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Superman and Lex Luthor, Churchill and Lady Astor, Hillary and Obama – just a few people who despise each other about as much as advertising creatives and account executives. The animosity between the two is truly legendary. As one creative director said, “I never met a good account executive I didn’t despise.” But few people really know why. Most assume it’s because account executives have the reputation of being spineless, sycophantic yes men to clients. And because creatives are notorious, egomaniacal prima donnas who pitch tantrums when their “brilliant” work doesn’t sell. That’s only part of the story.

The real reason creatives hate AE’s and vice versa, has more to do with a seriously flawed business model than differences in personalities. The truth is, agencies today do not make most of their money from creating and producing ads. They got out of the idea generation business long ago. Agencies realized it was much easier (and more profitable) to give the work away and make a big, fat 15% commission on the media buy. But that’s not the case anymore. Large media buying companies have all but eliminated that source of income. So agencies have been forced to come up with other ways to take money from their clients. Hence, the explosive growth in research and brand planning. Ten years ago, no one had ever heard of a brand planner – now there’s a Planning Department in every agency. The big agencies purchased interests in research companies. They trademarked their own processes of brand analysis and hawked them as an essential ingredient to every marketing plan. They created in-house studios to produce animatics, storyboards and “scratch” radio spots for qualitative and quantitative testing. To ensure profitability, agencies then force creatives to use these in-house facilities.

The result? Ad agencies are now in the business of not producing ads. The business of testing, researching and fancy sounding trademarked processes to find “the soul” of a brand has become the real source of income for ad agencies. Income that had to be replace when agencies were forced out of the media buying business.

As a direct result of all this, the goals and priorities of a really good account person and a really good creative are 100% diametrically opposed to each other. Take your typical AE. His #1 priority is to make sure the agency is always profitably billing the client for something. His #2 priority is making sure the client is happy and the relationship is sound. Notice nothing was said about selling creative executions. Whether an ad sells or not, the AE gets paid the same amount. In fact, an AE might get a raise by not selling a campaign – as long as priorities #1 and #2 are met. In essence, there’s absolutely no incentive whatsoever for an account person to sell an ad. Period. So you see, a really good account person doesn’t really care if an ad sells or not. In fact, selling an ad may violate priority #1. By allowing the client to kill concepts, the really smart AE ensures the agency will be able to bill the client for another round of creative development, planning, research or —”Cha-Ching!” – all three. Crazy isn’t it?

On the other hand, a really good creative’s #1 job is to sell award-winning work. His #2 priority is to just sell something, anything so he can spend more time surfing the web and writing his screenplay. Notice that a creative person’s priorities do not include billing more hours and making the client happy. Creatives (unless they’re freelance) get paid the same amount of money whether they spend one hour on a project or 50. And to complicate matters, agencies always make sure their creatives’ time is maxed out on several projects. So when a client doesn’t buy work, it means the creatives are going to have to work late nights and weekend just to catch up. If this happens too often, (and it always does) art directors and copywriters will burnout. Sometimes permanently. That’s why creatives go nuts when their ads don’t sell – chances are they’re already on the verge of a nervous breakdown. Legendary copywriter, Jerry Della Femina once opened a 50th floor window and threatened to jump out if a client didn’t buy his work. The client did buy it and Jerry went on to write a best seller called From Those Wonderful People Who Brought You Pearl Harbor and to run a very successful restaurant in the Hamptons. But I digress.

Now you know why creatives get that desperate look on their faces when you don’t approve their concepts. Great ideas do not come easily. For that matter, neither do bad ones. Concepting ads takes a lot of blood, sweat and tears no matter how you slice it. And the thing that kills creatives more than anything else, are AE’s who treat ideas like they’re a dime a dozen. They’re not. On the other hand, nothing ticks off an AE more than a creative who throws a tantrum in front of the client. It jeopardizes priority #2 – the relationship. And if the client buys a campaign right off the bat, it will jeopardize priority #1 – squeezing as much money out of the client as possible. This is also why creatives demand to present their own work and precisely why AE’s don’t want them to.

