Is creativity a commodity?

I just had to respond to a commentary I read today in Advertising Age. Jonah Bloom was bemoaning the commoditization of ad agency creative work. The subhead screamed,

“The War on Margins Is Treating Ideas and Creativity Like Widgets That Can Be Standardized.”

Bloom is very worried about the long-term impact of agencies that are caving to client pressure to slash their margins in this recession. He wrote:

“Many of the major agency reviews, and almost every major media-agency review in the last six months, have centered on saving money. That's not surprising or unreasonable, but the way it's been achieved in some cases -- by demanding an insanely detailed breakdown of costs, then working on the assumption that costs can be standardized -- should scare the crap out of agencies. One senior ad exec said recently: ‘We're getting to the point where we're going to be told what our creative director's salary should be.’"

(For the full Ad Age commentary see: http://adage.com/columns/article?article_id=137450)

Here’s the post I'm sending to Bloom. In the long run, how many people do you think will want to work in advertising, pouring their hearts and lives into a creative profession, if the financial rewards are diminished to a level that no longer provides a reasonable incentive?

Many creatives will be driven to other interests and industries out of sheer necessity to support families and fulfill dreams. It's happening. Quality of creativity and effectiveness of ads will slip noticeably. Then the pendulum will swing as agencies and clients hunt for the genius and compete for the most seasoned experts they have driven away.

Discounted creativity has already ravaged broadcasting. Most local stations, both radio and TV, are on the verge of obsolescence, because they chased short-term profits with satellite dishes and hours of nationally-syndicated programming. Many lost their local identities as they yanked their investments in “hometown” personalities, programming and coverage. End result: we can dial up their programming on a national Web site. I don't need a local radio station to hear a national radio talk show. Short-term thinking has killed a lucrative local media business. That audience, with its appetite for local shows and voices has dwindled. When was the last time you tuned in to your local TV station to watch a paid, 30-minute info-mercial masquerading as programming? Bet you click right through most of them. I do. Local programming is a graveyard.

The same thing will happen to advertising, unless ad agencies set and maintain professional standards that include quality and compensation. The industry will sink into a cacophony of cheap, digital street hawkers, unless we stand up for the vision of strategy, the art of creativity and the science of market research and planning. It’s for our clients’ own good.

You don't tell your doctor what you'll pay him. Blue Cross and Medicare do, but then he sends you the balance of the bill -- unless you're indigent. So, why do ad agencies allow clients to run their businesses?

Does Coke, Chrysler, Apple, Macy’s, Nike, Sony or any other major advertiser provide consumers with an itemized list of costs for every ingredient, component or raw material? Or do they just give you a list of features or contents and a bottom line price? What's good for the goose is good for the brander.

How can agencies itemize their investment in professional development and innovation along with the blood, sweat and tears creative people pour into their work when they’re off the clock ― eating, showering, walking, playing with the kids, watching TV or scrambling to find a pen to scribble down an idea?

In advertising, it's one thing to brainstorm powerfully simple and amazingly cost-effective creative executions – that’s called ingenuity. Witness Apple’s “Mac vs. PC” campaign. How inexpensive was that set? It's another thing to practice professional prostitution and “give it away” just to keep the client. It takes real courage to tell an advertiser, "no, you can't lift the corporate veil and wrap your arms around my business unless you're willing to marry me for life ― first!"

In most cases, businesses can't thrift their way into long-term profitability. And when companies start to meddle too much in their suppliers' business, the results are usually not very good either. Consider what the American car industry accomplished by whip-sawing parts suppliers over price. How did that work out? Within several years they reaped a steady stream of warranty claims while market share continued to plummet. Two U.S. carmakers are now in bankruptcy and many suppliers have been bailed out. I wonder how it would have worked out if suppliers were rewarded for innovation and auto companies competed for the exclusive rights to license new technologies.

On the other hand, artists in the film industry have managed to maintain a strong financial model and creative rights because of professional guilds. Directors (DGA), writers (WGA), actors (SAG) and musicians (AFM), along with a few others crafts people, have secured a level of income that continues to lure genius to work in that industry for life ... often until they die. And they're happy to itemize day rates, at or above scale, to help you develop your budget. Absent professional standards and appropriate compensation, Hollywood would soon become Bollywood ... and every movie would be frugally formulaic -- ending with a canned song and dance number. Or features would be shot with camcorders and uploaded onto YouTube. “Blair Witch” anyone?

Bottom line: if corporations continue to squeeze ad agencies and other suppliers to drive down prices for their services, there will be a point where suppliers won’t be able to drive the advertisers' cars, sleep in their hotels, buy their insurance, wear their clothes or spill their booze. And wage deflation will trickle down and around to other consumers, who will also stop buying branded goods.

That is unless advertisers cut their prices and turn their hallowed brands into low-cost commodities.