'Before, you got the business, opened up the champagne and everybody knew it was 15% commission and no more questions,' said Alan Pando, DDB Needham/West president.
'Today, negotiations ensue not only right after you've won the business, but sometimes before.'
These days, agencies find themselves in this scenario: The client says they'd like to give the shop the business, but they want to refrain from announcing it until they've ironed out the details.
Those 'details' are the compensation agreement.
As a result, compensation levels continue to slide. In the worst cases, agencies have become locked into compensation agreements they can't live by without significantly reducing their level of service.
Copyright Adweek L.P. (1993)