but this is about what is happening today, in 2009. I do not claim that this post will be relevant forever, or even in a year.

Determining a fair price for the development of a website can often become a source of contention. This is because there can be be a wide range of perceived value and an unclear understanding of the effort it takes to build a great website. Even with the advent of ‘off the shelf’ CMS templates (yes, we love you Joomla), success still rests in the hands of good content, good design, good planning and ultimately, good collaboration.

I’ve noticed a trend of significantly shrinking website budgets with a major increase of functionality requirements. Yes, of course, as time goes on price efficiencies should be expected. That said, wanting to pay $5,000 for a robust website that includes all the bells and whistles such as forums, blogs, multimedia newsrooms, SEO, polls, flash, forms that integrate with a company’s internal sales software, e-commerce and a complete CMS for back end management poses a challenge for anyone wanting to be paid for their time.  That’s on top of the text, photography and programming that serve as a bare minimum.

Here’s the issue: At a rate of $85 an hour (which is pretty darn low for anyone who isn’t your cousin) means that you have a grand total of 59 hours to accomplish everything. That’s 7.5 full working days. Yep, about a week and a half worth of work for one person. Considering that a typical agency would, at the very least, have a project manager, copywriter, designer and programmer assigned to it, you’re looking at each person getting just 14.75 hours to do their part. That’s less than 2 days. Uh oh.

Don’t get me wrong, there are plenty of websites that can be developed in 59 hours. Beautiful brochure sites with limited rich media content and visitor interaction modules can be done rather quickly. It’s just a matter of the end deliverable and having a clear understanding of what it takes to get there.

There is no shortage of paper options and printing techniques when it comes to sending direct mail; and, breaking through the clutter is no easy task when the average American receives 848 pieces of ad mail each year. This post examines the use of seeded paper as one option.

You don’t have to work in the printing industry to know that printing on anything other than good ole white paper could pose a challenge. You have to account for the creative intent of the piece versus the production capabilities of your vendor, which can sometimes be far from a perfect match.

Often times, the Art Director will be the one to suggest a type of paper in conjunction with a unique concept. So, the first step is researching if this type of paper even exists. If so, then you have to find a printer who can work with it. You can contact a local dependable commercial printer to review the project details.

With specialty projects, the fear of the untested can be a costly journey. Fair warning – if the vendor has not printed on this type of paper before, do not assume that it will be a no-brainer. Why? Here’s the type of challenges you could encounter with seeded paper:

* It soaks up the ink up like a sponge, jamming the press. This means the vendor won’t be able to successfully run the job.
* Seeded paper requires printing on an INK JET press – any ole press won’t do.
* There is a limited imprint area on the paper, so you have to ensure the file accounts for a large safety zone.

So what can you do to ensure success?

* Have your vendor test on their presses with the exact paper long before you commit to using them for the project.
* Make sure the vendor has an in-depth conversation with the paper supplier to determine best practices for production. In fact, insist that you are on this call if you have any doubts.
* Another option is going to the paper supplier first and asking who they used to create the sample. You might be able to avoid untested waters by using the supplier’s preferred vendor. The downside is the shipping expense if they are located out of state.

The bottom line: continue to push the envelope of production techniques. After all, the same ole process will get you the same ole results. But, be sure you do your homework beforehand.

Nearly 30% of hospital visits by this age group were maternity-related. Of social media types, forums and discussion boards had a “significant” influence on 20% of 25 to 34 year olds who recently made a visit for maternity reasons, suggesting hospitals should target this group with an online space where these parents-to-be can interact.

At the other end of the spectrum, respondents 55 and older had the highest percentage of recent hospital or urgent care center visits and reported significant influence from direct mail and newspaper advertising. The most important factors for this age group were quality of care, availability of specialized services, and out-of-pocket costs.

“Progressive hospitals are already participating in social media through specific micro-sites, social networking, online communities, and targeted online marketing,” said C. Lee Smith, president and CEO of Ad-ology Research. “Urgent care and maternity provide excellent opportunities to connect with younger consumers, and social media is the way to engage this group,” Smith said.

