Fee-levels throughout the marketing services sector are likely to merge as the disciplines merge and there is greater collaboration on large-scale projects. “Designers are moving into classic areas of marketing and advertising. The boundaries are harder to see,” comments Kirchner. He believes all marketing services agencies are “increasingly coming to terms with payment by results” – where bonuses are paid if targets are met, and if they’re not then fees are reduced.
Such a system certainly enables creativity to be valued, but as product designers have discovered with royalty-style payments, it is essential to cover costs with some sort of upfront fee.
Wright stresses the importance of negotiating skills in ensuring that not only are healthy fee-levels attained, but decent margins made. “The extraordinary thing is that profit margins for ad agencies can be quite low – around 10 per cent,” he says. And when negotiating fees, he adds, “what matters is the story you tell”.
Rivett states although there seem to be few rules on how to charge for projects, “the one rule is that you should get the fee that represents the value of what you’ve delivered”.