Paying the agency: a better solution?

Tim Williams

This article argues that agency compensation is based on the wrong paradigm. The existing cost-based model rewards agencies on the basis of hours spent, and leads to excessive concern with recording and estimating time, since exceeding the time allowed for a project can wipe out profits.

Paying the agency: a better solution?

Tim Williams

Agency professionals are rightly concerned about whether they have the right set of business practices to guide them through today's cross-functional multi-channel marketing environment. This becomes an even more burning issue when applied to the question of how agencies get paid for what they do.

Now more than ever, agencies are struggling to keep their margins. A lot of agency managers believe that a big part of the problem is their firm's chronic tendency to exceed estimated hours on client relationships and assignments. As a result, agency organisations are feverishly trying to...

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