Other key findings from the survey:

• Women accounted for approximately 60% of those who researched family doctors online
• Quality of care ranks the highest among patients as the most important factor when choosing a hospital or urgent care center
• Hospital/urgent care Web sites had the most influence on 18-to-24-year old patients (53.8%)
• Of traditional media, television had the most influence (22.3%), followed by newspapers (21.9%)

So, if you are involved with developing the strategy and tactics in healthcare marketing, where do you start? It’s easy to learn the lattest buzz words, but using them…and using them to garner ROI…can be a whole different ball game. Oftentimes, the newness means it’s not taken seriously among the organization’s traditionalists or worse, people steer clear of them all together because there’s no media rep to do the leg work for you. Instead, many of these outlets mean you’ll have to roll up your sleeves. But, once you get familiar with it, you’ll wonder what you ever did beforehand!

Got something to say? Did a world-renown physician join the hospital? Did you introduce a new MIS technique? Is there a new spa in support of helping cancer patients cope with their illness? Let people know in an instant with social media.

Let’s take a look at just one social networking vehicle: Facebook. Aside from the obvious creation of a profile, there are so many great ways to spread a message. It allows you to reach your exact audience and connect real customers to your organization.

Rewind

It began with a traditional holiday card, singing the same ol’ sentiments, wishing their audience well for the holiday season and the new year. No sales pitch. No call to action, website or phone numbers.

It was expected. Probably hung in the doorway with all the others.

While fruit baskets, cookies, chocolate and other goodies took center stage. In all their holiday glory. Disappearing faster than your decision to re-gift that sleeveless holiday sweater, while the awareness lasted long enough to realize you wouldn’t get a second shot at that Harry & David gift basket.

Well, we couldn’t compete with such lavish gifts of well-wishery. We had a budget for a card. And direction from the client: “We’re doing a card.”

My problem is that we were just going along with what everyone else was doing. Getting lost in the surplus of snowmen, stars, holly and glitter. Taped to a doorway until our client’s sentiment was sent the way of file 13.

Start

What I appreciated about the holiday card was that it wasn’t (directly) going after the sale. What if we just did it for another holiday? That alone would cut through the clutter. After all, who gets a card for Groundhog Day?

Basically our pitch to the client was pretty much as outlined above. Let’s pick another secular/unofficial holiday and execute on it. No hard sell. No call-to-action. But maybe a website [landing page].

So our little card for Groundhog Day was well received. A few “thank you” emails led to a series of cards produced that year, which translated to a bump in RFP submissions to the client. Nice. They noticed.

Now the client direction was “how can we take this to the next level.”

Yup. Music to my ears.

Push Play

Proposing another set of holidays, we prepared the client to take this initiative online. Now we could really implement a tracking mechanism, and offer more interaction with the brand. A veritable mix-tape of traditional printed cards driving traffic to a landing page, some e-cards to fill in and a dimensional mailing or two.

Here are some examples:

Labor Day
This execution was created within a series of traditional “pop-up” printed cards. User opens the card and the interior comes to life, much like a children’s book. Dad is golfing in the backyard, Junior is jumping in the pool, Mom is getting burgers ready for the grill. A quick message from our client wishing them a relaxing long weekend and driving them to a landing page. The landing page mirrors the card, but plays on interaction. Click on Dad and get a mini-golf game, click on Junior for a swan dive or cannonball into the pool. All branded, and without any sales messaging. (We did provide a link to the client website)

Halloween
A dimensional piece was mailed about three weeks prior to the “holiday.” It consisted of an inflatable pumpkin and a sticker sheet with Jack O’Lantern eyes, noses and mouths. On the back of the pumpkin was our client’s logo and website link. Essentially, the audience had a few minutes of fun creating the custom pumpkin, then decorated their office with it (pumpkin facing “out” to show off their work) and ultimately stared at our client’s logo and website for about two weeks. (We even donated the overruns of stickers with some paper plates to a local school to do a fun Halloween craft)

Fourth of July
This execution was solely electronic, and featured an “asteroids”-style game where Uncle Sam shot down floating hot dogs. It kept high scores, and encouraged some friendly competition when emailed to a friend—and further developing our client’s email database.

