The remuneration squeeze - better ways of setting fees to make agencies less vulnerable?
Suzanne Snowden
Agency revenues have suffered a double if not treble financial whammy recently - squeezed budgets, squeezed margins... and competition. This paper examines some of the uncomfortable implications, and rehearses the familiar alternatives to commission (fees, now becoming the norm, and success rewards). Fees may be best, but the ways these are currently calculated aren't very rational. Agencies would benefit from a different, better quantified and harder-nosed approach to fee negotiation.
To discuss the issues surrounding agency remuneration it is first essential to recall...