US food giant General Mills is now paying its advertising agencies based on how well they perform against sales goals.
Explains Doug Moore, the Minneapolis-headquartered company's vp of advertising and branding: "It's very pure. We will pay agencies more if we make the goals, and less if we don't make the goals." The new remuneration structure includes a guaranteed agency pay base and a "generous" ceiling for bonus compensation.
The arrangement, which came into effect at the beginning of June, casts the New York office of Saatchi & Saatchi and Campbell Mithun in Minneapolis in the roles of "brand navigators".
These lead agencies work with smaller partners to market the products they handle, thus "removing what can be complex management of multiple agencies from our [internal] brand managers," adds Moore.
Among GM's brands are Cheerios, Betty Crocker, Yoplait yogurt and Nature Valley products.
Comments Campbell Mithun's ceo Jack Rooney: "We'll be compensated for all of our efforts, where previously new products and other ventures were subsidized by other assignments. We will participate financially in their success."
General Mills spent nearly $650 million (€516.9m; £353m) on advertising last year, according to Nielsen Monitor-Plus.
Data sourced from Adweek (USA); additional content by WARC staff