How Much Should You Pay For Marketing and Creative Services?

Not Racing To The Bottom

Marketing and creative costs are a constant question for entrepreneurs and small businesses, because they are new to the world of paying for this kind of work, and a price on service is always trickier than a price on a commodity. I've been on all sides of this question during my career, having been a client, part of the creative team, and now, the owner of my own agency. So here's what you should know.

Independent of any cachet or confidence that you have in your provider, there is a true minimum involved here, and that minimum is the cost of the creative professionals as an hourly rate for their standard of living. If you go lower than that, you are at a risk of not getting quality work, or having the provider become unavailable. It also means that hourly rate is highly dependent on where the principals live, their level of experience, what their other clients will pay, and how much time will be needed to devote to the project.

It's a little bit analogous to going out to eat. If you walked into a restaurant and saw a 39-cent dinner special, you might be tempted to go for it. It also might be palatable. But if that food is sub-standard, or likely to make you ill, it wouldn't feel like such a bargain. You also wouldn't return to the restaurant, or tell anyone else to go there. Or, worse yet, you might spread the word... and the restaurant might go out of business from selling too much food at a below market price, or might attract so much low-end clientele that it drives out their more affluent patrons.

Just like high-end cuisine, a true maximum for marketing ad creative service is somewhat theoretical. You and I might never spend four figures on dinner, but some might, especially if it's a defensible business expense. There are also some agencies, especially when it comes to brand marketing work, where no amount of money will get your project done, since the account isn't in their field of expertise. Those kind of businesses also need to have their current clients help to secure future ones. No long-term provider of quality will want to imperil their existing business, by booking time that puts them at risk of highly negative word of mouth.

So, back to the question. If you are working with an a la carte agency, you can do a rough estimate by looking at yearly salary levels for all necessary team members (copywriter, designer, coder) in your area, then dividing by 2,000 (a rough estimate of the number of billable hours per year, excluding nights, weekends and holidays). Next, you'll need to factor in any applicable expenses (image fees, proprietary fonts, coding templates), add extra hours for QA and management time, and add in likely time for revisions. You also need to know if your providers are efficient with their time, and how likely the end product is to satisfy your needs. That's why RFPs (Request For Proposal) are standard in this kind of work.

So what this comes down to is the eternal question, at least as to how it manifests for most agency projects, is Great, Fast, and Cheap. The best you can hope to achieve is two of those three. Let's get into your options.

1) Great and Cheap.

Possible paths: Catching lightning in a bottle by finding talent that's new to the field, and needs portfolio work to get established. Free-lance art through exchange sites, where a high rate of revision might be tolerable due to low rates. Or getting it so right on v1, that any v2 changes are minor.

Downside: If Great and Cheap are the only factors, projects can take a very long time. Damage to the brand can also result from approval as a matter of managerial fatigue.

Great and Cheap is usually the premise or pitch for "all in one" quotes, where you get X pieces for Y dollars. If there is incredible cost pressure, and you have enough time and discipline to manage personnel that might not share your primary language, it can work out. But at some level, it just seems like you are putting your venture at risk in a penny-wise, pound-foolish decision. It also usually winds up being something that you regret later, and revise quickly.

For clients that need Great and Cheap, it's best to establish a very stringent creative brief or direction before design work begins, stress that express turn or revisions are subject to market conditions, and limit testing options or alternatives.

2) Great and Fast.

Possible paths: Exclusive access to top-level personnel, either through a personal relationship or cost premium.

Downside: Hard stop to iterations, opportunity costs from non-prioritized projects.

Great and Fast can lead to spikes from overtime rates, especially when it's a situation where go-live on a certain date is critical. It's best used when services are re-sold, or when spend can only start on approval.

If you can write off creative costs in the face of other business factors, Great and Fast can be highly lucrative for all concerned... but it can also lead to burnout of your principals. Saving the day is a great feeling for a creative pro, but if you are saving the day every day, you start to look for easier clients to manage.

3) Fast and Cheap.

Possible paths: Exclusive access to a junior level designer.

Downside: Working to template work, with limited technical complexity. Can also lead to branding challenges.

This approach is feasible when you are working in small spaces, or in a clearly defined medium. It's the kind of work that is the most likely to be replaced by automation. As such, it's the least appealing job for any creative pro of quality.

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Finally, a question to those who want to offsource creative work for the lowest possible rate. It may come off as snarky or provincial, but that's not really my intent.

Why do you hate America?

I get that pricing, especially all-inclusive package rates when your designer is working in an area where costs of living are lower, can seem inevitable. If your only goal is to see many options, and you've got plenty of time and patience to shine up from v1 to v8, plenty of other people have made this choice.

