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Tapping into Your Agency’s Extracurricular Skills

Posted by martydread4evok on October 23, 2009

A former coworker recently contacted me to gain some insight on a project she just started.  She needed to create an award constructed out of sheet metal. It was really just, “do you know of a vendor that could help me out”, as she was finding nothing but dead ends.

With my natural ability to butt in, and my background in fabrication, I offered a few other approaches to production that could better meet her timeline and budget.

It got me thinking about my “extracurricular” activities and the skills I’ve acquired outside of advertising—and how much I rely on those skills to develop advertising for my clients, acquire new business and keep myself fresh to generate new ideas.

In a past life, I was in the automotive aftermarket industry, customizing cars, installing electronics, paint and body…just a lot of general fabrication. It involved an array of materials and skills. Acrylic, wood, fiberglass, metal, leather and vinyl…using them to mold, sculpt, weld and upholster…in vehicles that light up, make sound, go fast or just look good.

My past experience, and current hobby, allow me to build a better trade show booth for my clients. I not only understand the materials, but how to choose the right one for the job, how they are assembled, their durability and so on…not just how to apply a logo to a piece of foamcore that hangs in front of a curtain.

It also helps that I can understand and relate to our automotive clients as a consumer, as an industry “insider” and as their advertising agency.

So I looked around the agency and saw how much extracurricular talent we have. Musicians and actresses, engineers and electricians, contractors and craft mavens, movie makers and more…the list goes on.

And I realize how much we actually tap into our diverse interests…in the interest of our clients.

We’ve been able to enhance our strategy and work in new business pitches by transforming our office into a nine-foot-diameter artery (constructed from PVC and fabric, courtesy of the plumber and seamstress) leading our potential healthcare client into the “heart” of the agency, complete with red and white blood cells (balloons)—truly immersing ourselves in their brand.

Our copywriter has a passion for acting and the theatre. I can see firsthand how her creative outlets bring more creative output to the table—everyday.  Not only is she writing a script for the television spot, but also she sees the potential in an actor during casting to fulfill her creative vision more than anyone else could.

So, imagine a triathlete paramedic who moonlights as a lifeguard. That’s a pool I’d want my kids swimming in.

Now imagine how your agency uses their extracurricular skills to step up strategy, complement creative and raise results.

I’d like to hear about it.

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A Working Lunch – Something to Chew On

Posted by deedee4evok on May 4, 2009

In years past, I would have given a long list of convincing reasons why a “working lunch” equates to a “waste of time” and causes practically zero productivity, along with a high probability of low blood sugar  (especially for the people who do the most talking).

However, I digress, and digest, if you keep the group and the bites small; the conversation focused, you might just be surprised at the results.

Imagine a meeting where there aren’t any phone calls, bosses or other business to distract you. Only a waitress, who, get this, brings you whatever you need. I must warn you, this type of productivity comes at a cost, of course. At around ten dollars per person, which includes the tip, the experience will prove invaluable.

Here are some of my suggestions on how to make a working lunch work:

Stay close – we literally drove across the street to a place we all know and love.

Plan ahead – circulate the menu, encouraging attendees to make their selections before arriving and pre-order if possible.

Prepare an agenda – write a short, concise agenda of what will be covered (and stick to it).

Break it up – discuss a few things, break to eat, continue where you left off (finger foods and appetizers really help too).

Encourage everyone to contribute – this goes hand in hand with the pre-planning and agenda aspect. If the burden and flow of the meeting is shared by all, each person feels like a valuable attendee, thus are encouraged to be prepared, which helps ensure everyone gets to eat.

Make it fun – for those of us in the creative field who get to spend our days brainstorming and dreaming up new ideas, this is easy. For others, it might take some more work.

Designate a secretary – sounds so old fashioned, I realize this, but it’s important for one person to jot down the notes during the meeting and be in charge of distributing them to all attendees once the meeting has adjourned (note: the follow up should be timely to ensure the best outcome).

Leave with a plan – this step goes along with “timely follow up” and “give assignments”. It is essential that all attendees feel as though their time is valuable and the next steps are clearly defined.

Timely follow up – the secretary should compose a document that serves as a summary of the meeting (this should accompany a “Next Steps” document).

Delegate assignments – it is essential to deliver or execute on points made during the meeting or else it really will be nothing more than a waste of time.

Have faith in your employees’ and coworkers’ ability to work outside of the cube or conference room walls. It’s refreshing, and most importantly, productive. Now, get out there and place your order. You’ll be surprised what’s delivered.

