• by Sean Hargrave , Staff Writer, April 4, 2014

How should agencies be recompensed? What are they accountable for? They are the huge questions at the back of everyone's mind, but are rarely brought out in the open because there isn't really a neat solution. Usually there is a combination of retainers with additional billable hours or a percentage of spend with the chance of a bonus if a target is exceeded. 

So, William Hill's CMO, Kristof Fahy, raised a very interesting point by throwing the proverbial cat among the pigeons and suggesting that agencies should stop trying to be liked and instead deliver on the metrics he is bonused on. He also made some other revealing points about agencies rarely living the brand. If he asks the suits before him about betting, they have rarely used his service and only bet once a year on the Grand National like everyone else. When his displeasure is clear, a guy is plucked from nowhere to sound clever about horse racing before disappearing back in to the art department, never to be seen near his account again.

The latter is a very apt observation and raises the Don Draper point in "Mad Men" that if you represent a brand you have to live it. Note to self -- this is a good point to raise next time an Ann Summers representative is on a conference panel.

On the accountability point, however, the logic is more flawed. Agencies, brands and publishers have long since had this debate in digital, and the fact that we have a mix of CPM, CPC and CPA shows there is no easy answer.

Aligning your performance with the bonus structure, or the strategy, of a client seems to make sense. But is it fair? The CPM metric remains today for the very credible reason that a publisher doesn't want to take on the CPC risk of how good an agency's creative is, nor does it want to expose itself, through CPA, to there being no customers to acquire because the end product is no good. Why on earth would a publisher take all the risk with virtually none of the reward?

Agencies are in a similar position. They are not responsible for how well a client's competitors are doing, which impacts market share, nor are they responsible for the final product or service delivery. To hold agencies to task for crucial elements of a brand's success which they have no input on is simply unfair and unworkable. 

Nobody reading this will have avoided the position of a client not knowing what they want but expecting an agency to deliver it. Similarly, everyone has been in the position of being blamed for delivering exactly what was asked but then being held accountable for a lack of success attributable to the client asking for the wrong thing originally. Nine times out of ten, said client was almost certainly offered sage advice but wrote off input as an agency trying to be difficult.

So here's the thing. All an advertising or marketing agency can do is offer their expertise and deliver what the client asks for -- and then be responsible for the results of its campaigns. Holding them to account for the KPIs in a marketer's bonus package is clearly unreasonable, even though it is a wonderful point of debate to bring up.

Clients, you see, are like kings. When things are going well, their advisers are heaped with rewards and praise. When they go wrong, those advisers find that doing the monarch's bidding means they fall into the trap that if the king is never wrong -- it has to be you. Today people are put up for repitches -- back then it was a one-way trip to the scaffold.