Recently, our CEO Stu spoke at Future of Media Manchester with a session titled ‘Redefining Value’. His subject was a question our industry has been surprisingly bad at answering: how do you prove what marketing is worth? 

In case you couldn’t make it, here’s his run down of the session. 

If you've ever watched someone from Finance open a spreadsheet and ask, 'So... what can we cut?', you'll know marketing has a value problem. The value is usually there. It's just been reported in impressions and hours to a board that wanted to hear about sales and customers. 

The CFO asking what the last £10 million bought isn't the villain here. Marketing should be asking that question before the CFO does. If it can show it drives incremental growth, it earns the right to be treated as an investment, and investments are much harder to cut. The catch is that they also get judged on what they return.

Imagine you own a restaurant. You hire a chef and give him £100,000. The kitchen is spotless, everything arrives on time and the plates are beautiful. At the end of the year you've lost £200,000, and when you raise it, he says, 'Yes, but did you see the presentation of the scallops?'...  

Our industry has had a tendency to behave like that chef for years. Agencies get paid for hours and impressions while the business waits to see growth, so when your CFO asks what the budget delivered, it's a fair question. Add AI to the mix, and time as a proxy for value loses all credibility.  

If a job that took 100 hours now takes ten, nobody thinks it's worth 90% less, so pricing by the hour starts to look shaky. 

This is where value-based pricing comes in.  

The agency takes a base fee and shares in the value it creates when agreed outcomes are hit, which changes the questions it asks. Hand an agency £5 million and its first question becomes why £5 million, and sometimes whether to spend it at all. 

It asks something of both sides. Agencies should be measured on what they can genuinely influence and given the data and access to do it. You can't hold anyone accountable for a decision they aren't allowed to make. 

So the next time an agency tells you what something will cost, ask what it will be worth. The ones worth their salt (or scallops) will have an answer.