All work but the agency is estimated at time of briefing and approved. A common hybrid model sees a small retainer underpinning this approach to provide consistency of account management. Projects can either be held to the approved estimate or reconciled to actual.
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- Where projects are either particular complex or unique then the agency fee is best based on an estimated resource plan and cost to deliver the project.
- This requires the project to be well specified with detailed deliverables and outputs and project milestones and timelines.
- Changes to the project specification requires an additional estimate for approval to cover the proposed changes.
- Also estimated project fees can have variable components outside the estimated and approved fee such as production, which would be added as a mark up or an additional estimated resource fee.
Advantages
- Easy to negotiate based on immediate needs.
- Very flexible. However, paying for services on a project by project basis generally comes at a 10%-20% premium.
- Easy to budget for a specific campaign as deliverables agreed on an as needs basis.
- Gives the agency guaranteed resources on a project by project basis.
Implications
- This is hard to budget a year in advance unless the budget is fixed.
- Often leads to less brand consistency and alignment to the over-arching brand and communications strategy.
- Bigger campaigns can often loose some of the synergies if assets are created by channel only, rather than integrated thinking.