TRENDSETTERS: Is the Big Idea Everything You Paid For? Asks Darren Woolley

"Marketers and their agencies talk regularly about the 'big idea,' says Australia-based Darren Woolley, Founder of TrinityP3, an independent marketing and strategic management consulting company that works across Asia-Pacific. "It's nothing short of the idea that will transform the business, lead to substantial increases in brand equity and drive revenue and sales."

However, during a recent trip to the US and Europe, he stopped to ponder: "What is the cost of this 'big idea,' and do marketers get the value they pay for?"

According to Woolley, the Big Idea is one of the smallest marketing expenses.

While analyzing the compensation models and spending data of a range of multinational marketers and isolating the component that generates the "big idea," TrinityP3 found that for creative agencies, this represented about 7% of the total agency spend including production.

However, "If you consider the total advertising and promotion budget," says Woolley, "it fell to less than 1%. Less than one cent in every dollar spent on advertising and promotion went to the 'Big Idea.' Not really so big. Albert Einstein defined Genius as '1% inspiration, 99% perspiration;' marketers seem happy to pay for the perspiration, but only at the lowest possible hourly rate."

He recognizes that most of an advertiser's spend is not for ideas but for hard costs like media or implementation that includes account management, production, administration -- all the tasks that consume hours of resources. "You pay more for 12 people sitting in a room reviewing the work in progress than the one or two people that will actually create the ideas that make the work in progress worthwhile." He believes this is the flaw in current compensation models which reward doing, head hours, resources, but not thinking or idea generating.

Woolley often wonders why agencies don’t put greater value on their Intellectual Property. He says, "No other creative commercial pursuit does this. You do not see authors, film producers, composers and the like giving away the IP for an hourly rate."

So why is this an issue for marketers and advertisers? After all, if the agencies are willing to provide their ideas and IP for next to nothing that is a bonus, right?

In the short term-- yes.

“But,” says Darren Woolley, “ we are already seeing this is not sustainable in the longer-term. Creative talent is becoming increasingly harder to attract and keep. The relationships between marketers and agencies and between agencies working with the same marketer are becoming increasingly difficult to manage as each competes for a bigger slice of the same budget pie.

If you are currently paying 1% of your budget for the big idea, what would be the impact of paying 2% on the basis that the idea generated delivers your marketing and business objectives, or 0% if it fails to delivers completely? And isn’t that a more accountable compensation model than simply squeezing the margins looking for the lowest possible cost?”