Value and price – the creative dilemma
The exploding catalogue of AI solutions can take over many of the day-to-day functions of advertising creatives, and this brings the value of real, human, creative concepts into sharp focus. The value of those brilliant ideas, that are the unique human preserve, is higher than ever – but will the price reflect it?
Many agencies and freelancers are adopting hybrid approaches. In these models, core concepts and ideas may be generated by creative teams or individuals – then alternative approaches for testing and evaluation can then be produced quickly and easily by AI tools. (Generating multiple iterations of visuals and copy are ideal applications for AI.)
The hard production work of adapting and scaling solutions across various media can now be done at speed. As results come in, adaptations and fine tuning can be executed instantly.
For most creatives, this is exciting news. It puts the emphasis on what they most enjoy doing. They want to spend their time on impactful, hard hitting concepts, not sweating over production work.
However, it now raises the question of how human creative work is costed, and the price of creativity calculated?.
Time to re-visit costing practices
In the not too distant past, agency revenues came from three main sources: agency commission on media purchased, mark-up on bought-in goods and services, and production work (usually charged on an hourly rate).
The media landscape has changed out of all recognition and commission is only really relevant to big agencies. Clients are now likely to buy in services such as print, video and audio production, and promotional goods, directly. So little or no mark-up there. Production work is the soft target for AI – but can it be billed at a meaningful rate?
That leaves just two areas for advertising specialist to make a living. Strategic planning and creativity. And it can be argued that’s really where the concentration of client value should be found.
Now, anybody who has had the job of selling strategic consultancy, especially to SMEs, will know what a sisyphean task that is – especially when it comes to discussing the cost. Similarly putting a price on creativity is likely to be a major challenge.
The perception of value
The most effective advertising concepts are deceptively simple. That is their beauty – they appear effortless. So the best solutions don’t reflect the amount of research, planning, time and sheer emotional sweat that goes into them.
Dolly Parton is reported to have said, “It costs a lot to look this cheap.” Well, a similar claim can be made about great creativity – It takes a lot of hard work to look this simple.
I was once in a pitch when the prospective client criticised the concept with the comment; “It can only have taken you half an hour to come up with that idea!” To which the creative director replied; “No, it took me six years at college and 30 years in the business.”
And there lies the problem. With revenue streams truncated by AI how do creative businesses design their costing systems? Will client companies understand where the real value lies in what suppliers deliver?
We are working in exciting times – but with commercial challenges for creatives and clients alike..