So how do you fix this age-old problem? Should Jimmy Carter and Henry Kissinger step in? Actually, the problem is a pretty simple one to solve. Unfortunately, most agencies are too stuck in their ways to make the necessary fix. Agencies have to change their business models. Right now, agencies get paid the same amount of money whether their advertising works or not. It’s high time agencies joined the rest of the service industry and became accountable for the work they produce. For instance, they could tie their compensation to performance. If their ads meet certain marketing goals they’re paid more money, if they don’t, they get paid less. Additionally, agencies should make all the creatives and all the account executives partners. That way, account and creative people’s income is directly tied to their clients’ success or failure. In an agency that ties its compensation to performance and all its employees are partners, creatives and AE’s suddenly find themselves working towards the same goals – producing great ads that get results.

by David Smith The Republik

Photo Credit: Unknown via Wikimedia Commons – Licensed public domain


4 Comments so far. Comments are closed.
  1. nathan,


    I appreciate your candid and accurate description of what I believe to be the number one issue facing agencies today [and perhaps the most misunderstood and least talked about outside of design magazines and blogs].

    Your proposed solutions for the delegation of responsibilities, compensation of Creatives/AE’s and the agency itself are spot on. Unfortunately, I don’t know that long established agencies with Baby Boomers in leadership will ever change their current business model. They seem to think that burn out is something normal for creatives and are willing to simply replace and restart the squeazing dry of another Creative’s soul until he or she burns out.

    I believe a major part of the problem is that many agencies are run by those who rose up through the AE ranks, and are concerned with one thing and one thing only, immediate profit. Your proposed solutions deal with long term profitability and employee sustainability, but how can one convince individuals seemingly focused soley on short term profitability of the greater benefits of long term profitability and employee sustainability?

    Perhaps my question is really about how do you go about pitching it to them, especially when you are a creative working in their agency.

  2. John,

    Linking payment to success sounds like an interesting way to align the motives of account services and creative. But success has always been difficult to measure in print and branding work. How would that work?

    Luckily analytics make success much easier to measure for interactive work.

  3. David Smith,


    Unfortunately, I have to agree with your assessment that most “established” agencies will never adopt a performance compensation model for paying their employees. Having worked at several of these well-known shops, I can personally attest the bean counters running them aren’t exactly open to change. As one of our managers said, “It’s like turning around the Titanic without a rudder.”

    You ask a great question and one I’m afraid I don’t have the answer to – having failed to convince the agency I was previously working for to embrace performance compensation. If your management team is reasonable and open to suggestions on how to better run the agency, you might start by gently enlightening them to some of the benefits of performance compensation:

    1. Reduction of turnover in the creative and account departments
    2. Increasing client profits becomes a common goal of both the creative and account departments (the more the client makes – the more the individuals working on that account make)
    3. Rallying behind a common goal of boosting client performance results in more integrated ideas and better solutions overall (better solutions attract more clients)
    4. Having an entire agency vested in making clients more profitable makes for happier, more loyal clients (the bean counters will like that)
    5. It actually allows the agency to be more profitable in the long and short run – instead of randomly increasing pay based on tenure or whatever – increased pay only comes from the bonuses doled out each quarter (or annually) based on the performance agreements with the agency’s clients – if the work doesn’t meet objectives, no one gets bonused
    6. Some in your agency won’t like this but performance compensation reduces the need for a lot of managers. Nobody needs to crack the whip on a group of employees empowered to make more money with their ideas.

    I could go on and on but my team will kick my butt if I spend anymore time on this blog instead of helping all of us make more money. Hope this helped and good luck. Please feel free to e-mail me with any additional questions.

  4. David Smith,

    Hi John:

    You’re absolutely right. It’s extremely difficult to track ROI on most traditional forms of advertising. So quit doing traditional advertising. Just kidding. And yes, interactive analytics has made ROI tracking much, much easier.

    The Republik’s performance compensation agreements are rarely tied to individual tactics. Depending upon a client’s objectives we’ve successfully tracked success (and yes, failure) in sales, awareness, consumer traffic, etc. directly to our advertising programs. Some necessary tactical things such as brochures, billboards and identity suites have no bearing (measurable, at least) on a client’s overall success or failure in the market. Therefore, we don’t attach a market performance objective to them. However, we have successfully attached goals to these types of projects which if achieved resulted in bonuses – quick turnaround, under budget production, positive feedback from dealers and sales people.

    It took us seven years to figure out how to make performance compensation work and we’re still making improvements.