But there's also something to be said for working with providers who share your relative time zone for easier revisions, don't have Second Language issues to overcome, and share similar cultural touch points. And getting what you need on v2 or v3 is just a better way to live your life.

When you keep your job domestic, you employ talented people who share commonality with you. They deserve a living wage for that talent, and will spend that money locally, benefiting local merchants and property values, and some of the revenue will multiply again, through tax payments and increased commerce.

It's a good thing, employing people who live in your country. It's also the only thing we do at this American agency. Beyond the patriotism. I've just never been able to get that mix of great, fast and cheap when I had to use those sources in the past. Or felt right about what I was being forced to do. 

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Connect with me personally on LinkedIn. If there's something we can work on for you, hit the form field at the top right of the page. I also welcome email at davidlmountain at gmail dot com.

The Wrong Data: A Marketing and Advertising Tale Of Horror

No One Wins With Bad Data

Part of a continuing series of moments from my career, in which great breakthroughs came from great setbacks. The point, as always, is to not work from fear, but to learn from every mistake. Besides, they make for better stories.

One of my earlier jobs in marketing was with a manufacturing service that had a wide range of marketing activities. We had a highly successful affiliate program, print ads back when those worked, regional events, co-promotional marketing books and more. But one of the most successful programs for us was an anomaly on the data, in that it seemed just way more effective than it should be. It was a local trade show, and one I knew very well, in that it was the place that I had worked at, prior to accepting a position with the manufacturer.

For years, my Marketing brethren and I wondered why we weren't able to replicate the success we saw from this trade show to other events. We upped our game into prime sponsorship promotions, and paid to have exclusive access. We sponsored soft-sell information panels that spoke to our advantages. We improved our booth presence, our swag, and our signage on badges and bags. Still, we didn't get to the local trade show level. We didn't even get close.

After a while, the data was just too predictable to question. There was something about our local area that was just special. Prospects who came to that show ran into a wide range of happy clients. Entrenched media and local industry talked us up. The trade show attracted a more serious group of prospects, which played into our branding. It was what it was.

Time passed. The business expanded dramatically as a result of new catalogs. The challenge to the business became one of production and customer service, not marketing. Our programs became less intense, and we went into a bit of a slowdown. Frankly, I was looking for something to do.

So I started auditing all of our customers for the source of their lead, just to see if I could find something that was worth our time. Maybe I'd catch a mistake or two that would give us a trade publication to stay in, or maybe find that the affiliate program was being over-reported. It was basically an unrequested fishing expedition, and as we had thousands of small clients and no way to automate the work, it took months.

What did I find? A classic mistake by junior call center personnel. When they entered leads from our local trade show, from long-term clients who had stopped by the booth and entered a sweepstakes out of just saying hi to their rep, they overwrote the old source (i.e., old client, no need for a fresh lead source) to the trade show. Just a huge mistake, and one that really spoke to revenue, since some of those clients were among our biggest sources of revenue. We should have caught it years and years ago. We didn't.

Our magic trade show wasn't magic. Once I completed the audit, we saw that it performed about 15 to 20% better than the others, not 2 to 3X. We had wasted a lot of time and resources, over several years, trying to optimize a program that was already functioning at near peak efficiency. And, worst of all, we had failed to spend every marketing dollar to the best benefit of the business.

Lessons learned?

1) Data makes its own marketing reality. We live in a universe of facts and stories about facts, and we tend to treat those stories as if they were facts. Presented with data that we believed to be clean, we quickly came up with reasons why the data made sense... even though it, well, never did. Especially with sample sizes that aren't statistically significant, or from sources that you aren't absolutely sure are airtight, hypothesis can be your undoing.

2) Messengers are, indeed, shot. Change was, as you might imagine, difficult. Some of my marketing brethren felt professionally threatened by the new data, and cutting down our commitment to the not magic show, especially as it was my old employer and I still had friends there, wasn't fun. There wasn't even the expected thanks that you might get from management, since they enjoyed being King of the World at that show, too. But it was the right thing to do for the business. Which is where your allegiance has to lie.

3) Data entry matters. Entering trade show postcards required keypunch data entry from our most junior people, and there was no cross-check of the work. It really didn't take too many errors to throw off the data, and put us on the wrong scent.

4) Bad news today is good news tomorrow. You can cry over the spilled milk, or you can feel very good that you aren't going to keep using that bad cup. I prefer the latter option, but your mileage may vary.

5) Experience helps. If I ran into this set of numbers as a pro today, it wouldn't have taken me as long to suss out the error, because over time, you pick up moments like this that inform your later decisions. Also, when you come into a meeting with more gravitas and war stories, it makes it easier to not go along with the party line. 

