Sergio Franco, Chief Creative Officer of Fahrenheit DDB, has helped since his appointment in 2016 to strengthen the creative and commercial area of the most important agency in Peru, especially in the digital and retail divisions. We were able to talk with him about the complexities of the industry, the value of ideas, how to recognize what works when negotiating fees with clients, and how to have an agency with creatives in an excellent working environment.
Change the work culture of the advertising industry
“If it was 7 o’clock at night and you were leaving, you were a bad creative,” says Sergio about the bad traditions within the advertising world. In Fahrenheit DDB this does not happen, it is a company with a distinct care for its creatives, and with an outstanding excellence of work in Peru, being one of the best agencies in the country, with a huge amount of Golden Lions to support this belief.
Why is DDB considered the best agency to work for in Peru? This is the crux of the matter, the creative elaborates: It is common to hear that there are informal workers within this industry, and this becomes an argument to charge below the value for a job done. In addition to diminishing the main shaft of the world of creativity, said by Sergio: “The value of the industry is the ideas but the industry does not value the ideas”, nor those who work on them, we could add.
It is a very informal industry, says the creative, from the motives for selling an idea to the reasoning behind the price of the service. It is in this place where many agencies in the Latin American area are located, adding the economic problems of the pandemic, wrong paradigms are generated that can worsen the situation of the industry. Sergio highlights the importance of a system such as COR, which allows the agency to learn and clarify its processes, and provides it with the tools to show its work to the client.
The perfect team for negotiations
“COR is helping us to give visibility of our work to the client, it helps us to outline the work and make the case to the client. It helps us to say why we charge what we charge,” begins the creative. It is necessary to be able to outline and professionalize the tasks on which the work of the teams depends. In this way, we can avoid the field of pure subjectivity, and not depend on the client’s infatuation with this or that idea to pay what is necessary. The day this infatuation passes, will he lower his fees, will he look for an agency that charges below the average?
“We have to help the Marketing Managers of the brands to argue why they should work with us,” Sergio explains. The information from which the prices of the services come out comes from the process schematized within the agency, and it is information that each link in the chain requires. From the creative and the PM, to the client’s representative who has to ask his superior for the advertising budget.
“We have to take charge of restoring the industry’s reputation,” he adds. This implies a turnaround, at the level of talent and HR care, adding a marked ability to order processes that begin an era of formalization in the industry. Consultancies and innovation laboratories also enter the field, which seems a much more attractive proposal within their orderly proposals, even though they make water in the field of advertising and effective marketing. The ideas, up to now, are still in the advertising agencies. The creative adds: “Clients know that they win by force of guideline; and that if we don’t do it, another agency will.” Advertisers who go to technology companies, social networks or in-house sectors of large corporations, find that there is no creative culture and they don’t know how to manage ideas. There is no culture of that, they have order, but no ideas.
When it comes to having an excellent relationship with the client, the creative highlights his great work team. Within Fahrenheit, Sergio explains: “We have taken care of recruiting the best and paying what they cost. This has led to the fact that little by little the best accounts are in the agency. The good working environment can be seen in their excellent relationships with their clients. Sergio is dedicated every year to bringing in fresh, junior talent. While they provide many opportunities to their employees, they also demand a level of excellence and responsibility.
When it comes to improving the relationship with their clients, the creative highlights the importance of being able to demonstrate the agency’s background, how they have worked historically, it is a great added value to the overall image of the company. On the other hand, when sitting down to discuss projects and fees with clients, it is key to be able to show the processes in a clear and transparent way. Sergio says “The relationship with clients can become hell, but if it is orderly it is a romance”. For him the main weapons when negotiating are:
– To be able to show who you are, and what you have done.
– Who is leading the organization.
– To be able to demonstrate that there is a process that is being followed.
The written process
The latter stands out for achieving a calmness in the client, a tranquility in knowing how their money will be used, the creative continues: “The processes generate value, facilitating the relationship with the clients”. When it comes to investing in advertising, it is a great ally for the agency, the client, and the advertising industry as a whole. Bringing reputation back to the industry; that’s the goal. Ideally in the future it would be possible to choose, for example, the clients instead of them choosing you.
At this point he mentions the value that COR has had, the clarity that the software has brought to his processes and fees, it was a great help when managing a bid with a very important account. Sergio adds: “COR helps to professionalize my work and that the client can see why they are charged what they are charged. It allows us to get out of that subjectivity. It has become a plus point in their commercial proposal. This is replicated in other Latin American agencies with outstanding accounts, such as UBER, Banco Itaú, General Motors.
Reworks are the vortex where uncharged hours are lost, time that could be used in new projects and client security in the agency. It is in this place where the common dilemma of the charging methodology opens up: whether to charge per idea approved or per idea presented. “Today the fairest thing to do is to charge for work time” Sergio contributes to the debate. For this it is necessary to return to the previous point, and to be extremely careful with the transparency of the processes, for which it is a requirement to have the data of the hours of work for each service offered, to be able to estimate and charge with coherence.
This becomes part of the agency’s culture, as it can be an effort to adapt to a new management and organizational style for the creatives. The software used for this task, then, must be user-friendly, and minimize the effort involved. That is to say, at this moment they are choosing to sell employee hours and not a fee for the service provided. This is contradictory, since it is something that detracts from the idea, but it is the best way of charging that has been found. Is it a way towards a new charging method? In principle it is necessary to reach the state in which it is possible to charge for what has been worked, with the real cost of the value of the services provided.