Creativity is an almost sacred concept in the world of advertising. Few industries depend so heavily on the value of their employees’ “heads.” It is no coincidence that creative directors are among the highest-paid in advertising agency structures. Spectacular campaigns bring attention and build the agency’s brand. However, one must not forget that advertising agencies are businesses that must generate profit. For management, the main challenge is that the uniqueness of projects does not always align with their profitability.
What is Creative Potential, and How Can It Be Measured?
An advertising agency services are only worth as much as a client is willing to pay for them. This mantra is repeated throughout the industry. While flexibility helps build business, it can also be deceptive. With numerous clients and projects, profitability often slips through the cracks. Typically, the client’s stature determines how many and which employees are assigned to their account, often at the expense of other clients. However, efficiency should never be overlooked. It may turn out that assigning the same staff to several smaller projects could generate significantly more revenue. Therefore, we propose equating creative potential primarily with employee capabilities and only secondarily with client stature. It should be measured in the most basic unit: money.
Where Does the Money Leak?
Given that clients are the main revenue source and employee salaries are the primary expense, every agency should ask two fundamental questions: Can we earn more from our clients? Can we use our employees’ potential more effectively? These questions may seem naive, but answering them fully requires identifying specific clients and projects that fail to yield satisfactory profits and pinpointing employees whose potential is being wasted.
When Humans Fall Short…
Many marketing firms were built and developed through their leaders’ intuition. However, intuition alone is insufficient in the long term. Monitoring every employee and project is beyond the capacity of one person. This is where IT systems come into play. A well-designed system reflects the company’s condition through readable tables, charts, and reports. Its role is to provide data that helps answer questions about the company’s true state and potential.
Good Client, Bad Client
An IT system allows for the tracking of every project. This lets managers quickly assess whether the burden of a project is justified by its profitability. If a project drags on, absorbs too many valuable employees, or lacks sufficient staff, the firm incurs measurable losses. By comparing profitability data across all projects, the system becomes a powerful tool for making strategic decisions. It reveals which market sectors and products bring the most profit and are worth developing, as well as those holding the firm back. In other words, like a good doctor, an IT system identifies what helps and harms the company, enabling effective remedies.
Leveraging Human Potential in advertising agency
The true strength of a advertising agency lies in the skills of its employees. Not only ideas matter, but also language skills, market knowledge, software proficiency, training, certifications, and other resources. Every sensible manager strives to maximize such resources. However, a new challenge arises: managing human potential so employees are satisfied and the company profits more from their contributions. Fortunately, IT systems once again come to the rescue, organizing the work of specialists. These systems enable planning and forecasting resource use, identifying skill gaps, and outlining training and recruitment policies. They help pinpoint which employees are key, overworked, or underutilized.
Polish companies are beginning to recognize the importance of this issue. Studies show that over 50% of the challenges related to improving profitability in Polish professional service firms involve resource management, both internal and external. In the coming years, effective management will focus on areas such as utilizing human resources, assigning the right people to projects, managing staff flow, and acquiring the necessary resources and competencies.
