Twelve months in the melting pot, an agreement has finally been struck by America’s major advertisers and their agencies on the quicksand issue of appointment and compensation principles.

A set of guidelines covering this bristly subject has been agreed by a joint taskforce of members from the Association of National Advertisers and the American Association of Advertising Agencies. Those around the negotiating table included representatives from General Motors, Procter & Gamble, Ogilvy & Mather and TBWA\ Chiat\Day.

According to Four A’s evp Bill Nicholson, himself a taskforce member, the outcome of a year’s labor equates to little more than old fashioned commonsense – a commodity “not widely practised” in the ongoing joust between hired and hirer, he observes.

The main recommendations of the Guidelines for Effective Advertiser/Agency Compensation Agreements cover:

The setting-out of a detailed scope of work;

Measurable, appropriate goals;

Periodic staffing and performance reviews;

“Simple and clear” agreements, signed before work starts.

Notable by their absence from the guidelines are key problem areas such as metering the efficacy of a service-oriented creative supplier. Observes agency review consultant Linda Fidelman: “Most accounts you can’t do on strictly business measurements, because it's more than advertising [that drives sales]. That's the quandary.”

Another consultant, Peggy Mitchell-King, sees the guidelines as helpful, especially to “less seasoned clients”. She adds: “The best clients have been operating this way for a while. So this is perhaps a codification of the reality of how the industry has changed.”

Data sourced from:; additional content by WARC staff