Agency Compensation : Value-based agency compensation

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.

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.

John Adams, Chairman and CEO of The Martin Group dicusses topics related to client/agency relations including compensation agreements scope of work agreements that lead to better work.

Deb Giampoli, Kraft's cross-functional agency team leader, discusses how Kraft evolved its agency compensation model from one focused on media commission to a unique hybrid of input- and output-based fees and had one primary objective in mind: financial transparency, more closely matching agency compensation to the work.

In this presentation, Jones Lundin Beals President and CEO Dave Beals explores challenges that must be addressed for value-based compensation--an approach in which the agency fee is established based on the value, not the cost, of the services and work provided by the agency.

In 2007, the ANA fielded its triennial survey of the trends in agency compensation. Dave Beals, President and CEO of Jones Lundin Beals, shared the survey’s extensive results, covering methods of agency compensation, performance incentives, and the role of procurement in negotiating agency compensation.

This article discusses an exclusive ANA survey that explores value-based client-agency relationships.

See the results of parallel surveys conducted by The American Association of Advertising Agencies and Association of National Advertisers in the spring of 2007. The survey was designed to assess agency and client attitudes and activities in four areas: 1. How agencies add value to the client's business; 2. How advertisers add value to the agency-client relationship; 3. Degree of interest in value-based compensation; & 4. Possible barriers to changing compensation methodology from cost based arrangements to value-oriented methods.

View the results of an interactive agency compensation survey exploring challenges related to the management of interactive agency compensation.

This case study describes how the social networking site Couplets.com found success by setting up a value-based compensation agreement with Sugartown Creative.