Record

The response was overwhelming by any effort. In reviewing analytics, some of the online “cards” resulted in engaging viewers with the brand for over 15 minutes. We heard some of the dimensional pieces had a shelf life of over two weeks—staying put on desks and shelves as conversation starters with associates of the addressee.The tracking mechanisms for each “mailing” were somewhat elementary (defined by budget and agency recommendation). We did see measurable results, to the tune of:

• Increased inquiries about service offerings
• More RFP submissions
• Growth of indirect contacts within the vertical channel

Even a bump in correspondence with their audience, even if it’s only a “what am I getting for Arbor Day?”-type questions. I am comfortable saying we raised some awareness.

So we turned the ubiquitous holiday card into a program that returns more and more each time our client invests in it.

Here are some things to consider if you’d like to try something similar:

• Skip the usual. Don’t do a postcard because that’s what you’d normally do
• Timing is everything. Pick an unusual time of the year, a holiday, birthday, astrological division
• What’s in it for them? Notice this doesn’t say “what’s in it for you?”—play down your product/service and turn up the volume on just saying “hi” or giving your audience something that is unrelated to your product/service
• Theme. a common thread tying your efforts together help to build awareness from your audience. And this doesn’t mean because you put your widget on a “baseball card” that someone will want to collect them all. Perhaps each execution is pink, or square, electronic or dimensional…
• Commit to the whole program. You may need to gain some momentum before you see results, so create a plan and stick to it. The first isn’t any good without the second and third.

Here’s some holidays we haven’t been able to work into our program, but sound like there’s a lot to work with:

• No Pants Day – First Friday of May
• International Talk Like a Pirate Day – September 19
• National Ammo Day – November 19
• Monkey Day – December 14

I love to hear your efforts, especially if it’s on one of the above!

Part 1 of this series examined non-commission forms of compensation, generally the foundation of the agreement. Part 2 of the series will explore media commission and the final installment will cover production markup.

Today’s Media Landscape

The landscape of media buying is changing. Most print and broadcast companies still utilize agency discounts, but we don’t know what the future will hold. This is especially true of online initiatives, which are fast becoming a major component of integrated plans. Is it possible for you to place your media direct in some instances? The answer is yes.

So why pay an advertising agency a media commission? Well, there are several reasons. Compensation should be relative to the agency’s expert planning and research abilities, negotiation skills for maximizing your budget and their buying power. Buying power often leads to free bonus media and significant added value.

Sure, you can buy your own oil and change your own tires, but there is something very reassuring about having the mechanic do it for you. You know that you are getting the right tires, the right oil and a quality assurance benefit (not to mention a warranty). And, chances are, you’ll also get a free tire rotation and air fill up.

Media Services Responsibilities

• Create innovative and cost-effective plans designed to fulfill media objectives through the development of strategies and tactics
• Determine the right media mix
• Determine which specific media outlets offer access to the target market
• Outline when advertisements should run, and how often Compensation

The success of a good agency/client financial relationship is based on setting clear expectations and billing transparency. In the case of media, planning, placement and negotiation is typically covered through space reservation. Standard agency commission is 15%. Client invoices reflect a ‘gross rate’ that accounts for a 15% mark up. Then, media vendors bill the agency at a ‘net rate’, with the difference compensating for the media planning services.

There are a myriad of ways in which advertising agencies can be compensated. For full-service shops, it typically consists of some form of hourly billing, media commission and/or production commission. While there are standard industry norms, it is common practice to engage in negotiations specifically tailored to the unique needs of each client. Finding an agreement that is fair and mutually beneficial is the foundation to building a successful long-term partnership.

