Why Pay Your Big Agency Too Much? Choose Your Favorite Reason

If you pay more, is it automatically worth more?

That’s what many marketers seem to think, as reported by Bob Bly, Advertising Age and others. According to a recent survey by the American Association of Advertising Agencies, some clients pay their large agencies (over 500 employees) hourly rates over three times higher than those of smaller agencies (less than 50 employees).  For example:
•    Chief creative director: Large agency $964, smaller agency $27l.
•    Director of client services: Large agency $533, smaller agency $203.
•    Executive director for client planning: Large agency $601, smaller agency $240.

“What are we missing here?” we asked each other here at R&M. Are big agencies’ work that much more effective in the marketplace? Do they provide a really high level of responsive service that we can’t match? Did they take agency compensation lessons from lawyers? What do they know that we don’t?

To find out, we thought we’d run a survey of our own. To participate, just send us a comment with the numbers that stand for your top three reasons. Or create your own rationalizations reasons and send a comment.

The Semi-Official “Top 10 Reasons To Overpay Your Big Agency” Survey

“I’m ready to pay over 3 times higher hourly rates to a big agency because:”
1. They can put all those bodies to work on my business. Someone’s bound to come up with something.
2. A big “famous name” agency makes me look good to the people who’ll be hiring me for my next job .
3. They tell all these great stories about their big successes with other clients. And then they tell me again. And again. And…
4. I just bought a new 60-inch HDTV and want to show my neighbors how good my product looks.
5. I’ll get ideas that are three times better. Just look at all the awards that big agency has won!
6. They can take an incredibly lame and ridiculously stupid concept and turn it into a genuine, bona fide “big idea.” Because they’re a “big agency.”
7. Branding is what’s important, and that’s what big agencies do. We can leave stuff like selling things to the sales department.
8. Those big agency people deserve those fancy offices. Because fancy offices mean better ideas.
9. Our legal and operations departments have their expensive consultants. We don’t want to be left behind, here in the marketing department.
10. Hey, it’s not my money after all!

We know that some readers will object to this, and bring up the old adage that states “you get what you pay for.” Like most old adages, this one is true, some of the time. But this is probably not one of those times.

Tags: 4As, American Association of Advertising Agencies, hourly rates, survey

This entry was posted on Friday, October 16th, 2009 at 10:31 am and is filed under Alan Maites, Signature Content. You can leave a response, or trackback from your own site.