Rights management usually comes into play is in the context of identity work, and this is why logos are priced the way they are. It’s understood that the clients will need the rights to the mark you create so that they can trademark it and use it on unlimited applications, so when pricing for a logo you should take that into account. In addition to a fair hourly rate, clients pay for the rights to use that logo in an unlimited capacity.
Aside from giving away all the rights to your work for an additional (hopefully ginormous) fee, you can give them away for limited periods of time or for limited applications by licensing work to clients. There are fewer ways to do this as a graphic designer, but licensing is an incredibly (incredibly!) important part of being an illustrator or letterer. Of the couple hundred client projects I’ve done over the past few years, very few of them have required a full buyout of all rights, and the ones that have required them paid my rent for the better part of a year. Here are some factors that go into pricing a job based on licensing:
- How long does the client want to license the artwork for? One month? One year? Two years? Five years? In perpetuity?
- In what context is the artwork going to be used? Do they have the rights to use it on anything? In print only? Web only? Broadcast? Tattooed on their faces?
- If the job is reprinted, will there be an additional fee for a reprint?
- Do they want an unlimited license or do they need to own the rights?
- Are these rights transferrable if the company is sold?
- What kind of company is it? Is it for a Mom-and-Pop business, a multi-billion dollar corporation or something in between?
This is some complicated stuff, right? Maybe, but this is how you can actually make a living doing illustration and design and maybe even eventually quit your but-they-give-me-health-insurance barista job. What follows is a fictional pricing example to show how powerful licensing can be. I’m going to write it in the context of lettering, which is priced essentially the same as illustration. Graphic designers should still pay attention though, because when I talk about buyout pricing, that’s essentially what you’re going to be thinking about when pricing logos. My price points will be higher than what a fresh-faced n00b can probably charge, but should at least illustrate how much of an impact licensing can have on the cost of artwork.
3. The Correspondence
Dear Ms. Hische,
I’m an art director at Awesome Agency Inc, working on a campaign for an international clothing brand (on par with The Gap) and am writing to gauge your interest in creating artwork for us. We need one five-word phrase illustrated in a script style. The artwork should be highly illustrative, attached are some examples of work you and others have done that are in the ballpark of what we want for the campaign. If this sounds appealing to you, please send us a quote by end of day tomorrow so that we can present your work, along with a few others we are gathering quotes from, to the client. Thanks so much and look forward to working with you!
They didn’t give me much to go on here aside from the actual work I’m creating. It sounds like a cool job, but I’m going to need to do some investigating before giving a proper quote. The biggest young designer mistake here would be to quote a flat fee without finding out what kind of usage rights they want.
Thanks so much for thinking of me Arthur! I’ll put together a quote this afternoon. Do you want me to price for every usage scenario or do you have some specific uses in mind?
All the best,
Usually here they’d write back with some very, very specific uses in mind, which makes it a bit easier to quote, but sometimes you’ll get a letter that looks something like this:
Great to hear back from you! We’re still in the exploratory stages of the project, so we can’t give specific usage situations yet. Please quote for creation of artwork for presentation only and for a few ballpark usages.
4. What We Know
- This is for a big international clothing company.
- They are gathering prices from a few different people. They’ll present several artists to the client, who will chose based on style or lowest price depending on what the client’s priority is.
- They want a price for presentation only. This means you create the artwork and they only have the right to show it around in-house and to the client, NOT to use it in any way for their campaign.
- They want a number of usage scenarios.This is on top of that initial creation / presentation fee.
5. Pricing for Presentation
If you’ve done any editorial illustration work (magazines and newspapers), you know that the rates are pretty standard across the board: $250 to $500 for a spot illustration, $500 to $750 for a half page, $1,000 to $1,500 for a full page, $2,000 to $3,000 for a full spread, $1,500 to $3,500 for a cover. These are all pretty normal prices and there are of course magazines that pay higher or lower. I tend to start with these prices in mind when thinking about pricing for “Presentation Only.”
They want a five-word phrase that is highly illustrative, which equates to “a full page illustration” or so. Because this is for advertising and not editorial, adjust your rates depending on the client. This is for a big company, so my presentation-only fee might be somewhere around the $5,000 to $7,000 mark depending on how complicated what they’re after actually is. If this were for a smaller company, the presentation-only fee might be closer to $2,500 or $3,500.
“Why doesn’t anyone ever talk about pricing?”