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Why does my agency put a mark up on production? Part 3 of 3

Posted by jourdan4evok on March 20, 2009

We’ve had a look at several different compensation structure models. Some clients prefer to work under a retainer model, which allows for long-term strategic planning and an ongoing partnership that works in a proactive capacity. However, if not carefully prioritized by the client, this can also lead to liberally requested assignments that often eat up hours. We also looked at fixed-fee project estimates. With the downturn economy, clients who don’t feel comfortable with long term commitments are choosing this route.

Then, part 2 of the series explored media commission and the various ways agencies are compensating for planning, negotiating and purchasing media in an ever changing landscape. Part 3, the final installment, will cover production markup.

Once the strategic direction is set, the media is planned and the creative direction is chosen, agencies may utilize third-party vendors for the production of campaign assets as necessary. This may include TV and Radio production, collateral, printing, outdoor production, list purchases, shipping, “emerging media” production and any other tangible asset not supported internally.

All third-party services  procured on behalf of the client are often billed to the client at gross rates with an agency commission (between 5-20%). In efforts of obtaining the best possible price, it’s typical that three (3) bids are obtained.

The agency commission covers time and effort spent in selecting and supervising production of all outside services associated with the development of creative. Specific tasks covered by the commission include:

  • Estimating / comparative bidding
  • Vendor selection
  • Ensuring vendor file requirements are met
  • Sending materials out to service
  • Vendor communication for project success
  • Quality control
  • Press checks (may be multiple)
  • Coordination of product delivery

So, can you go to Kinko’s and make your own brochures? Of course you can. Client’s may elect to faciliate production on their own. However, will you be able to identify issues with the spot varnish, color saturation or adjust issues from pagination? If not, the commission is well worth the quality assurance.

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Don’t Stop, Look & Listen, Repeat.

Posted by deedee4evok on February 25, 2009

Sometimes it’s best not to trust your instincts when it comes to marketing, especially if your views are shortsighted. One sure fired way to go out of business is to act like you already are—by ceasing to communicate to your target via marketing efforts, events, articles, etc.

Let’s say for instance, we instructed you to think and act in the opposite direction of your gut? That is if your gut is telling you to hibernate and come out when you sniff the first hint of blooming business. If you’re a business owner, stop for a moment and think like your customer base. Or it might be more fitting to suggest that you think of the things you would like if you were a loyal, or even wayward customer. As we’ve mentioned in past Free Ad Candy entries, handshakes and handwork are making a comeback during this technically-driven, virtual age. It’s still considered good manners to send a handwritten note to a client. Or forward articles or tidbits of good advice you think they might find useful—like this Free Ad Candy, for example. Don’t worry. Just do something. Improvise. Get creative. Run with scissors. No, of course we’re kidding.

Run, don’t hide—keep your face out there. Both your marketing messages and your actual face. Network. Attend functions. Make calls. Reach out. Spread your word (and do it with joy—start by using terms like “Glee-conomy” instead of “Gloom-onomics”). Peddle your wares. Remind people you’re still doing business—and you’d like to be doing it for them. Maybe even at a discounted price. Maybe you’ll run into someone you can partner with on a project or event—and do a little bit more together instead of doing nothing alone.

Keep your messages moving through the marketplace and more likely than not, you will still have a place in the market. Perhaps your ad spend is smaller—just like some people’s shopping lists—but people are still buying products and engaging in both required and recreational products and services. Stay in their minds so they don’t wander somewhere else, like to your competitors’. Find out what matters most to your consumer and you might just discover a way to become relevant and necessary. If it’s poop you see, find a way to be toilet paper (or a pooper scooper…foreshadowing alert). Or garbage, be a trash bag. Murky waters, become a filtration system.

As business owners and consumers are adjusting, so are the employees, households and schedules. For example, let’s take Leslie, a stay-at-home mother of two small children, whose husband owns a business that he works very hard to keep running better and better. Often working into the late hours creating new opportunities for his shop and staff so they may all stick around during such tough times, Leslie’s husband doesn’t keep a nine-to-five schedule. Similarly, Leslie’s neighbors and friends’ neighbors have also taken to staying late, picking up extra shifts or even part-time jobs. All of this creative energy and busying oneself left something to be desired…for the pets, mail and plants of these uninhabited homes. Suffice it to say, Leslie found a way to capitalize on peoples’ needs during these stressful times by filling their pet sitting needs.