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You've read this far, so connect with me personally on LinkedIn. 

And I'd love to hear your Tale Of Horror in the comments below!

Warts Within Reason: Cultivating Effective Customer Reviews

Not Every Commenter, Honest

Let's say you sell stuff over the Internet (radical concept, I know, but take it as a theoretical). And let's also say that what you are selling has interest to your users, maybe to the point where they might know more about it than you do, or want to share their opinions about those products. Finally, let's suppose that, as the Internet has shown, these opinions may become a tad unseemly, or over the top. What should you, as a marketing pro who is concerned with your vendor relationships and branding, do about this?

Well, as much as I'd like to save us all a great deal of words and cut to something pithy... the answer from my experience is, well, It All Depends. Here's the factors that you need to keep in mind.

1) Your company's bandwidth, and commitment to, reviews.

There are sites that don't moderate comments, and those sites become, well, unfortunate. Eventually, automation software will be able to filter out the obvious spammers and purveyors of unrepentant profanity, but until then, you're probably going to have to throw some human eyes at the task. It's actually a fairly great gig for an intern (assuming they have a stomach that can take the harder stuff), since it can provide a deep and quick education on product merits, and a fair amount of entertainment value. But if you don't have one handy, you may need to do it yourself. If so, scan for trouble words, rather than obsess over the content. It's an impersonal medium, with a high degree of anonymity. Poor choices happen. Try not to dwell.

2) The likelihood of your suppliers to go off the rails over a bad review, and whether this would put you at risk.

I used to work for an online reseller of musical instruments, which is an industry where there were more resellers willing to carry a brand's goods than there were, well, goods. At least for the top providers. Which meant that if you offended a certain purveyor of guitars or amps or whatever, you risked losing that account as a provider, and giving your competition an extra bullet in their gun as they attempted to end your existence. Needless to say, we learned, with speed, which brands were going to see (and flip out) over someone's poor opinion of their goods, and who were not. (Hint: it's the same guys who threaten to go ballistic over MAP pricing, or anything else in your agreement. The squeaky wheel gets the grease.)

If your category doesn't have this feature, filtering out over the top negative reviews, assuming they aren't profane, is more trouble than it's worth. If you are at risk, it's not. Simple as that.

3) The technical strength of your community.

The best reviews aren't 100% positive, because that sets off the skepticism of anyone but the tragically naive. Besides, there's always something that's falls on a different point in the Great / Affordable / Durable Venn diagram. So what actually moves product? A strong and vibrant consumer base that generates its own content, preferably in defense of the product's merits. If three reviews are positive, then one troll slams it, and gets shouted down by the next two or three? Ca-ching.

A very important point on this: you can either censor an entry for being spam, profane or legally actionable, or you can let it run as is. Do not, under the fear of a firestorm that's far greater than any possible problem caused by the original review, edit the work in any way. Your approval process should not seem arbitrary. Even if there is rampant misspellings, criminal use of punctuation, or anything else that offends your sensibilities as a copywriting pro. The integrity of your review and comment boards is at stake, and if you start to "clean up" copy, the only thing that's going to happen is that any positive review will seem like a plant. (Oh, and don't plant. For reasons that are too obvious to write, and rhyme with beagle, and crass traction paw fruit, and clawed, but with more a of a fr sound. If you catch my drift.)

Besides, and this one is really hard to admit as a copy writer... those amateur comments with the poor wording, repetitive phrasing, etc., etc.? They've won in many an A/B test, depending on the consumer category, because they just seem more "real" to the prospects. Some days, being a copy writer just isn't fair.

4) The demographic bent of the buying audience.

Well, OK... but what if your demographic is kind of edgy and uses coarse language as a matter of course? Monitor for abuse, but allow. Similarly, if the demo is older and more conservative, or strong in regions with more of a chance to cause issues for your customer service, delete. And if your audience is all over the place, censor to the more stringent crowd, because...

5) Reviews usually provide a reason to buy one product or another. They rarely create business on their own.

Which means that having reviews, and a fair number of them, is important, but no review in and of itself is critical. Finally,

6) Auto-date the work.

The quality of brands changes over time, and a 5-star review from 5 years ago can, and should, carry less weight than opinions from last month. Your goal as a marketer should be to give the prospects honest tools to help buy, not a biased tool that will only produce one outcome. Remember, your reviewers are some of your most loyal and best lifetime value customers. Don't burn them for short-term gain.

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You've read this far, so by all means, connect with me personally on LinkedIn.

You can always email me at davidlmountain at gmail.com.

And, as always, I'd love to hear what you think about this in the comments.