Outcomes-Based Compensation Is The Future, But What Is It Exactly?

MediaSense is out with a new study on agency compensation that finds that most agency leaders polled in a survey (85%) believe that outcomes-based remuneration will increase in the near term and is the preferred form of compensation in the long term. 

But there are stumbling blocks to shifting to an OBR model (full-time equivalent models still predominate) not the least of which is defining exactly what OBR is. Other sticking points include attribution, data access, procurement, and trust, according to the study.  

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Most of those polled in the MediaSense survey said they associate OBR with strong client-agency relationships. And around three-quarters also believe that AI will accelerate the shift to OBR. 

The report notes a “definition gap” for OBR. “There is no consistent industry definition of OBR. In practice, most deployments of the concept are hybrid models with a performance component as opposed to pure outcome models. Terminology often involves overlaps with performance bonuses, output-based models, and traditional hybrid structures, highlighting the importance of aligning on a shared definition before discussing implementation.” 

While few agencies have embraced pure OBR models today, “the industry appears ready for a shift,” the report states. “The rapid rise of AI and automation is threatening to significantly reduce the hours required to plan, set up, and optimize media campaigns, creating an existential challenge to the traditional labor-based FTE model.” 

The report also offers a case study (creative and media agency TubeScience) and takes a deeper look at some of the barriers to OBR.  

The release of the study is timed to the Cannes ad festival where a panel session is set to discuss the report on Tuesday. Hosted by Meta, participants include Meta’s Crystal Worthem and Nick Baughan, L’Oreal’s Gayle Noah, Philip Buerger, Co-founder/President, TubeScience, agency consultant and author Michael Farmer and Ryan Kangisser, Chief Strategy Officer at Mediasense. 

 

1 comment about "Outcomes-Based Compensation Is The Future, But What Is It Exactly?".
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  1. Ed Papazian from Media Dynamics Inc, June 22, 2026 at 11:06 a.m.

    All sorts of questions remain. For example, aside from defining "outcome" fairly and attributing it to the agency's work, what happens if a brand uses a "creative" agency from one holding company--or an independent--plus a media planning/buying shop owned by another agency holding company. How do you negotiate the fees for both functions and how do you coordinate their actuvities as well as determine their respective contributions to the"outcome"?Or does it only apply when both functions are performed by the same agency holding company or a "full service" agency?

    Also, what happens if a creative agency is being judged by an outcome that ties in directly to its work--like ad awareness---not factors outside of the agency's control---like sales, which can be affected by product quality, distribution, pricing, etc.? Even then, bad media buying might diminish the effectiveness of the agency's work--again without it being to control the media function.

    At the end, the push for "outcomes" in both creative and media buying/selling is doomed because the party promising the outcome does not have control over most of the variables at play. Carry the push for outcomes to it's logical end and why shouldn't the advertiser guaranee the media seller a profit on his time or space sale? Sorry. That, too, won't work/

    Advertisers, agencies and media sellers should do their jobs --but not everybody elses jobs as well. 

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