Many remuneration
agreements, be they project fees or retainers are
based on the head hour resources required to undertake the
task multiplied by an overhead and profit factor. In some cases these
payments include a performance-based component as well. But one of
the key issues is setting a realistic scope of work
and then predicting the human resources
required.
Setting the
baseline
The most effective model is setting the previous year as the
baseline. The number of projects for that year and
the number and type of head hours and associated
costs are a known quantity. Accepting that the head hours are correct
this becomes the baseline from which the following years’ scope of
work is compared.
Setting the scope of work
Predicting the advertising activity for some advertisers is easy and
part of their normal budget planning. But for other advertisers it is
much more difficult, with the need to react to the market place or
difficult trading conditions making predictions for the coming year
largely inaccurate. If you cannot accurately set the scope of work
then you may be locked into a retainer that is too high or
too low. Either way it becomes expensive with you
paying too much or not paying
enough to maintain the relationship with the agency.
Adjusting the head hours
Some advertisers have opted for a system of an adjustable
retainer based on the number of projects being undertaken.
This method requires the scope of work undertaken to be
reviewed either monthly, quarterly or half yearly
based on the level of activity to ensure the number of hours does not
exceed the amount agreed under the original contract and to adjust
the payment accordingly. The problem with this method is that
it relies on the agency keeping accurate and detailed time
sheets in the style of law and accounting firms who account
for every 15 minutes. This can lead to unwanted
disputes over the efficiency and effectiveness of the
agency.
Using the industry
benchmark
Using the industry benchmarks we have collected over the past 4
years, P3 has developed a model that can predict the
human resources required year on year across account
management, creative, electronic and print production. Based
on creative outcomes, such as television, print and radio commercials
it allows advertisers and agencies to not only predict, but to
measure the impact of changes in the scope of work
on the agency resources required.
To find out how the P3 Scope Monitor can help you manage
your agency resources and remuneration, contact P3Biz by email
biz@p3.com.au
put the p3tv
production application to the test
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Want
to try out the P3TV benchmark
application for yourself? Now you can
with our free on-line demonstration.
Just go to www.p3tv.com.au/app
Advertisers
enter username client
Agencies enter username
agencyproducer or agencystaff
Film companies enter username
producer1 or producer
2
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And all have the password demo.
Try it
out for yourself. If you need help simply click the HELP
button on any page.
If you enter an estimate
remember this is an open demo section of the applications so we
cannot provide any security. Therefore just use the time to
check out how it works and what it can
do.
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64 pages on improving the performance of your
advertising |
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To
get the complete
64 page manual
on how P3 can help you
maximise your advertising budget,
email us at people@p3.com.au
or order on-line at
our website www.p3.com.au
by clicking the SUBSCRIBE link
or download a pdf version
by clicking the E-BROCHURE link.
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more top 10s for 2004 |
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The popular P3 Top 10
Checklists are back for 2004. The first one is to be mailed
out in April.Already available are:
Television production
Print production
Agency remuneration
Financial compliance
Misleading statements
TPA compliance
If you are missing any of these
you can order them from our website www.p3.com.au
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