Take a lead from Leslie, adjust your offerings. Or even lower prices. Be flexible in what you’re willing to deliver and how you deliver it. But overall, keep your promises and you will keep your loyal customers. Everyone is making adjustments in an effort to survive—cutting back here, investigating alternatives over there—your business’s marketing, offerings, products and services need to follow suit (or better yet, be the one setting the example). Think about the cell phone—fifteen years ago, not many people had one—but today, everyone has a cell phone, a cell phone charger (for the house, the car, the airport), a cell phone case, clip and docking station, cleaning wipes, ring tones and rhinestones. More so, as the cell phone is a communication mechanism, there’s residual income to be made—be it two-year contracts, rollover minutes, family plans or pay-per-minute use. There are à la carte plans with texting, international calling, email, you name it. How can you go à la carte? Like Newton’s third law of motion, “To every action there is an equal and opposite reaction.” If someone puts their hand out with a need to be filled, find a way to put something of value in said hand. Chances are they’ll reach out to you again and again. Listen carefully—can you hear your opportunity calling?

Listen what’s not being said. If all you think you’re hearing is doom and gloom, you might find yourself in the midst of a self-fulfilling prophesy. There are many ways to survive and prosper in a recession. Just like in a natural disaster or depression. You need to sharpen your intuition skills—because dumb luck is unlikely. If you started your own business, most likely you have what it takes to write the script of a pilot that can get picked up by the collective network and become a hit. Get out there and find out what the customers need now to survive. Think of an idea with legs—like our pet sitter mentioned above.

Take time to make future plans. Catch up on what’s been set aside for a slow, rainy day. Clean out the closet, recycle an idea, follow up with old customers, adjust your business plan, teach a class or take a class. Once things turn around, you’ll be ready to put your new plan of attack in motion. Write articles, write blogs, get people together for panel discussions or product & service exchanges. Working out a trade agreement can work—for complementary businesses. Keep things moving and business will gravitate toward you—especially if you stay positive. Attitude can play a big part in keeping customers. No one wants to be near the negative energy in any room—particularly if it’s their free will and money we’re talking about.

Repeat your own past effective behaviors, as well as some of the greats who survived bad times—you know, when things were really bad—like when disease, plague, war and famine were real, everyday fears, before global marketplaces, the Internet, free delivery and free will. Somehow we all made it to this point—with lots of advancements in technology, science, medicine, politics and the way we advertise the newfangled things we have to offer. How can you be the next advancement in a way of thinking, doing or buying?

So, to recap, we suggest you stay your own course or find a new one you can tread during such times. Don’t let your marketing efforts go dark overnight, as advertising doesn’t work one day after it hits the marketplace. Adjust both your way of thinking and the wares you offer. Think about what your customers really want and need now—find a way to deliver it—and you’ll still have customers to serve and a business to run. Stay connected, network and keep the lines of communication open with prospective business partners and customers.

Keep forging ahead and blaze new trails. Remember, don’t stop your advertising, public relations and marketing efforts—or you’ll essentially be stepping aside and allowing your competition to play through with your caddy, your clubs and your lucky ball. So, keep playing ball. We will bounce back.

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Be Mindful Readers, Part I

Posted by deedee4evok on February 3, 2009

Since we can’t be mind readers and inexplicably know what our potential customers are thinking and thereby doing; we can at least be mindful readers and study from afar to get farther – or closer to our end goal.

As the New Year is in full swing and we’re all waiting for the pendulum to swing some other way, which per the usual, we feel compelled to bestow a few words of our collective wisdom upon you. What’s more, we are accompanying our free advice with a recommended reading list. In an effort to keep it short and sweet, if not bittersweet, the requisite list of ten is being culled down to nine in honor of ringing in 2009. Well, maybe there will be a wildcard number ten at the end of the list.

Our list of recommended mindsets, along with the mindful readers list isn’t given in vein, yet in the same vein as fake it ‘til you make it and dress for the job you want, not the job you have. Some may say that this is what got us in this mess to begin with, but in advertising and marketing, it holds valuable truths that are timeless lessons, both personally and professionally.

As we hunker down and maximize our time by minimizing the excessive, why don’t we do it with a book in hand. Even if it’s read on an iPhone or listened to on an iPod, it’s a good old fashioned way to make things closer to “right” by reading.

1. Mind: Emulate the greats and learn from the masters. – Read: Advertising Best Practices 2008-2009: Industry Leaders on Creating Attention-Getting Platforms, Generating Profitable Campaigns, and Preparing for New Media Trends by Aspatore Books Staff.

Advertising Best Practices 2008-2009 is an authoritative, insider’s perspective on the newest trends and best campaign strategies of the past year, as well as the next big thing to prepare for in the year to come. Featuring Presidents and CEOs representing some of the nation s leading advertising agencies, this book provides a broad yet comprehensive overview of how leaders in the industry approach the challenge of developing creative and attention-grabbing campaigns that stand out in today’s barrage of media.

