by TJ Njozela (@tj_njozela) Advertising agencies offer clients creative output — whether it is a creative PR campaign, a new design for a logo, a 30-second TVC, or POS elements. So how do agencies charge a client?

Most agencies charge for the particular skill set required to complete a project, ie copywriting, strategy, art direction, project management, production, etc. The cost varies from agency to agency, as well as the seniority of the people who will be working on a brief. Some agencies also charge markups on quotes made by their suppliers, in addition to charging for their employees’ time. But whatever the rate card of an agency might be, here are some things that every agency takes into account when working out their fees.

Ads aren’t art

The Mona Lisa is one of the most-famous paintings ever. In 1962, it was insured for US$100m, which, taking inflation into account, would be over US$780m today. When you take a moment to reflect upon the immensity of that number for a single painting from the 1500s, you can’t help but wonder the reason that it’s worth that much: Why is the creative output of a 16th-century artist worth more than the GDP of a small country?

While advertising is a creative industry, our creative output isn’t art. This is because ads and art serve very different functions. Art is artists’ way of expressing themselves, their views, and their lives; ads are a way to make people identify themselves with a certain brand, and to purchase it. This takes a lot of research, understanding the target audience, conceptualising a solution, and constantly checking it against what the client needs. Unlike a piece of art, which is personal, ads are collaborative.

The reason that agencies charge for time instead of charging for the end product is that the creative output isn’t a “piece”, but a creative business solution.

Relationships matter

In general, agencies sign on clients with a retainer that specifies what the scope of work is, the duration of the relationship, and how much access the client has to agency resources. This is usually a long-term relationship between a client and an agency. Sometimes, when projects are outside the scope of work, or circumstances dictate, they are costed project by project.

The better the relationship is between client and agency, however, the more an agency will go the extra mile and give more value for money.

Time is crucial

Whether it’s a new product launch, a new campaign, a repositioning, changing brand perception, or any other business challenge, there is usually a deadline that comes with it. Every minute counts in order to meet that deadline. The more time creatives spend thinking about a killer concept, the more time production spends on finding suppliers with a competitive quote, the more time strat spends developing a plan to achieve the best results — the more time everyone in the team spends upon figuring out the solution — the more likely it is that something will be created that is not only effective but truly stands out from everything else.

There are a number of systems that agencies use to measure how much time they spend on a particular project. It may seem like a schlep at first, but when you realise the importance of every second that you spend upon creating solutions for clients, you’ll soon acknowledge that your time is the most-valuable thing you can spend.

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TJ NjozelaTJ Njozela (@tj_njozela) is an award-winning senior copywriter at FCB Africa with several years of experience in the advertising industry. More than a writer, he is also a reader, a thinker, and an avid liker of things; and he once walked from Joburg to Cape Town in 30 days to raise funds to buy wheelchairs for people in need. #30Days30Wheelchairs

“Motive” is a by-invitation-only column on Contributors are picked by the editors but generally don’t form part of our regular columnist lineup, unless the topic is off-column.

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