I was interested to see a piece in PR Week UK today on how confused.com has offered to pay the losing agencies in its recent pitch process for the ideas they presented. In itself this is a refreshing change – anyone who has worked agency side will have a horror story about pitching a client, not getting the business and then seeing their ideas blatantly used later on by said clients. It really is one of the most intensely frustrating parts of being in an agency. So plaudits have to go to the confused.com team for offering to pay for ideas because it’s certainly a positive step. I would be intrigued to see if it becomes a trend. I suspect not.
But the really interesting thing to me is how those pitch ideas got valued. So, I tweeted the news story about the move and asked that very question. Kelly Davies at confused.com was quick off the mark to answer ‘various finger in the air figures Sir! No consistent method. Mixture of hrs spent on pitch v % of proposed fee’. And, without blaming Kelly in anyway, therein lies the problem. In short, in this instance, people’s creativity and expertise are only being valued in terms of hours devoted to coming up with the idea and not the result that the idea then produces.
So, let’s say that a big pitch idea came out of a one hour brainstorm between two senior people and let’s say therefore that the combined cost in terms of hours was £400. Are we therefore saying that a massive campaign idea is only worth £400? I think not. And therein lies the rub when it comes to valuing creativity – as an industry we gravitate towards an hourly model to cost things. That works in most instances but not particularly well for the essence of what we do and what I know clients are prepared to pay the most for – creative idea generation.
Now, our advertising brothers and sisters are way better at this kind of thing than us because they have (traditionally) been able to charge clients handsomely for ‘ideation’. I’m not sure clients are quite prepared to support this approach from the PR industry but it’s certainly food for thought. Because all the time that we continue to value our most important asset, our creativity, in terms of hours spent developing the idea rather than the outcome of the idea, then the longer we remain as the poor relation (in numerous ways!) of the marketing industry.
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Kudos to confused.com.
Interesting article Clive and I love the phrase ‘ideation’ even though it makes me feel slightly queasy. Synergise and leverage also have this effect.
Some interesting business models placing a value of creativity are cropping up at the moment. What are your thoughts in ideabounty.com? Does crowdsourcing creativity pose an opportunity or a threat to PR agencies such as Bite?
Great post, Clive.
A really progressive step from Confused.com’s team, but I suspect one that (for some of the reasons you raise above) won’t be taken by too many others.
Still, reading the story brightened my day a little.
Very nice of Kelly.
Getting paid for ideas really ought to be based on whether they’re any good. That means, a) do they get used, and b) if they do get used, does the end punter behave differently as a result.
Getting paid to sit around drinking lattes and ruminating is probably not too appealing to clients.
Getting paid for making a difference to someone’s business will be.
Michelle
Rest assured, I rather dislike the term ‘ideation’ too – I heard it, funnily enough, from an advertising guy.
Re ideabounty.com, it’s a nice idea insomuch as it certainly stimulates creative thinking in general terms and it may then create strong campaign ideas. But I think to deliver really good creative thinking you need to have received a very strong brief from the client and been able to go back and forth on that brief. Not sure ideabounty quite allows the client/agency dynamic to work in this way? The brief, to me, is all – rubbish in, rubbish out. It’s also because of this that I’m not sure crowdsourcing poses a significant threat to the traditional agency model just yet…
Hi Clive,
I run an agency (web and graphic design) and like your PR perspective, we are rarely in the position to charge for an idea; I have the scar tissue to prove it.
Like you, we pitch for jobs on our own time, and at our own cost. In nine years we have only been offered a fee for a pitch once; and then it certainly was not proportionate to the work undertaken or the value of the idea. However I respected the client for offering it and graciously declined, as it came with a caveat (more below).
What transpired next was interesting, they wanted the other agency to produce the job (a catalogue) but wanted to use aspects of the visuals we produced as part of our pitch. This we reasoned was worth at least the time invested, at full charge-out rates and we priced it accordingly. The client paid.
Whilst I openly rally for more clients like Confused.com – I don’t think it right to knock them for any metric they might use to value the pitch; providing they do not wish to use the ideas. I would probably accept this as a gesture and a contribution for our efforts; knowing we will have imparted some knowledge.
Taking a moment, to sip a cup of tea, what might help is a declaration from the outset that losing pitches will be paid a flat fee of £x as a contribution for their time and attention – with a clause covering usage rights for any aspects of the pitch that the client might wish to cherry pick.
Thank you for a thought provoking article, I look forward to seeing it evolve through comments.
p.s. I recently read somewhere that a creative person can be ten times more effective (valuable) than a non-creative person; perhaps this is a metric we could use 10x hourly rate for ideas.
Myles
Thanks for the response. One thing to emphasise is that I’m not knocking confused.com by any means. I think what they’ve done here is, as I said in my post, refreshing because it’s unusual. And it’s not confused.com’s fault that the generally accepted way to charge for ideas in the PR industry is to revert back to the hourly rate model. I guess my point is really about the PR industry finding a better ( for better I mean charge more!) way to value its creativity and to then have the balls to actually stick to it.
Good points Clive. I got out of front line PR because of clients all too often taking the piss by placing a huge amount of value in PR and then devoting naff-all budget and a 22 year old PR ‘manager’ to it and expecting us to work for little or nothing and then spending most of the time bleating on about how disappointed they are. These days, PR takes on a huge role in communications and your job is never done, unlike other marketing professions that get paid far more handsomely. And no Jim, we don’t sit around drinking coffee, we reguarly pull off little magic tricks – setting out a comms strategy, and instead of running a nice little ad that says what we want to say, we have to translate what we want to say into something that we hope someone else will say in their own language. Try coming up with ideas that do that day in day out – it ain’t easy and we should be paid our weight in gold for it. Confused has made a start and well done for that, but it needs to go much further.
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