Thinking Small: Bonuses for Clients

Ian Lurie Oct 12 2006

What if marketing and ad agencies paid clients bonuses?

Beau Fraser has an editorial on page 13 of this week’s Advertising Age that suggests just that. And internet marketing might be the perfect place to start.

Here’s how it could work:

Client and agency agree on a goal: Generate, say, a 3:1 return on a $250,000 advertising buy. Client pays agency 15% of the total buy as a fee. That’s $37500, plus creative.

Client agrees to say ‘we like it’ or ‘we hate it’ and avoid endless revisions, design by committee and throw-it-all-in redirects that kill the concept.

Agency goes and does the work.

Client says ‘we like it’ or provides productive feedback.

Campaign launches and is measured by agency.

If, six months later, the buy was a success, agency pays the client back $12,500. Agency keeps a 10% fee. Client gets 5% back, plus they just earned $500,000 profit on their buy.

Why turn everything on its head like that? Because it encourages everyone to think small, be more efficient, and keep things running smooth and fast. The client gets a refund if they keep it simple. The agency gets success, a happy client, and more work down the line.

It also assigns some portion of the risk inherent in micromanagement of a project back to the client.

Internet marketing is a great place to do this, because it offers verifiable results.

Crazy talk? What do you think?

tags : conversation marketing

1 Comments

  1. Fraser

    Fraser

    I haven’t read the article but I am intrigued because i’ve a couple of client projects that progress slowly due to endless revisions.
    How would this model work if the initial objective was NOT achieved?

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