The average digital agency in India is charging Rs 1-2 lakh retainer and I always wondered how they sustain that. I mean, a seriously well-loaded phone costs almost Rs 1 lakh these days! At that rate, how can agencies afford a creative team, digital planner, media buyer, office rent, internet, a business head and late night taxi vouchers? For the same work, a creative agency has to charge Rs 20 lakh to make any profit.
I started my career at a time when the creative agency, PR, activation and media buying functions were all in one agency. And typically they made 20-30% of the media buying – partly as creative fee and partly as commission. And agencies were buying the media. I remember in the 1990s I wrote ‘A Day in the Life of India’ for Mohammed Khan and all the pictures I shot with Raghu Rai were horizontal. But the outdoor and print media bought by the agency were vertical. We had never shot the image keeping vertical media in mind. The only option I had was to crop the picture. And Mohammed saw my struggle and in one second, he rejected all the media that was bought. Of course, we lost some money. But it was a creative person, running a creative agency and he would never compromise on the creative. Today it’s the other way around.
A few months ago, we got the opportunity to work on a political digital campaign. It was a massive project, so we brought 2-3 top digital agencies on board with us and worked with them. To my surprise, all digital companies offered the creative for free, if the client buys the media with them. Let that sink in for a second. The. Creative. Is. Free. We’re supposed to be in the creative business. How can the creative be free? It’s like an architect saying if you use his contractors for the construction, the design is free. Real talent is expensive and every company’s identity is defined by their creatives. Are we saying that creatives have no value now?
I couldn’t help but ask these companies – how can you afford to give away your creative for free? Alas, as the famous expression goes – business is where the money is. I realised the money is in media buying and not in the creative anymore. The more media they buy, the more money they make. Creative is merely a media-filler. And yes, media-fillers can be free.
People often ask me – why are some creative agencies so expensive? It’s simple – we have only one ‘raw material’ and that’s good creative talent. This ‘raw material’ is expensive. They know their value. They have offers from everyone from WPP to Google to Netflix lined up and retaining them is expensive. And trust me, many of advertising’s creative minds are smarter than even new age entrepreneurs. If they start their own businesses, they have more chances of success than many other people today. But they’re not businessmen and women. They’re crazy. They’re passionate. They’re creative. And sadly, thanks to our industry being increasingly run by number-crunchers, they’re a dying breed.
So next time you choose a digital agency, please be wary and not happy if they say that the creative fee is the price of a smartphone.