Posts Tagged ‘compensation’

Agencies want better briefs

A survey among 250 senior executives among top agencies in the US revealed what most complain about universally. We need better briefs.

Some highlights here:

  • Agency executives reported that at least 30% of their staffs’ time is ineffective or wasted due to poor communication from their clients.
  • Client briefs were ranked poorest when it came to providing competitive information and describing how a client’s offering ranked in the competitive landscape.
  • 75% of respondents reported that client briefs go through an average of up to five significant revisions after a project has begun
  • Agency heads also said that ideally fewer than three client decision makers should provide an agency with direction during the course of a project, compared with a current average of more than five.

Full article here

And all this rework takes up significant man hours. Which in turn costs money.

Not new news, but unless agencies can find a way to help their clients the issue of ‘we need better briefs’ will continue to be a global moan.

I wonder how much the current compensation system has to do with this. When clients pay by the hour for work defined by a scope there is far more clock watching that goes on than the old commission system.

I think an outcome based compensation system than an output one or even a process based one is far more beneficial for all concerned.

Getting to a common definition of success is probably the starting point of  any such discussion. And that requires many mind sets to change and redrafting the relationship.

What success looks like to a client is often very different to that of the agency.

Many minds far brighter than mine have been/are engaged in trying to solve this vexing challenge. There is a lot of good thinking taking place in silos of clients or agencies or even geographies.

Maybe there needs to be a proper global conference, maybe at Cannes, that discusses Creativity and Compensation.


Agency Compensation

There’s been, always been, a lot of discussion around agency compensation systems.

Many clients have been pushing agencies to look at a value based compensation system.

This article in Advertising Age talks about this from the POV of the client procurement department.

Pay for performance

Paying agencies for performance is an oft discussed subject.

On the one hand is the agency that says they don’t control the outcome, ie clients don’t buy what they recommend, and the performance in the market is a function of many factors beyond creative.

On the other side is the client who thinks agencies have no stake in the performance of their recommendations.

So you see clients pushing for a model that involves compensating agencies for the performance of their communications. The latest to join the bandwagon is Coke.

P&G started this discussion last year.

I understand the agency predicament..mostly because I work in an agency, and have been subject to vagaries of client moods wrt approval or otherwise of work.

Unlike lawyers and doctors and other deliverers of Professional Service, the overwhelming feeling is that anyone can do advertising and everyone has a point of view on it. So decisions on what to approve or otherwise is left to the senior most person in the room, or the loudest or that ever suspicious thing called research.

I think clients always have a suspicion that agencies are here to pull a fast one over their eyes. And all those rush for awards is not helping matters at all.

I think it is time for agencies to think about ways to judge their performance beyond awards. Something that clients believe in.

Other service firms are judged by success which is objective and measurable. Cases won, successful operations etc.

Agencies typically have two measures. Awards and size. We need something else.

When clients believe that agencies are working to the same goal as themselves this pressure to show loyalty..which is what ‘pay for performance’ in many ways is, will recede.

In the meantime what I urge clients to consider is this

All agencies know that if their strategy does not work a client can walk out the door and there’s nothing that an agency can do about it. So that ensures that everything the agency does is geared towards a client’s success.

So in a sense it is a negative option.

Till agencies think of metrics that clients believe in, this move from clients will gain momentum.


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