We know this is a hot topic and we know that as procurement people get more and more involved it will only get hotter. What's a guy who's experience is squeezing the price on the three widget makers going to do when they throw ad agencies at him as a contract he needs to negotiate? One guess. He's going to squeeze. You guys ever hear the story of the scorpion and the frog. Well lets not expect scorpions to change lets try to work with the way they are... Just our opinion.
Last month, Ron Berger, outgoing chairman of the 4As gave an inspiring speech on what would make the advertising industry better. It was really terrific. He did make one comment about compensation that we challenge. Ron said that he thinks the ad industry would be better if the agencies that made great campaigns got paid a piece of the action (poorly quoted, but you get the point). That would be great Ron, but let us ask you....would you be willing to pull a few million out of the coffers to help offset the losses on all the bad advertising that is done? If you think it's fair to get a piece of the good stuff it's only fair that you're willing to underwrite the bad. Just one blogs opinion.
In the end, the only logical way to address this is...cost plus pricing with a bonus for really "effective work". The days of 10% or 15% off the top are gone. Good, it incentivized bad behavior and decisions. Lets get over this debate and move on. Lets not forget one other incentive for an agency doing great work. They get to keep the account another year.