Online Shops, P&G Agree to Hash Out Differences
CINCINNATI–Complaints about compensation were a major concern for interactive ad agency executives attending Procter & Gamble’s Future of Advertising Stakeholders Summit (FAST) last week.
Many agencies want to be paid for their overall performance. So few dollars are spent online, most shops claim they would not survive if their compensation was based only on the production and placement of Web ads, as reflected in the percentage-of-billings method predominantly used.
Chan Suh, chief executive of Omnicom Group’s Communicade unit Agency.com, for instance, said ad placement generates only 15-20 percent of his agency’s revenue; the largest chunk is from consulting.
Attendees had few specifics, however, on alternative compensation methods. Bob Allen, president of Modem Media.Poppe Tyson, said Friday, “I think we’re going to see a real sea change with the compensation model.”
The conference’s organizer, P&G vice president of advertising Denis Beausejour, had a different objective: He wanted to see a consensus on the future of Web ad formats.
Taking a position favored by many clients, Beausejour has been pushing for options beyond banners, such as pop-up windows that would lead consumers through animated ads. In May, Beausejour said P&G would not increase its online spending–about $3 million per quarter–until animated ads were more widely accepted.
Rich LeFurgy, Buena Vista’s Internet Group ad sales vice president, maintained that “rich media” ads, which P&G likes, interfere with a user’s experience.
Linda McCutcheon of Time Inc. New Media said major format changes are not likely until larger ad budgets are in place.
Despite the disparate views, the participants agreed to try for a consensus through a new industry committee, dubbed FAST Forward [see IQ News, page 38].
Among the ad agency executives at the event were chief executives Bob Schmetterer of Messner Vetere Berger McNamee Schmetterer/Euro RSCG and Ed Meyer of Grey Advertising. Schmetterer noted that top executives at most agencies and clients “are clueless” about the Web’s potential.
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