Why Are We Still Paying for Ad Creative Like it's the 1960s?

When marketers talk about ad creative, and specifically how creative is produced, the conversation invariably leads to topics such as best practices, number of deliverables, and turnaround times. However, there’s a topic not being discussed that’s just as—if not more—important than all of these subjects: the way marketers actually pay for creative. 

Many of you reading this will have seen (or heard about) the TV series Mad Men, a show about the goings-on of New York ad agencies in the 1960s centered around the iconic Don Draper. When watching the show, you’ll notice many stark differences between now and then. Pitches take place in smoke-filled conference rooms instead of Zoom meetings; the workplace drink of choice is a whiskey rather than a latte or kombucha; and when it comes to creative, we’re talking TV or print only, with timelines extending over many months as opposed to days or weeks. 

However, among all of this radical change, a few things have managed to survive the decades, one of which is the way that brands are charged for creative. 

Most creative agencies still charge brands using either a billable hour or unit-based pricing model. Over the years, there have been minor tweaks, but the state of play remains pretty much the same: you’ll either pay by an hourly rate, or by the number of deliverables, adaptations, and revisions that you require. 

So, let’s cut to the chase. What’s wrong with these models? They’ve worked for decades. Don’t fix it if it ain’t broke—right? Well, therein lies the issue, these payment models are broken. Both billable hours and unit-based costs are outdated, inefficient ways of paying for ad creative unsuited to the needs of modern marketers. 

As touched upon, the world of advertising and marketing has undergone a drastic change since the days of Don Draper. The most influential of which occurred in the 2000s with the arrival of digital—and subsequently social media—advertising. These changes have brought about a massive transformation in the world of creative, with advertisers now requiring hundreds or even thousands of assets per year as opposed to a small handful of print, billboard, and TV spots. 

This speed and scale at which creative is now needed is putting a huge strain on traditional pricing models. What’s needed is a fresh approach built around the creative needs of today’s marketers struggling to keep up in this lightning-fast landscape. 

The solution to this can be found by looking at other types of tools that marketers use on a daily basis. Adobe, Salesforce, Hubspot, Slack, Figma, the list goes on and on; each of these SaaS solutions that have become so ingrained in modern-day marketing, share a similar pricing structure that enables a marketer to essentially get full use of the software, for a fixed annual or monthly cost. 

This same pricing model needs to be applied to the production of ad creative. 

How often have you been in a situation where you plan the deliverables for the quarter, but then you start the creative project and you realize that you’re going to need more, sometimes a lot more. You may need a different format, some translations, or a copy variation; or your creative may be fatiguing faster than expected, requiring fresh assets to be produced. The fast-paced, unpredictable nature of digital means that additional creative requirements spring up on a regular basis. 

If you’re paying for creative the traditional way, these instances will either lead to you incurring additional creative costs (causing you to go over budget), or you decide to stick with the assets you’ve got (negatively affecting your campaign performance). 

This compromise can be avoided by sourcing creative from a solution that offers a fixed-price plan. With these solutions it doesn’t matter if you underestimate the deliverables you need or if you need to make a quick change on the fly—the cost remains the same. This cost-certainty gives marketers the freedom and the agility to move fast, jump on trends, make refinements, and experiment with different approaches. 

The good news is that these solutions are finally available. At Shuttlerock, marketers are able to make full use of our CaaS (Creative as a Service) solution through a fixed-price annual plan tailored to the production volume and types of assets you’ll need. So you can finally send hourly billing invoices where they belong—back to the past era of those infamous Mad Men.

Learn more about our CaaS plans by visiting our pricing page.