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ANA: Few Agencies Compensated Based On The Value They Add

  • Ad Age, Monday, May 3, 2010 10:44 AM
Surprisingly, few marketers have followed the lead of Coca-Cola and Procter & Gamble in compensating agencies based on the value they add to projects rather than the time they spend on them, according to a survey by the Association of National Advertisers. Jeremy Mullman reports that value-based fees account for less than 1% of pay agreements.

"This is one of those times when there's a lot of talk and very little progress," says Mike Lescarbeau, CEO at Interpublic's Carmichael Lynch. "It's difficult to have it be a shared risk."

Fee-based models hit 75% this year, up from 63% when the survey was last conducted in 2006. The "15% commissions" model declined to 3% from 16% during the same period.

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