Part 1 of this series is going to solely focus on non-commission forms of compensation. This is generally the foundation of the agreement. Media and production commission will be explored in parts 2 and 3, respectively.

What are “hours”? Ad agencies sell ideas – along with the expertise and strategy to execute them. The tangible product is a written communications plan, creative concepts, and finally, the advertising assets that go to market.  As it is impossible to inscribe a sku number on an idea, it gets translated into the amount of “time” it took to develop it.

It’s often a vague concept to dissect, but billable hours are the core of most shops in one facet or another. To be operational in any capacity, the agency has to cover salaries, internal resources and all overhead expenses. Thus, the agency exists by compensation for invested time. However, this “time” should not simply be thought of as the clockwise journey of the minute-hand – as it encompasses the knowledge, experience, education and collective wisdom of specialized “idea makers” and “problem solvers”.

How are hourly rates established? Agencies take into consideration the total cost of running the agency and divide that by the number of billable hours available from all non-administrative employees. Comparable to any other business, revenue, minus cost of goods/service sold (adjusted gross income) must exceed total expenses for the business to be profitable.  Overhead / total billable hours = hourly rate.

Typically, hours are compensated in one of two ways: monthly retainers or per-project estimates. There are pros and cons to both structures. Here is an overview to help determine which option is better suited for your needs.

MONTHLY RETAINER

A monthly retainer is an agreement to purchase a preset amount of hours every month. You do not have to determine what the specific details of each project will be in advance, although the initial hours were predicated on a basic assessment of overall needs. In other words, retainers are calculated based on a scope of work coupled with estimates of man-hours and staffing needs for that scope of work (based on past experience). From this, a monthly fee is arrived at and proposed.

Each month you get one (1) invoice for the exact same amount. That invoice covers a specific block of agency hours at a blended rate across all departments (copywriting, graphic design, account management, etc.). Under the right conditions, a retainer can be advantageous. For example, a retainer can work well if you require long-term strategic planning and an ongoing partnership that works in a proactive capacity.

Pros

• Consistent billing for both parties.
• Allows for ongoing proactive solutions.
• Clients can more accurately forecast an annual marketing budget.
• Retainer clients are often the priority in the agency.
• The hourly rate for a retainer structure is typically lower than its per-project counterpart.
• Projects can start immediately after being requested, there is no additional paperwork required (pending it is within the scope of the retainer).

Cons

• Retainers can lead to liberally requested assignments that often eat up hours.
• Often time, the amount of hours needed to complete the full scope of work in a given month is underestimated. This means that the client must be able to prioritize projects and work within the allotted hours.
•  Neither party wants to hear “over hours”, but an agency can lose major resources if it consistently gives away hours. Time can’t be resold or recouped. Everyone must agree on the hour allotment and work within that parameter.
• With a retainer structure, there is no set amount of changes to any particular project. Unfocused rounds of revisions are often the culprit of hours usage. On estimated projects, a change order estimate is generated after three rounds of revisions. This can lead to a more tightly focused approach.

PER-PROJECT ESTIMATES

A per-project estimate is an agreement to a predetermined amount of hours to complete one specific project. This works best when you know exactly what you both need and want. “Need” is relative to your target audience. If you don’t know what you need in order to stimulate action among them, then it is important to take a step back and focus on a strategic plan first. “Want” is relative to knowing what the end product must achieve to gain approval in your organization. If you don’t know, the agency certainly doesn’t know.

Estimates are based on past experience. It’s a culmination of collective wisdom from the agency for the development of a similar type project. Typically, ad agencies will develop two to three design options for client review. One option will be further revised for final execution. The estimate assumes there will be a set number of client revisions to the chosen concept. Additional revisions that cause an overage of quoted hours typically results in a change order estimate prior to commencement of new work. The client should notified of approaching hours at 70% completion.

 Pros

• Working on a per-project estimate has a higher perceived workload visibility and transparency.
• There is no ongoing payment for the client.
• If you need reactionary solutions, this is a better option.
• The review process is often more tightly focused, as the estimate allots for a finite number of revisions.

