Fundamentally the advertising creative services business model is still a tough way to make money- but whos in it for the money, right?
Does the name Darrin Stevens ring a bell? The agency account executive with the witchy wife? Darrin Stevens, along with his boss Larry Tate were probably TVs quintessential Madison Avenue men on Bewitched before the Mad Men were even glimmers in their parents eyes. To those that have done time in the agency business, you may be able to relate to the days where grown men had wet bars in their offices and almost always had a pop or two with their clients before sitting down to review the creative, followed by a few more while planning the weekend golf game.
Agency veterans may also recall the panic attacks – Darrin and Larry had a few beauties – because the creative was late, or the media plan stunk, or the art director forgot to include the clients daughter and their slobbering Golden Retriever in the ad.
Samanthas mother Endora could be a real handful, but she was nothing compared to Darrins trials and travails in the agency business!
If any business model needs the assistance of a little witchcraft, its the creative services business. Its the one hunk of cheese of all the moving cheese that has more or less stayed put. Of course Im not referring to the technology used to create advertising or the media landscape, rather its the business model that remains infuriatingly entrenched.
The Traditional Advertising Agency
Those creative services businesses that provide traditional advertising are still making their commissions, still buying traditional media based on CPM. And while the media mix has tripled in terms of available routes, not much has changed in the way that agencys charge and clients pay for creative services.
For the account managers, the headaches have grown exponentially. Over the course of the past 15 years working with a major Madison Ave. agency, Ive seen the number of specialists required to put together an end-to-end campaign quadruple, now challenging the account managers to coordinate work from a much wider variety of departments.
The agency I worked with actually set up different business units to manage the disparate media elements: one for web analytics and SEO etc, another for web production, one for video, another for print, TV, events, social etc etc. Unifying that circus in front of the client could be a real challenge for the mostly green account coordinators and Ive witnessed some horrific train wrecks. Ill admit I was thankful I had moved over to the client side.
Despite all the changes in the services being provided, the fee + production + OOP (out of pocket) in the big shops hasnt varied much. Creative Services businesses that serve the SMB space still live and die project-by-project, hoping what they have to pay their people is covered by the hourly + overhead estimates and that theres some money left over after the paychecks are written and bills are paid.