Cost Analysis

Understanding pricing for creative services

What we do

It is likely that more errors are made in the procurement of creative services than in almost any other area. The ‘creative’ element is what makes it so difficult to quantify the value of each item.

Whilst there will always be ingredients of a creative campaign that are difficult to pin down, the vast majority of commissions can be broken down into the constituent parts and costed. This is a great help to anyone managing a busy creative department.

At Town & Town we undertake the task of breaking apart each item in the marketing mix and pricing each component, creating a rate card or ‘menu’ for the majority of marketing items. Armed with this information, the marketing executive gains a high degree of control over the budget.

Here’s a situation you may find familiar…

In-house Creative Director, Paul, was being challenged by the head of IT on a hefty bill from their agency, who had charged around three times as much as for an almost identical job for Finance just a few weeks previously. Questions were being asked. The agency had responded with a long email, strenuously defending their charges, but as far as Paul was concerned, it still looked like a clear case of opportunistic pricing.

Finding a solution

He was less than keen to forward their email to the IT Director. Now was high time, he thought, to get a better handle on external creative costs to avoid nasty surprises down the line. So he commissioned a report which carefully analysed all the ingredients that went into producing their latest marketing material, and from estimates called in from a number of suppliers, a matrix of charges from the cheapest to the most expensive was produced.

Resulting benefits

Armed with this new information, Paul arranged a meeting with all the department heads, including IT, to present the findings. Now they were all in a position to take advantage of the keenest prices for the more straightforward jobs, spending more where appropriate on more complex projects, but all within a clearly defined pricing structure. No more nasty surprises in Paul’s inbox from now on.