6. Sample Usage Scenarios
If a client doesn’t tell you specifically what usage rights they need, you should make sure there is a good range represented. In this situation, I’m definitely going to price based on the length of time they need it, plus some general examples of what context the artwork will be used in. When you send your quote, it should be broken down as clearly as possible so there is no confusion as to what the clients are paying for in each stage of rights licensing. This would be the quote I would send back:
Below are a few sample quotes for the project. As I did not have much info about what usage rights you needed, we would need to talk specifically about anything not mentioned below once the client has a clearer picture of what they need.
Presentation Only: $7,000
Two to three initial pencil sketches shown, one chosen to be created as final art. After final artwork is presented, the client may request up to two rounds of minor revision. Additional revisions after this point will be billed at $250/hour. If the client chooses to not move forward after pencils are presented, a kill fee of $3,500 will be paid for completion of sketches. If artwork is completed to final, the full fee will be paid.
Usage Scenario 1: +$5,000
The client may use the artwork in magazine and newspaper ads (domestic and international) for a period of one year.
Usage Scenario 2: +$7,500
The client may use the artwork in all print media (domestic and international) including but not limited to magazines, newspapers, point-of-purchase displays, posters, and billboards for a period of one year.
Usage Scenario 3: +$10,000
The client may use the artwork in all print and online media for a period of one year.
Usage Scenario 4: +$14,000
The client may use the artwork in all print media, all online media, and broadcast media for a period of one year.
The client may use the artwork in all media including print, online, and broadcast in perpetuity.
Thanks so much for thinking of me for the project, let me know how these numbers go over and if you need any clarification about the different usage points.
All the best
So this is a pretty basic breakdown, but it gives the agency/client a lot of price points to consider. If I wanted to break it down even further, I would price based on two-year and five-year use and give different prices for U.S. only, North America only, etc. Most importantly, note that all of the usage scenarios are on top of our original presentation only / artwork creation price. The prices are not cumulative in this example quote, so each +$ is only added to the presentation fee. The top price in this scenario is $32,000. These prices might seem completely outrageous to you, but they’re actually pretty reasonable when we take into effect who the clients are and what kind of rights they’ll probably need. If you’re an up-and-comer, your prices might be a bit lower but the percentage markup should remain about the same. Imagine if we had priced this hourly!
If the clients say, ‘These numbers look great!’ it probably means your prices are too low.
7. How do you know if you priced right?
If the clients write back immediately and say, “These numbers look great! We’ll send along a contract for you to go over in a few days!” It probably means your prices are too low. If they write back and try to negotiate you down a little bit, you were probably pretty spot on, and if they write back and say that this is well beyond their budget, you get to decide whether or not you want to figure out a way to work within their budget or whether you want to walk away and take one for the team. When you’re offered a very low budget by a very huge client, you can always feel good about turning it down knowing that you are helping to raise the standards of pricing for others.
8. Why doesn’t anyone ever talk about pricing?
There are a lot of reasons why designers and illustrators are reluctant to talk about pricing, the most obvious being that no one wants to shout their annual income to the masses. Once you start giving away your general prices, it’s not incredibly difficult to add things up and figure out a ballpark of what an individual or company makes in a year. A personal note: don’t assume that the pricing structure above means that I’m swimming in a pile of money. My half-retired dentist father still makes more than I do. The fake job I used as an example above is an advertising job, and I used it as an example because pricing for advertising is one of the darkest arts of all. There are wild differences in pricing from presentation to buyout, and a ton of factors that affect the price. It’s great to surround yourself with friends or more experienced designers that can help you price a job. You can always consult The GAG’s Ethical Guide for Pricing, but definitely use it for ballparking more than definitive numbers.
9. The Pricing Domino Effect
It’s incredibly important for even young designers to always quote respectable prices. It can be very tempting to create artwork for a “cool” company for very little pay and the promise of insane exposure/ an incredible portfolio piece. Every successful designer and illustrator has at one point succumbed to the siren song of the “cool” industries (there are a few “cool” companies that don’t try to take advantage of designers but they are the exception and not the norm). When you are starting your career as a freelancer, it will be incredibly tempting to take on any work that comes along, no matter how unfairly companies are trying to compensate you. Remember that you are talented and that your talent has value and that ultimately it is up to you to determine how much people value your talent. By helping keep pricing standards high, you not only help yourself by avoiding the title of “The Poor Man’s Marian Bantjes” (essentially the creative equivalent of a knock-off handbag), you also help every other young designer struggling to get paid out there, and help every designer that came before you to continue making a living doing what they love.
This article was adapted from an essay titled The Dark Art of Pricing by Jessica Hische. Read the original here.