The 4As Plans to Step Into the Ring on Agency Compensation

It seems incredible, but the 4As is about to release its first ever position paper on agency compensation according to a report in Ad Age. It acknowledges that the issue of compensation has become “increasingly thorny” between agencies and clients with plenty of blame to go around.

There are four key principles listed in the Ad Age report, but, really, it looks like two essential concepts:

1. Sell value

2. Turn pricing  into a core competency at senior levels of agency management. This is a great concept which found daylight earlier this year at TBWA when it appointed a Chief Compensation Officer.

Selling value will be the hard part. The industry is struggling with its belief system.

But, progress.

Television: the Once and Future King?

Thank goodness Joe Marchese spotted the Economist piece, “The Return of Advertising: The Box Rocks”, on which he opined in his Online Spin column today, “Why television is Still King.” Per The Economist, advertising is leading an economic recovery driven by the resurgence of the 30-second commercial on TV. Per Joe Marchese’s Spin column, great, but The Economist also notes that, “Search engines and online banners are not nearly so good at making people aware of new products. Nor do they offer emotional experiences. Television’s ability to build brands by surrounding adverts with gripping content is unsurpassed.”

Writes Joe:

“…the differentiator is that television has created a system for delivering advertising in a way that fits with the medium and engages consumers, giving advertisements the ability to create discovery and tell stories. The Internet has the potential to offer marketers the same ability, but simply needs a better system than banners and search.”

I think Joe has it right in the first (two) parts and wrong in the third. Yes, the differentiator is that television created a system that fits with the medium and engages consumers. Yes, the internet has the potential to offer marketers the same ability (on which Joe has written eloquently for years). But, no, a system apart from banners or search is not required.

Indeed, look at search. Granted, search does not tell a lot of stories. But, man, is Google rich. Why? Well, its paid search business, inclusive of its substantial ad network, has done a good job of using the medium in a way that fits with the medium. The thing people need to do regularly online is search for stuff. Bingo, paid search!

The thing people need to do after searching for stuff is engage with what they came searching for. Bingo, display advertising. Except, that display can’t stop waving its arms and popping-up to shout, “Look at me! Look at me!” Display is dedicated to the proposition that it must be the center of attention, which is an attitude it picked-up from – you guessed it – television (okay, also radio).

There is nothing wrong with display. There is everything wrong with advertising expectations. And when the internet stops trying to be something it’s not (television), it can get on with fitting-in.

See also, here, here, here and, perhaps also, here.