Advertising agency new model: Pay-for-performance

By Tony Fannin, President, BE Branded


In today’s economic conditions, marketers are searching for ways to lower costs while still maintaining revenue, brand equity, and market share. One area some turn to cut costs is their marketing budget. Many see the marketing budget as the first thing to go. This can be a double-edged sword.

Yes, marketers do want more accountability from their agencies. They want them to not only provide creative innovation, but to view the market as they do, as businessmen. But, the wiser ones also know, if you squeeze too much you risk long-term harm to the brand. When the economic times change for the better, you’ve either damaged your brand by becoming the de-facto, “cheap” brand or you’ve go so quiet in the marketplace, that you’ve become irrelevant and you’re competitors have taken your place in the hearts and minds of your customers.

One way we’ve tried to change the way we do business is to offer our clients three business models to choose from. One – the “hitman” approach. Give us your toughest marketing problem or your “down & dirty” problem. We’ll come in, solve the problem, execute the project, and “disappear”. Second – If you want us to handle all of your marketing needs and coordinate all phases (online, traditional, promotional, etc.) we’ll do that. The third way gets to the heart of this entry. Pay-per-performance.

We provide all of our marketing insights, brainpower, and execution on your behalf without any upfront fees. In return we receive a pre-negotiated percentage of revenue. In effect we put our money where our beliefs are. We climb in the boat with you instead of directing from the shore. Based on your goals, we’ll set bench marks that will carry a monetary value. If we don’t hit them, you pay nothing. If we accomplish the benchmarks, then there will be ample revenue to go around.

There are a few agencies who have taken the PFP idea and is implementing it too. What prevents the majority of marketing firms from doing this is their overhead and cost of doing business. It seems the firms who are efficient and nimble are the ones who have been able to take advantage of this business model. Of course, there are responsibilities on the client side that must be agreed upon as well. We can discuss that in another entry.

If structured properly, PFP is a way to get everyone pulling in the same direction and brings about true mutual interest. As an agency owner, I look at how I can provide and prove our worth to clients and PFP gives us a tool to do just that.

Tony Fannin has over 24 years of integrated marketing experience. Has developed and executed marketing strategies and creative approaches for a number Fortune 500 companies. He has also helped several start-up businesses creating and executing their marketing approach.

Tony is president of BE Branded, an integrated marketing & design firm that helps clients Be Somebody to their customers. Their research shows that if businesses don’t connect with their audience in a real, emotional way, they risk becoming a commodity.

Call them if you would like to talk about whether you would like to Be Somebody or be a commodity. | 317-797-7226


About Be Branded

Tony Fannin is of President of BE Branded, an integrated marketing firm who helps clients BE Somebody to their customers. If you aren't somebody, then you are commodity.

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