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Value-based remuneration has global appeal
Date: 22/10/2009
Marketers around the world are increasingly looking to value-based remuneration structures when it comes to paying their media agency partners, according to figures from the World Federation of Advertisers, the global trade body.
The WFA has conducted three separate surveys among its peer-to-peer groups of regional marketers in order to assess current trends across the industry.
Its findings are based on the responses of 21 companies in Asia-Pacific collected in July 2009, 28 firms in Europe in September 2008, and 13 Latin American organisations in the period from August to September this year.
Some 47% of advertisers in Asia Pacific said they pay their "offline" media agencies via a fixed rate commission system at present, compared with 39% in Latin America, and 23% in Europe.
Value-based systems are most widely-utilised in Europe, where they have been rolled out by 32% of participants to date, falling to 5% in Asia, and none in Latin America.
With regard to compensating their digital agencies, 39% of Latin American marketers chose fixed or output-based models, with 31% favouring labour-based approaches, and 23% fixed rate commission.
In Europe, half of the organisations polled preferred fixed rate commission in this area, with 36% paying based on labour, and 23% on value generation.
Looking forward, where advertisers planned to refine their media agency remuneration in the next year, 71% of the Latin American sample were hoping to make more use of value-based payments.
This shift reflects a similar trend observable in both APAC and Europe, where 83% and 40% of marketers respectively are also planning to implement such systems.
While not statistically relevant, the findings drawn from the samples across these regions can be regarded as indicative of the thoughts and actions of the large multinational marketers in the WFA's membership.
Data sourced from World Federation of Advertisers; additional content by Warc staff, 22 October 2009
For more information please contact Robert Dreblow or Steve Lightfoot.
