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April 14, 2011
Ad People Need To Follow The Money — If There's Any Left
Is advertising worth much anymore?
A freelance copywriter friend of mine recently told me that she had been offered an assignment to do an ad campaign — including outdoor billboards — for 10 cents a word.
“So if I develop a billboard it would pay less than a dollar,” she said.
While a buck a billboard seems a little extreme, anecdotes like that one are becoming more and more common. The pricing pressure all companies feel these days trickles down. So what’s the path for ad agencies, marketing firms, and the people who work for them to make money?
It won’t help any of us to lament the continuing devaluation of creativity. Or the advent of crowdsourcing. It doesn’t matter if you’ve looked at a great ad or reflected on a brilliant marketing campaign and said, “not everyone can do that.” Everyone is doing it. When Fortune 500 companies tell us to secure a stock photo for $15 when they could easily afford to hire a professional photographer (and agencies agree to it), it’s no surprise that other creative disciplines will be rendered cheaper and cheaper.
Our knowledge economy has spread the knowledge around quite well. And made it easy for certain jobs – writing, design, photography, videography – to be done and spread by anyone. It’s why there’s much more demand in advertising right now for interactive types like programmers and developers than other types of folks. They’re the ones bringing the work into existence. When it comes to execution, the ideas themselves don’t seem to have the intrinsic worth that actually making them does.

When it comes to being profitable, as a person or a firm, it’s one of the things many rank-and-file advertising professionals, especially creatives, don’t really know: How does an agency make money? I’m not talking about a methodology of charging, as in “we bill by the hour” or “we take a media commission.” I’m talking about how agencies stay profitable. What clients are willing to pay for? What are they balking at? What kinds of services and business models command a premium these days?
We can look at some of the ideas being tossed around:
Creating utility? Yes, if we do work that actually serves a utilitarian function for marketers and their customers, there’s value. But most ad agencies aren’t in the business of creating useful apps or customer experiences. It’s simply not the strong suit of agencies used to creating short-lived ad campaigns.
Performance-based compensation? For years, people in marketing have tried to figure this one out. Not a bad idea, but often one that’s simply hard to calculate because of all the external factors that boost or hinder a marketing effort.
Proprietary products and intellectual property? I tend to think that agencies should be in the business of inventing and making their own products. Nothing would give agency employees more well-rounded knowledge than building a brand — their own brand — from scratch. And a little ownership pride in having created something tangible other than an ad campaign.
Yet most agencies are still slow to pursue those types of ideas. So they stick with what’s brought them to this point. Charging clients for thinking, research, making ad campaigns, and buying the space and time to run them. That business model still prevails much of the time.
And there’s waste everywhere. We’ve all seen it. Numerous marketing proposals and presentation decks that lead to multiple rounds of creative concepts, only to be endlessly henpecked, tested and revised. None of which results in a finished product that feels any more compelling than it would have without that laborious process. No wonder clients don’t place a high value on it anymore. All you have to do is watch a little TV or flip through some magazines to see billions of dollars being spent for naught.
To read the online chatter some days, it feels like the whole industry is on the verge of a free fall. And that soon, marketers en masse, will call BS on everything ad agencies have been doing for years. I hope not. What we do works, sometimes. But no one’s going to want to do it for 10 cents a word.
So what can we do to stay valuable? These days, There’s no pat answer for everyone. But I know this: If you say you have the answer, I’m sure lots of ad professionals would pay you good money to learn it.

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Since 2002, Dan Goldgeier has been writing the most provocative advertising columns about advertising and marketing -- over 170 of them, covering every related topic you can think of. Now based in Seattle, Dan is a copywriter and ad school graduate who's worked at shops big and small. 

Visit his copywriting websitesee his LinkedIn profile or follow him on Twitter.

And please, buy his book for 99 cents.


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