Study: Clients Don't Pay Shops for Performance

NEW YORK Despite a steady drumbeat from clients demanding measurable results from the work their agencies produce, only about a fifth of the client executives polled this month by consultancy Reardon Smith Whittaker actually pay their shops in a way that rewards performance.

Asked if their agency compensation arrangement included some element of payment according to results, 81 percent of the execs answered no, and just 19 percent yes. Yet, when asked to give marketing advice to agencies pursuing new business, the execs repeatedly urged them to demonstrate results, saying, for example, “Truly understand the client’s end goal of growing the business and [achieving] measurable results.”

So why aren’t more of these clients putting their money where their mouths are?

Pay-for-performance arrangements can get complicated, particularly given a long list of business goals and multiple ways of measuring them, said consultants.