How do you price an idea?

Things have evolved much in the history of ideas. Nowadays all you need is a great idea for a smart phone app and you could become an overnight millionaire.

Ideas are the stuff of life; we all have hundreds every day - some average, some awful and some awesome. In the field of marketing, we are in the business of ideas. We spend our days thinking for our clients. We brainstorm ideas about their products and services, and we think on behalf of the consumer, what they want or need to know.

But an idea can be a rather slippery commodity...

Most of us would have experienced that one potential client who asks us for our ideas and then asks us to refine them and then asks us exactly how we would go about implementing a particular campaign, only to eventually not sign us on

It's like a kick where it hurts to then see that non-client going live with concepts and ideas which are extremely similar to what you've suggested. Been there? We have and frankly, it sucks.

Currently, there is nothing to prevent a client from briefing numerous agencies - each of whom will put in many hours of time and brain power to prepare an exceptional campaign, (the current strained economic client doesn't help - agencies have the delicate balance of not really being able to waste resources while being equally unable to pass up potential opportunities).

But of a hypothetical three agencies, two of those would have simply wasted their time and resources. Many clients do not offer rejection fees and agencies are simply not in a position to demand them.

Concepts worth cash

Perhaps it's scenarios like this which have resulted in the growing trend toward concept fees - large agencies charging substantial amounts for a concept alone - no implementation at all. Is this a scandalous rip off? Or is it fair enough?

This also creates a quandary for smaller agencies - charge large and be taken seriously, or charge what you deem to be fair and be considered a Mickey Mouse operation with inferior concepts.

There is nothing in place to protect the agency from having ideas (or at least time) stolen, but there is also nothing in place to ensure that clients are charged fairly. Sometimes the alignment between what agencies and clients consider to be fair is way out. So both client and agency stand the risk of feeling unhappy or even abused and the industry at large stands to suffer if something isn't put in place.

How much is too much?

What is the cost of being costly? The past year has seen large brands pulling their work in-house to avoid exorbitant fees. Without some regulation, and with seemingly limitless costs, should we not expect to see other big players following suit?

The Advertising Standards Authority has no pricing guidelines for the industry, with nothing to protect an agency from having its ideas being used without compensation and nothing to ensure that clients are charged fairly.

Corporations (and marketing companies) need to do a stock take of their idea supply. Ideas are plentiful. But good, effective and meaningful ideas are hard to come by, and when they do, they are worth their weight in gold, no matter who's touting them.

I'd love to hear from others in this industry - how do you price an idea?