Traditionally, advertising agencies have relied on three basic compensation models—a commission (on media spend) model, an hourly rate model, or a fixed fee for an agreed-upon scope of work model. We found these traditional models seldom produced the kind of value clients were looking for from their agency, so we changed the game.
Bottom line: Pay for performance isn’t a threat if your work generates the results clients are looking for.
Rather than being compensated strictly by ‘time on task,’ we decided we would earn our profit by consistently delivering bigger ideas, faster and more efficiently. These are the values that make us invaluable. Yes, clients clearly benefit, while old-school agencies resist this notion, arguing that their clients would never offer retail customers a performance-based sliding scale of satisfaction. What they fail to realize is that by mitigating client-side risk we can encourage more activity, more opportunity and more willingness to share the risk of creative innovation.
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