I was interested to read an article in the FT a few weeks ago about David Bell - the head of Interpublic - partly because he walked out of the interview with the journalist because he didn't like the line of questioning, but also because he was arguing that there ought to be a new method of agency remuneration. His view was that agencies should be rewarded by their contribution to business success. This would mean that rather than a fee, the agency would receive a share of the increased profits derived from advertising. His argument was that the contribution advertising made wasn't reflected in the rewards. Well I've seen this process in action (for a flotation) and it can work where the accountability is very specific, but I would question whether in most cases the role of advertising can be clearly identified. Also we might argue that although there are some high profile successes where advertising was strongly influential, (Orange springs to mind), with advertising achieving a 3% trust figure among the public, there are plenty of failures. To use Alan Mitchell's terminology this seems a blatant case of seller centricity. I would also hazard a guess that if the system were implemented in a buyer centric way, Interpublic would see a decline rather than a rise in their rewards.
posted by nicholas, 3:31 PM  permalink