WEIGHING OPTIONS: Billing For What We’re Worth

A Sense of Worth

Ages ago, I wrote a blog called, “Trumpet Over The Horizon.” That article dealt with my sincere belief that clients want agencies to charge realistic, with prices for services. I propose to know clients a capped mount for creative services (i.e. creative director, art director, copywriting fees, etc.) . The primary fee would be joined from generating and placement of ads, an amount not excessive of than 12%. By tradition, agencies are paid 15% of place ads idea was for the 3% differential to replace back into advertising. I wanted to benefit the client.

Here is the major problem with my former hypothesis: Advertising agencies put up with more than crap than people outside of agencies know. Accounts can be a headache simply because a client is demanding. So it doesn’t matter what I discount because it’s never enough to please. The resolution for me is to bill for the work that we do at the prevailing rates. It may sound expensive, but that’s the way it is. We are a creative agency, we are very good at we do, and we want to do it pay for it.

Take a look at what is happening nationwide. In New York City, where things are admittedly higher, senior digital executives bill clients an average approximating $350 an hour. Conservatively, creators performing similar work at traditional agencies on Madison Avenue bill at $700 per hour. Where based in Los Angeles, and things in Adland is no different. We worked our asses off and quite frankly, when clients refused to acknowledge what we are doing what is to enhance their business, it rankles.

I’m not making this up. A 109-page report published by the authoritative 4A’s reflected contains a list of the most agencies of all sizes in 2011. These figures regarding hourly rates billed by agencies is published the report. The survey is an update of a labor-billing study conducted three years ago. The report collected data from positions such as account management, creative, analytics, digital, media services and talent management. Having been reported I noticed that Los Angeles and New York, and not to disparate in charges. The Midwest probably is more, but not by much. I think the point is that we work hard for what we do. Agencies of all sizes are filled with people who are immensely talented in advertising and public relations. Our brains are taxed, we often work past out boundaries of times and learning to give the best possible product to a client. Clients should be appreciative of that – often they aren’t.

Let me give you an example. Perhaps this is hypothetical. An agency is contacted by a startup company. The client company wants logos, graphics, web content written, brochures, and other collaterals, in addition to the development and placement of ads in newspapers and magazines for its products.  To me this is a full marketing plan, and I told him so. Before, we proceeded with the work, and after three clients meetings of three hours duration, I drafted a letter of intent. The letter of intent denotes my agencies obligations to the client. It is an offer and acceptance at common law. Most people understand this. This client wanted us to partake in emergency work that would’ve taken up more than twenty hours using a team of five. I told this client as tactful as possible that they had not acknowledged the letter of intent. I cautioned them that if we did as they asked, our agency would have engaged in substantial performance – enforceable contractually. This client counter proposed essentially saying that they reserved right to pay us only if satisfied with our work. Payment would be ninety days later. And, assuming that they retained us as their agency, our monthly fee would be paid ninety days after it became due.

Quite honestly, I’m not unfamiliar with clients who have abusive, bullying, attitudes, but this joker took the brass ring. We received letters from him wherein he changed the company’s plans, blaming us for the changes in rejecting the cursive work we did for them. I did not laugh because this was not funny, but a little sad.

Clients like this should be billed for the full amount of services provided. I’m not afraid to do this because as a matter of principle.

 Here is the upshot. Someone performing work under a contract can invoke the common law rule of substantial performance and charge for the reasonable value of your services or, “quantum merit.” I acted as a creative director on the client projects. My billing rate is no different than that digital creative in New York, or $300 per hour. My art director and graphics department bills at $160 an hour, and my copywriters bill at $150 an hour. Multiply that times 20 and you have sticker shock. But that is the nature of the business – we deserve every cent we charge. 

The new reality is a second sound of the trumpet over the horizon. Billing for what we are worth because we have mouth’s to feed. There is a controversy in the industry. Small agencies like mine tend to forgo billing. The larger agencies, not as reticent, you get stuck like a crazed vampire.

As an agency head, o must protect my stake in my business. Treat everyone fairly, do a great job, but expect the same to done for you. Some people neglect these principles, and issues develop.

Benchmarks are in place for a reason. Agencies often are treated worse than the maid working for the “help.” I do not pay myself $300 an hour. But the benchmark is equivalent, not only to the suggested retail price, but to our sense of worth. I don’t know it is going to be a backlash, but I know what we are worth. We are agency and will start acting like one, because billing is value based.

Bernard A McNealy, President/CEO

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