 Cons

• No work can commence until a formal estimate is approved. Estimates generally take 48-72 hours to create. This means projects cannot start immediately upon request.
• This structure does not allow for ongoing proactive solutions, it simply covers the exact task requested.
•  It is hard for an agency to staff based on project work because there is no clear determination when projects will come in or how large they will be.
• The hourly rate is often higher than what retainer accounts receive.

The success of a good agency/client financial relationship is based on having a clear understanding of the project up front. Expectations of both parties must be defined prior to the commencement of any work. 99% of billing issues are a result of poor planning or miscommunication.

It is important to truly evaluate both compensation models to best determine what will meet your needs. It’s also important to understand that there is no perfect science to estimating hours. Just ask yourself, how much will a new kitchen cost? Every single project is unique and there is no way to predetermine the exact amount of time needed to create the exact design a client will love. Because design is subjective, the agency could hit a home run with the first concept or it could go to ten rounds of revisions because of a multi-person approval process. It’s truly in the client’s hands.

 FAQ’s

Q: My retainer covers 200 hours per month. My agency is telling me I used up 150 in the first week. How is that possible?

This is the most common reason for client dissolution with the retainer structure. First, it’s very important to prioritize project needs. You can’t expect to have a fully-dedicated agency team for the entire month without considering it is 8 hours per day for each staff member working on your projects. Often times, client’s think of 40 possible hours in a workweek. However, if multiple people (Account executive, Art Director, Copywriter) are all working on your projects at the same time, you have to consider the total hours of everyone. If you have a retainer of 200 hours per month, that roughly translates to 15 hours per week of Account Management, 15 hours of copywriting and another 15 hours of graphic design. That’s less than 2 days a week of service among all the departments.

Q: How will I be able to keep track of hours?

For retainer accounts, your Account Manager will keep you informed of hours used every week. As the month progresses, the client can decide which jobs to hold until the following month and which will take priority. On estimated projects, you will be notified of hours only when it gets to a 70% completion. If more time is needed than what is remaining on the original quote, an addendum estimate is created. There should be no surprises with hours, once you understand how they work.

Q: What does “out of scope” mean? 

These three dreaded words affect both parties. Out-of-scope means the project has shifted to include more deliverables than what was originally quoted. For example, let’s say you have started a print ad project and the estimate covers one full-page layout. Then, it is later revealed that you will need it resized to both a full page and ½ page, and you need a full color version as well as black and white. If those mandatories were not specifically line-itemed on the original estimate, a change order estimate will be generated to cover the additional scope of work. Simply put, the agency did not allocate enough hours to complete the additional needs of the project.

 Q: What do I do if my agency can’t complete all my needs in my allotted monthly retainer?   

There are several options for this situation. The most common is to have a rate negotiated with your agency that is billed hourly once you are in excess of your retainer allotment. For instance, if you have 200 hours in your retainer, but you need an additional 50 for the month in order to complete your needs, then you can simply purchase them. The client is in control of this situation and can determine if those projects truly warrant the purchase of additional hours or if they can be postponed to the following month. If you experience the need for more hours on a continual basis, then you should consider renegotiating the contract. It can be disparaging for both the agency and client to run out of hours every month. Your agency should be able to provide audited time sheets so you can see exactly where your hours are going and how much time is needed in a given month to cover the totality of requests.

Q: None of the initial concepts resonated with me, do I still have to pay for the work?    

Ad agencies are not set up to do selective selling. Meaning, hours start accruing at the conceptual stage, which may require several rounds of revisions before it meets a client’s needs. No matter how much research goes into the creative brief before concepting, the end product will always be “subjective” to the approver. The important thing to remember is that you shouldn’t solely focus on it resonating with you; instead, look at it from your target audience’s perspective. Ask your agency why they chose that image, headline, etc. If you simply don’t like it, be as specific as possible as to what you don’t like about it to help them achieve success in the next proof.