Advertising for Free
Deciding whether to do spec work.
One of the facts of agency life is that agencies usually do a certain amount of speculative (spec) work. As in free. Spec work happens when an agency answers a potential client’s RFP, to create work samples specifically for that business. Sometimes this request is made only of one agency, and sometimes it’s part of a pitch, with any number of other agencies competing for the same business.
There’s not a lot of businesses set up this way. A restaurant, for instance, would never make you a meal, to your specifications, for free, in the hopes that you would come back as a paying customer later, but that is what many advertising agencies do every day.
There’s a reason that spec work exists. Agencies used to make their money from media sales. Media had a steep mark-up, and that’s where the profits for an agency came from. The creative work was, in essence, given away for free in order to profit from the media.
There’s a long history of spec work in the agency world, so before deciding to do, or not do spec work, you have to understand your options and what that choice will mean for your agency. Here are your options:
Do Spec Work - If you’re OK doing spec work, then you’ll be open to all new business opportunities that come your way. What you’ll need to do is decide how much you’ll do and how much you’re willing to spend. Agencies often set aside a part of their operating budget specifically for new business expenses.
If you choose to do spec work you should decide what kind of spec work you won’t do. Maybe you’ll only pitch business where your agency has a true advantage over your competitors. Maybe you’ll only pitch business that falls under a certain cash outlay. Before saying yes to an RFP consider the total cost — unbillable hours, time away from paid clients, travel expenses, material costs, and outsourced expenses — because it really adds up.
Do Spec Work with Limits – Some pitches are nominally paid. Agencies get a flat fee for participating. The amount is usually small however, and rarely covers the total expense of creating and delivering the work. One thing to be careful of with paid participation: make sure that the fee doesn’t give ownership of the ideas or work to the client. Some businesses use this arrangement, playing one agency against the other, and then lets the cheapest agency produce the winning idea.
Another way to limit spec work is to establish if the work that wins you the business will become the client’s next campaign. If that’s the case, some of the pitch expenses will be recovered in your billings. If it’s not, you are depending on that unknown piece of new business to make up for the expenses in the long term.
Don’t Do Spec Work –
The agency that’s best suited to not do spec work is one with a strong, proven track record. Instead of creating new work for a prospective client, your agency can opt instead to present a case study of a campaign done for a similar client or product with similar marketing challenges. Or, you may choose to focus the potential client away from the work, and emphasize the importance of the client – agency relationship instead.
Add to the debate the professional organization called No! Spec, that urges service providers to stop the practice of spec work altogether. In their opinion, spec devalues the profession and makes getting paid fairly for all work done, harder for the whole industry. If you feel strongly about taking a stand and going against the industry’s accepted practice, then that’s what you should do. You may limit your potential to compete for certain jobs, but on the other hand you’ll also stand out as someone with integrity and confidence. It all depends on your comfort level because the choice ultimately, is yours.