Is Your Ad Agency Ripping You Off? Here's How They Do It!

It’s amazing they get away with it.

IF YOU ONLY KNEW what a lot of advertising agencies have hidden up their sleeves, you’d run.

Read on and you will.

Are they all this way?  No.  But when you know these tricks, you’ll never be fooled again.

2 + 2 = $400.00

Time is money at an advertising agency; boy, is time money!  The typical small to mid-size agency may tell you they charge anywhere from $100 to $200 per hour.

They don’t.  They charge way more.  Here’s how:

Say an agency charges $100 an hour.  The creative director, copywriter, art director, and account executive call a meeting about an ad they’re working on for you.

They talk about their weekend.  Tell a few jokes.  Chit chat and discuss your ad.  This all might take an hour.

You get billed an hour at $100, right?

Wrong!  You get billed $400.  Why?  Because the creative director bills an hour; the copywriter bills an hour, alas, everyone bills his or her time separately.

You never see this because it’s simply billed out of the bulk of your budget. 

Which brings us to our next trick:

What’s Yours is Mine

An agency always wants to know, “What’s your budget?”  That’s a fair question.  After all, why design a $50,000 brochure when all you have is $20,000?

But when you tell the agency $20,000, this is what they do:  They go back to the office and figure out how they can do it for $10,000.

To save you a buck?  Hardly!

They might come back to you with an idea for a 24-page, full color, 8 1/2 x 11 brochure with a pocket folder for inserts.  Plus, they will take care of the printing, getting you 7,500 of these puppies for your $20,000.

Gosh, you think, that’s only $2.67 each.

Just pay no attention to that man behind the curtain -- he’s got half of your money in his pocket.  Because they’ve sold you a $10,000 brochure for $20,000.  And good luck getting them to show you the bill from the printer.

Simply put:  This kind of agency always strives to get half.  They can’t always do it, but that’s what they want.

If they get caught, this is their explanation, “You’re paying for our expertise.”

Baloney.  That’s what the separate agency fee is for. 

Voice Mail?  Cha-Ching!

It doesn’t take much expertise to return a client’s phone call, but the clock is still running.

The account executive calls your number, gets your voice mail, leaves a message at the tone, and hangs up.

Maybe this takes one minute.

But the account executive writes down on his or her timesheet “15 minutes.” 

That’s the typical minimum agencies have their employees bill for any activity.  And some places make it as much as an hour.  Imagine!  It’s the same if they send you a fax, forward an e-mail, or call to wish you Happy New Year.    

If the employee is billing their time the way the agency tells them to, then you are being nickel and dimed for every little thing they do.  You invoice may not reflect it, but they are finding that money by pulling it from your printing budget or media budget or whatever budget they can get their hands on.

I’m Here, but I’m Not There

An agency’s tricks don’t always revolve around money.  Sometimes talent is the illusion.

That’s because the agency considers itself the author of everything it does.  Which is why they hate it when you ask, “Who came up with that idea?” -- or -- “Who wrote that?”

Agencies can be revolving doors.  You may love their reel, be impressed with their awards, moved to tears over the work they’ve done for other clients --

-- BUT IS THAT PERSON STILL THERE? 

Agencies don’t write copy; copywriters do.  Art directors direct art.  Account executives manage clients.  These people move on, get better jobs, are downsized, or strike out on their own.

But the agency still shows the best work it can to potential clients, even if all of the people who worked on those projects have left.

Don’t be deceived.  When an agency you are considering hiring shows you work you like, ask them if the people who developed it are still there.

If they aren’t, ask where they are.  If you truly admire the work, you should consider hiring that person no matter where he or she is.

Remember – the agency should be there to serve YOU.  Get what you pay for.

Be in business to make YOU money; not to line the coffers of the ad agency’s president.

Consider yourself warned.