Five tips for benchmarking creative agency costs

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22/12/2011
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WFA research has identified five tips that help advertisers gain a solid understanding of creative agency costs when they are pitching for your business.

Based on 24 responses from the Global Communications Purchasing Action Group, the responses provide a simple checklist for brands looking to gain better oversight of supplier costs. The survey was carried out in October 2011.

1. Ask for hourly and daily rates for each role. Respondents typically asked for a detailed rate card for standard roles as well as resource allocations covering the scope of work. They used this information to benchmark costs against their databases. One of those surveyed said they also asked for base salaries as well as billing rates in order to calculate a professional services multiplier.

2. Work as hard as possible to detail the brief and scope of work up front. Many members defined this as the best way to fully understand costs and recommended the use of marketing department templates to help put projects into buckets and enable cost comparisons. A key goal was to get a proper understanding not just of agency cots but also time and staffing levels into order to compare resource investment across different agencies.

3. Break the creative fee down into different buckets. Ask pitching agencies to split costs into four clear areas: strategy/big ideas, transcreation/adaptation, production and tools and process to give you a better idea of resource allocation at every stage of the creative process.

4. For new projects and untrialled technologies you need to take a different approach. Most members suggested a blend of timesheets from the agency together with market understanding to estimate time needed but information from other markets can also be useful. If this doesn't produce an accurate enough estimate then a detailed request for proposal or pitch – involving up to five different agencies – should produce a clearer result.

5. Remember that it's not just about the rates. Creativity is ultimately a very subjective area and decisions about directors, music and talent, for example, are critical not just to the overall budget but also to the success of any campaign.

For more information on the results of the survey please contact Steve Lightfoot at S.Lightfoot@wfanet.org or visit the WFA's Global Knowledge Base.


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