Agency Compensation

This compilation of resources on scope of work includes best practices, ANA member case studies, and information on managing agency relationships.

This study underscores the phenomenal growth in digital marketing spending that has escalated over the last half of this decade as well as the growing role this discipline is playing in marketers’ overall marketing strategies for their brands.

Jennifer Marchant, senior director, marketing at Post Foods LLC, and Kathleen Gareiss and Robert Schwartz at Ogilvy & Mather Worldwide discussed what should a digital scope of work include and the best ways to negotiate it.

This research report draws on survey research conducted throughout 2009 and also highlights "hot" topics to marketers such as brand building, newer media, agency evaluations, marketing accountability, agency holding companies, global marketing, agency audits, and hourly rates.

Genentech has developed a comprehensive structured agency evaluation program from scratch using ANA best-practice concepts and shared its learnings on the program.

In order to better establish benchmarks on practices and perceptions related to agency performance evaluations, ANA conducted a member survey. The survey findings report on incidence/frequency, types of agencies evaluated, evaluation criteria, benefits, recent improvements/adjustments, specific best practices, and more.

Casey Jones, cofounder & CEO, Jones & Bonevac, discussed the need for marketers to improve the briefs they disseminate to their agencies of record.

This Research Report explores the incidence and best practices of agency evaluations and covers the following areas: frequency, evaluating multiple agencies/agency types, value of 360-degree evaluations (meaning the agency also evaluates the client), use of technology to facilitate evaluations, and more.

Industry experts discussed the results of an ANA survey on agency evaluations.

Industry experts discussed the results of an ANA survey on agency evaluations.

Digital agency compensation is generally two times higher than traditional agency compensation. The 4A's recently released the publication Understanding the Economics of Digital Compared to Traditional Advertising and Media Services to address this issue. Highlights from the publication were discussed by Mike Cordova, senior vice president, CFO, McCann Worldgroup, Asheta Shah, director, business management, McCann Worldgroup, and David Smith, CEO, Mediasmith, in this meeting.

Industry experts discussed a number of issues surrounding trends in digital agency compensation including agency engagement and the changing digital landscape.

Eric Jillard, department manager of digital marketing at Mercedes-Benz, and Andy Dutter, vice president of business development for Razorfish, shared their thoughts on best practices for driving efficiency in both the agency selection process and in the contractual/scope of work phase of client-agency engagement.

Industry experts discussed a range of issues regarding finance and procurement including cost containment strategies, agency incentive compensation, and behavioral targeting.

Representatives from Deutsch, MRM Worldwide, and R/GA discussed key issues facing digital media.

Eve Reiter and Sal Vitale at American Express discussed ways to continue evolving the role of agency relations and procurement and presented best practices for 2010 planning.

A panel of digital agency experts from Deutsch LA, Ignited, and MRM Worldwide discussed digital issues including client education, digital agency compensation, the RFP process, Twitter, and digital agency evaluations.

Rich DelCore, Finance Director, Global Marketer, P&G, led a discussion about P&G’s new agency compensation model—the Brand Agency Leader (BAL).

Sarah Armstrong, Director of Worldwide Media & Communications Operations at the Coca-Cola Company, shared the principles behind TCCC’s transition to value-based agency compensation.

This article explains the importance of a well structured contract and provides guidelines on how advertisers and agencies can collaborate to write one.

Members of the Agency Relations Committee describe the role that direct multipliers play in their agencies’ compensation.

Steve Farella, President, CEO, TargetCast TCM, Inc., and Phillip Sloan, SVP, Director of Digital Marketing, TargetCast TCM, Inc., shared their agency perspective on how digital media costs can be lowered.

The Grossman Grid, developed by Neal Grossman, Chief Operating Officer of TBWA\Chiat\Day - Los Angeles, provides a tool to facilitate discussion between advertisers and agencies on the method of compensation best suited for mutual business needs.

The Grossman Grid, developed by Neal Grossman, Chief Operating Officer of TBWA\Chiat\Day, Los Angeles, provides a tool to facilitate discussion between advertisers and agencies on the method of compensation best suited for mutual business needs.

This article presents the findings of ANA research that reports on the type of compensation arrangements used by marketers to pay their agencies.

Team Detroit was created after the holding company WPP acquired many of the agencies that worked with Ford. Sue Markowicz from Ford and Bob Mueller of Team Detroit discussed best practices in managing multiple agencies.

Representatives from Ernst & Young discussed media agency audits and the importance of audits in a dynamic media landscape.

Three experts—Robert Cauley of Beekman Associates, Neal Grossman of TBWA/Chiat/Day Los Angeles, and Penny Wong of PepsiCo Inc.—discussed how to determine agency compensation and touch on issues including salary definitions, management fees and finding alignment between advertisers and agencies.

Members of the Advertising and Financial Management Committee share how they track and verify agency hours, using a compensation formula of Direct Salary + Overhead + Mark-up.

An open discussion on compensation to digital agencies featured macro findings from the ANA Interactive Agency Compensation Survey and challenges and concerns that members have.