2. Mind: Focus and narrow your message and products and services offered. Determine what your main thing is and pinpoint what really matters. Once you know, others, like your potential customers, will know better what to do. – Read: The Pardox of Choice, why less is more by Barry Schwartz.

As Americans, we assume that more choice means better options and greater satisfaction. But beware of excessive choice: choice overload can make you question the decisions you make before you even make them, it can set you up for unrealistically high expectations, and it can make you blame yourself for any and all failures. In the long run, this can lead to decision-making paralysis. And in a culture that tells us that there is no excuse for falling short of perfection when your options are limitless, too much choice can lead to clinical depression.

3.  Mind: Leverage Partnerships to maximize ad spend as budgets decrease. – Read: Guerrilla Marketing: Breakthrough Strategies: Triple Your Sales and Quadruple Your Business In 90 Days With Joint Venture Partnerships by Jay Conrad Levinson and Terry Telford.

How are you going to double, triple, or quadruple your sales in the next 90 days and expand your business exponentially? The secret is with joint venture partnerships. Whether it sounds daunting or oversimplified, the plain truth is, it works. You can take your business to the next level with the power of joint ventures.

4. Mind: Practice fiscal and social accountability and responsibility for a better global marketplace in which you can sustain. – Read: Strategies for the Green Economy: Opportunities and Challenges in the New World of Business by Joel Makower.

Business leaders searching for a green strategy encounter few roadmaps and established rules and plenty of hidden twists and turns. Strategies for the New Green Economy describes how companies can succeed in the green marketplace, keeping pace with customer and societal demands to reduce their environmental impact.

5. Mind: Be contagious and go viral. Decrease wasted impressions by increasing the use of technology via social networking and actual networking. Type, text, twit and talk your way into the minds and manners of your target. – Read: Secrets of Social Media Marketing: How to Use Online Conversations and Customer Communities to Turbo-Charge Your Business! by Paul Gillin.

Secrets of Social Media Marketing is a handbook for marketers and business owners to use in deciding how to employ the new social media for online marketing. Social media has quickly moved from the periphery of marketing into the forefront, but this is a new and quickly-evolving field and there are few established formulas for success.

6. Mind: Experiment with experiential marketing and wash your hands of the type soap box people stand upon and box they claim to be thinking outside of. – Read: Experiential Marketing: A Practical Guide to Interactive Brand Experiences by Shaz Smilansky.

Experiential Marketing looks at the experiential marketing era, which focuses on giving target audiences a brand-relevant customer experience that adds value to their lives. Experiential marketing is made up of live brand experiences – two way communications between consumers and brands, communications which are designed to bring brand personalities to life.

This book demonstrates how experiential marketing fits in with the current marketing climate and how to go about planning, activating and evaluating it for best results. This is essential reading for both advertising and marketing practitioners and marketing students.

7. Mind: Know when to hold ‘em back and know when to fold ‘em in half. It’s imperative to discern the difference between cutting, or folding, budgets and cutting your losses because you’re just not making the cut. – Read: Guerrilla Publicity: Hundreds of Sure-Fire Tactics to Get Maximum Sales for Minimum Dollar: Includes Podcasts, Blogs and Media Training for the Digital Age by Jay Conrad Levinson, Rick Frishman and Jill Lublin.

The Internet has not only changed the sheer vastness of services and products available to consumers, but it’s significantly changed the way businesses communicate with their buyers. The good news is that new technology makes it easier for businesses to get the right product to the right customer at the right time–and at a fraction of the cost. Completely updated and revised, this book uses the expertise of today’s top media gurus to show you how to get the word out about your product or business and reach even more buyers–without the cost of a traditional big budget campaign!

8. Mind: Know how to sell. Not just on paper, but to the people who will grant you access to their public. There are certain gatekeepers that must believe you have the right combination to get out there and stay out there. – Read: Perfect Pitch: The Art of Selling Ideas and Winning New Business by Jon Steel.

A professional “pitching coach” for one of the world’s largest marketing conglomerates, Jon Steel shares his secrets and explains how you can create presentations and pitches that win hearts, minds, and new business. He identifies the dos and don’ts and uses real-world examples to prove his points. If you make pitches for new business, this is the perfect book for you.

9. Mind: Swim with agility like a little fish in a big pond that is yours to explore and expand, effectively and efficiently. And deliberately. – Read: Eating the Big Fish: How Challenger Brands Can Compete Against Brand Leaders by Adam Morgan.

