Retainer Vs. Project-Based Compensation

Agencies tend to be far more flexible with their fee structures, especially in laggard economic cycles. They have an overhead of staff that needs to remain billable at a decent percentage. Usually that percentage is around 65-95% depending on the overhead fixed costs component. This gives the upper hand to a client in attracting the attention of a larger shop. However, this is a short term solution. As the marketing economy starts to improve, agencies will “trade–up” and look for more established, long-term, budgets to help manage their visibility. And who can blame them?

Clients like project-to-project relationships because it gives them leverage of budget control, and the option to end a relationship if performance is poor. The process of firing a retained agency is obsolete and messy. Agencies and clients should be frank about engaging under this model, as it is important to agree on the key performance indicators (or KPIs) before engaging in the project. Having a shared understanding of the KPIs helps remove subjectivity regarding the performance of the agency, or the outcome of the marketing effort.

Marketers often struggle to establish a process and methodology for managing communications. Working on a project basis with an agency or PR firm is not likely to solve this problem.

According to Forrester Research Project-to-project relationships can have an upside from an agency perspective. Besides covering off some COGS (agency cost of goods sold), they can actually grow into accounts while reducing overhead.

These relationships can typically result in:

- Shorter sales cycle
- Higher profit margins
- Speed to ideas in market
- Ability to prove their value, every day
- Permission to grow into the business
- Ability to enter into otherwise crowded markets
- Establish name brand accounts on roster

The issue for marketing agencies is their ability to find these projects. Project outsourcing will increase in a recession, but if the agency isn’t poised to get its foot in the door, it may find itself chasing “bad” projects – unprofitable, not focused in areas of its expertise, and working with brands that are not healthy, etc.

Please let’s not forget that getting paid is just the fiscal transaction between the two parties and shouldn’t be confused with a “relationship” between an agency and a client. That is earned over time by delivering the goods and great work.

Marketing Matchup can help you find the right marketing firm for your needs. You can search by agency size, location, industry experience, marketing services provided and past creative work. If you have a marketing project in mind, sign up for a free client membership and post your project to be automatically matched with the right agencies.

Already working on a marketing project or a campaign? We have compiled a set of marketing tools that can help both clients and agencies plan and execute your next marketing project or campaign.

List of Agency Review Consultants

Hiring an agency review consultant is expensive. The average agency review, for both the client and agency, can run in the aggregate of about $750,000. Keep reading for a thorough explanation of why it is so expensive. If this price tag seems a bit too much then check out Marketing Matchup, we can help you find a marketing firm for free, and get a match in less than 5 business days.

According to Forrester Research, just completing the first stage of an RFI can cost an interactive agency as much as $17,000 in human capital costs. In addition, many review consultants require custom videos to be created and submitted with case studies that align along the client’s criteria. Let’s estimate an additional $10,000-$15,000 for producing, editing and duplicating these materials. In a review where 10-12 agencies are invited to the first stage, the aggregate cost is estimated at $270K-$384K – just for the first step of the process!

For agencies lucky enough to make it to the final round of the review, they can expect spec costs averaging around $100K per agency. Typically, three agencies are invited to the final round, so that is another $300K for the review consultants. Clients can expect to pay fees ranging from $25K, for a rapid review, to amounts as high as $250K. At the end of the day the client has found an agency, but at a cost that could be as high as $750k for the entire process!

Keep in mind that not a dollar has yet been spent on branding, sales, marketing – anything to generate an actual lead. As mentioned earlier, review consultants can help guide an inexperienced client through the process of hiring an agency. Or, a client could spend the money on hiring a consulting firm, like ViBrand Consulting, who can tell you how to sell smarter.

If this price tag seems a bit too much then check out Marketing Matchup, we can help you find a marketing firm for free.

If you are still interested in hiring a review consultant, we have provided a list below with links to some of the top review consultants in the world:


Agency Review Consultants

United States
AAR Partners - New York, NY
ADvice and Advisors - New York, NY
Ark Advisors - New York, NY
Arquent Consulting - New York, NY
Bob Wolf Partners - Santa Monica, Ca
Joanne Davis Consulting - New York, NY
Jones Lundin Beals - Chicago, IL
Morgan Anderson Consulting - New York, NY
Pile & Co. - Boston, MA
Roth Associates - New York, NY
Select Resources International - Santa Monica, CA
The Bedford Group - Atlanata, GA

Europe
AAR gmbh - Dusseldorf, Germany
Agency Assessments Int - London, UK
Consultores de Publicidad - Madrid, Spain
Gibory Consultant - Paris, France
ISBA - London, UK
Registr Reklamnich Agentur - Prague, Czech Republic
Scan Management Consultants - Amsterdam, Netherlands
The Observatory - London, UK
VT Scan - Paris, France

Asia/Pacific
Agency Register - Sidney, Autralia
R3 Asia Pacific - Beijing, China

Latin America
Sales, Periscinoto, Guerreiro & Associates - Sao Paulo, Brazil

Marketing Matchup can help you find the right marketing firm for your needs. You can search by agency size, location, industry experience, marketing services provided and past creative work. If you have a marketing project in mind, sign up for a free client membership and post your project to be automatically matched with the right agencies.

Already working on a marketing project or a campaign? We have compiled a set of marketing tools that can help both clients and agencies plan and execute your next marketing project or campaign.