• Ad Age, Thursday, October 14, 2010 11:57 PM

For the first time, the 4As is taking a stance on how agencies should be thinking and talking about compensation in a 13-page position paper. The 4As is looking to generate support broadly across the industry for transforming agency compensation methodology from a price-based to value-based approach based on four key principles. They are: * Increased involvement from agency management in transforming pricing discussions with clients; focusing not on costs and fees but on scope of business benefits; agencies should consistently negotiate appropriate arrangements with clients and adhere to internal standards; and do not segregate agency finance and client procurement in negotiations as it may decouple the value the agency's services from scope of work and level of remuneration.

The document further lays out the types of information an agency could include within a comprehensive compensation and contract principles policy -- delving for some time into what performance-based compensation plans could look like and guidelines for protecting intellectual property.

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