A revised and updated version of the classic book on what it takes for small brands to eat the big tuna. Since Wiley first published Eating the Big Fish in 1999, the concept of the challenger brand has become a mainstream idea among marketers and advertisers. But Adam Morgan’s classic is still the best and most definitive study of the way challenger brands take on and defeat bigger competitors, and this 50,000-copy bestseller has been tremendously influential in the marketing and advertising arenas. For this new edition the author has interviewed 30 fresh challengers, and explores today’s radically different marketing environment.

10. Mind: Get back to the basics with some tried and true triumphs by one of advertising’s greats. Climb your career ladder by leaning on a tree with some of the best advertising roots to ever grow an industry by sharing advice. – Read: Ogilvy on Advertising by David Ogilvy.

A candid and indispensable primer on all aspects of advertising from the man Time has called “the most sought after wizard in the business”.

There are so many more thoughts and things to thumb through we’re like to dispense, but that’s what Mindful Readers Part II is for Readers.

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“Non-traditional” Holiday Marketing

Posted by martydread4evok on January 26, 2009

A few years back we began an initiative to maintain awareness of a brand using “non-traditional” holidays as the impetus for this outreach to their audience. To this day, the program continues with much success for our client—to the point that their clients wonder what we’ll do next.

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
halloweenpromoA 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!

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Which Advertising Agency Compensation Structure Is Better For Me? Part 2 of 3 (Media Commission)

Posted by jourdan4evok on January 19, 2009

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 for creative services, 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 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.

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Handwork vs. Technology

Posted by martydread4evok on December 19, 2008

Recently we developed a campaign for a financial industry client that involved illustration as a foundation for the visual imagery and it got me thinking.

Thinking about how much we rely on technology as a tool for design, writing, even to read this blog.  Thinking about how much I appreciate “handwork.” Thinking of the time, talent and dedication it requires to create something with your hands.

That’s the reason I got into the world of advertising. Well, not directly. But my passion for illustration and fine arts led me down the path to art and creative direction.

I enjoyed the process of creation—the idea, the execution, the results. And the tools…oh the tools. Pencils, pens, erasers, papers, knives. Things that spray from cans. You had rulers, big tables to work on. And the stuff you created took hours upon hours until it was just right.

And it was YOURS. Even if you gave it away for an ad, a t-shirt or a book cover—You did it.

So now it’s hours and hours behind a box of knowledge. The glare from the screen. The hum of the cooling fans, slowly bringing you into a state of consciousness somewhere between jet lag and REM sleep.

Now I feel like I moved some stuff around on the screen. Set some type. Blah.  My Mac drew the perfect circle, I just told it how big I wanted it.

Technology has overtaken the true art of handwork.

Things are slick. And glossy. And exact.

Handwork Flourishes

Wall-to-wall handwork.

Yee-Haw Industries: Wall-to-wall handwork.

I recently took an unexpected trip to Knoxville, TN.  While there, I was hoping to get a few minutes to visit an old friend. Yee-Haw Industries. (I’m really not their friend… but I enjoy their work so much, their handwork, that I’d be their friend.)

Yee-Haw Industries  is primarily a letterpress printer—the “old” kind of printing with wood type, lead type, hand-cranked printing presses. Think old west meets deep south and they made a circus poster.

Old wooden floor. smells of  paper and ink and the solvent you clean the press blankets with. They had the big tables and the wood cabinets. Stuff made of cast iron.

I think the only need for electricity was for the coffee maker and the lights.

Cabinet after cabinet of lead and wood type.

Yee-Haw Industries: Cabinet after cabinet of lead and wood type.

Everything in there was done by hand.  It was a museum of fine art, design and typography with people touching the exhibits. It was wonderful.

You can see the skill, determination and passion in every print they create. The lines are rough. The ink is a little heavy here and a little light there. Technique, limitation of the process or human error? Who cares—I loved every minute detail of it.

And they OWN it. It’s THEIRS. The style, the techniques—even when they give it away for a poster or a note card, they did it.

Give Them a Hand

So I bring this back to that campaign we developed for the financial client.

Part of our pitch was that the (uniquely) illustrative nature of the campaign was representative of their  history, tradition and the relationships forged with their customers.  Like they did it back then. And do today. I explained (and truly believe) that the consumer will make an emotional connection through the illustration to the brand. And that ‘s (part of) the battle.

They liked it. It’s going to run. I think they saw through our dog and pony show  and made an emotional connection with the artwork. The handwork. It represented them and related to their audience.

And most of all, THEY could OWN it.

Have you noticed a return to handwork? Or has it never gone away? And, what is unique about your campaign—how do you OWN it?

I’d like to hear your responses.

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Which Advertising Agency Compensation Structure Is Better For Me? Part 1 of 3

Posted by jourdan4evok on December 12, 2008

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.

 

 

 

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