The Agency Compensation Problem

The Agency Compensation Problem: There’s no shortage of theories about what ails the ad agency business. John Winsor, the former Crispin + Porter Bogusky executive who left to start crowdsourced shop Victor & Spoils, thinks it’s simple: bad economic incentives. Winsor believes clients aren’t getting the work they’re paying for because agencies make money based on the more bodies thrown at a project and the longer it takes. V&S opts for a fixed cost. Would this work for the large, complex relationships many agencies have?

Stat of the Day: MLB saw more mobile traffic in July than from the Web.

The “Lazy” GRP: Not everyone is enamored by the Web’s moves to institute a version of TV’s reigning gross-ratings point-measurement standard. Mediakitchen’s Barry Lowenthal goes so far as to call it lazy. The issue is how far the Web will go to get a piece of TV budgets. The truth is, as any reporter covering the space will tell you, most TV buyers don’t understand the rudimentary realities of online advertising. Will they change or will the digital industry change? The money up until now has been on the former, but it looks like as time passes many are willing to throw in the towel.

Beyond the Click: Speaking of measurement, Media6Degrees CEO Tom Phillips is as frustrated as anyone by the adherence to the last-click standard. Like many ad sellers, he thinks the primacy of the click gives short shrift to the effectiveness of banners. But now Phillips has some data to back this up. One of Media6’s scientists came up with a methodology for examining ad effectiveness and tested it on 30 campaigns. It found, no surprise, all but one of the campaigns worked in driving more site visits. Figuring out the attribution puzzle will take more than one network applying a new methodology, but it’s good that the industry is starting to take the issue seriously.

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