Welcome to the February edition of TrinityP3’s e-news
What is the best agency remuneration model for every advertiser?
It is interesting that according to the ANA the most common agency compensation model is still the resource retainer approach. Even with an increased number of advertisers talking about moving away from it, it appears that the retainer model is holding its ground, most likely due to convenience and ease of management.
But there are an increasing number of different agency compensation models as well as a large number of hybrid models too.
Having worked with agency remuneration for more than 15 years, we have experience with all of the common models and have even created some innovative hybrid models aligned to the needs of the advertiser.
The fact is, there is no longer a standard agency remuneration model or even a best practice model that can be applied across every advertiser. But we have found there are some specific criteria that allow you to decide which models or hybrid models are the best fit. Read more here.
Choose the Right
Agency Fee Model
There are many different agency fee models. But
what is the right agency fee model for you? Be it for a media agency, creative
agency, a digital agency or more, the TrinityP3 Agency Fee Decision Tree will help you
Managing Marketing Podcast: Putting the value back into agency remuneration
Managing Marketing is a podcast hosted by TrinityP3 Founder and Global CEO, Darren Woolley. Each podcast is a conversation with a thought-leader, professional or practitioner of marketing and communications on the issues, insights and opportunities in the marketing management category. Ideal for marketers, advertisers, media and commercial communications professionals.
Mike Duda, Managing Partner of Bullish, explores the role of agencies in creating business value for their clients and yet the business model of the majority of agencies is cost recovery centric and not value based. Darren and Mike discuss the role of performance based models and incentives and the need for agencies to transform their compensation models to thrive.
Value Based Compensation is the hot topic as advertisers and procurement look for ways to
improve the performance of the current spend (commission) and cost based
(resources) models. “The biggest barrier is defining value in a way that is objective and
fair to both sides”. So how do you defined value based fees?
The challenges in measuring the value
your agencies contribute to your marketing
How do you calculate or assess the value of your marketing spend? In the
past three years we have had a large number of projects designed to achieve
just that – a fact based assessment of the value of the marketing spend.
Specifically marketing communications or advertising and largely focusing on
spend with external agencies and suppliers.
Now you would think this is something that almost any advertiser could
do themselves. Why would you need to engage an external consultant to assess
the value of your agencies and marketing suppliers? But the truth is that most
companies and organisations do not have the data or the methodologies to
provide an account of the value of their marketing agency spend.
A simple way to check
your advertising agency fees
Are you are an advertiser, marketer,
procurement professional or even an agency manager? One of the key issues that
arise on a regular basis is the advertising agency costs and specifically the rates charged.
TrinityP3 has been benchmarking
and assessing agency fees and charges for more than a decade and one
of the areas of conflict is determining a fair and reasonable rate for those
advertising services. This is why we have developed an on-line system
called Ad Cost Checker.
What is value based remuneration for advertising
and media agencies?
Retainers are still the most common form of remuneration for advertising agencies in the major markets.
These retainers are based on resources multiplied by direct salary costs by overhead
factor and then multiplied by profit margin.
But how do you value your remuneration / compensation model? Value
has many definitions. But basically value can be defined as
V = Q / $ which is
VALUE is QUALITY and/or QUANTITY divided by COST.