ANA Interactive Agency Compensation Survey

July 30, 2008

SURVEY OBJECTIVES

DEFINE CURRENT AGENCY BEST

PRACTICES IN THE STILL-EVOLVING

ARENA OF INTERACTIVE MARKETING

  • Online Advertising Expenditures
  • Agency Engagement/Utilization
  • Favored Compensation Methods
  • Current Compensation Rates
  • Use of Incentives
  • Compensation Agreements

REFERENCE DATA

ANA "TRENDS" SURVEY FRANCHISE

  • 2001 "Website Management & Internet
  • Advertising Trends" Survey
  • Triennial "Trends in Agency Compensation" Surveys
  • 2005 "Interactive Agency Compensation" Survey

METHODOLOGY NOTE

  • Survey question format changes in 2007
  • Enabled respondents to more easily address multiple agency relationships in responses
  • Impacts ability to report trends in some areas
  • Improvements to quality of responses

SUMMARY FINDINGS

  • No end in sight for online spending increases
  • Majority of companies still spending <$20MM
  • Online comp practices continue to mirror general agency world; fees dominate (69%)
  • Many using combination of comp methods
  • Commissions in play for some specialized/new services
  • "Value-based" compensation still lacks gravitas
  • "Best-of-Breed" agency assignments dominate (50%)
  • 83% all agency assignments are full service
  • Companies dominantly awarding "specialized"/new digital assignments to outside agencies (70%+)
  • Some indication of agency consolidation
  • Boost for project fees (42%) versus retainers/ combos
  • Agency compensation ranges from 5%-20% of online ad budget; higher than general agency world
  • Average Hourly rates for online agency service still ranging from $101-$180
  • Average reported agency profit still 9%-17%; but most companies don't know or choose not to ask for agency profit
  • Less than 20% online ad assignments currently include incentive compensation
  • Adding incentives is the number one reason for potential online agency contract changes in the next year
Source

"ANA Interactive Agency Compensation Survey 2007." Mary Conrad, Jones Lundin Beals. ANA, July 2007.