Agencies are given a percentage of ad spend by their customer and this model encourages the agency to spend more of their clients’ money. It goes totally against a web marketing philosophy which looks to increase returns on investment whilst lowering the ad budget.
Let me give you an example: We were called in by an agency to work with a company for whom they had set up a online advertising campaign. They had started the job but were now a little out of their depth. At my first consultation I asked to look at the site analytics and within no time found that a quarter of that spend was being wasted on one set of keywords. My recommendation of stripping out those keywords saved them 10,000 (R140,000) per month and increased the ROI for the site instantly. I remember sitting in the meeting with clients smiling and my ad agency colleagues frowning, knowing they had just lost a nice chunk of their residual. Probably not the best move in terms of our relationship with that ad agency but in my opinion, honest marketing.
Here lies a big problem for us. As a web marketing business, World Wide Creative recognises that there is big potential exists in working with traditional ad agencies. So where do we go from here?
Vinny Lingham offers an excellent intro to Click2Customers report on Profit Sharing being the Marketing Model of the Future.
The biggest problem, however, lies in not only convincing the ad agencies that this is the way to go, but in getting the client on-board with this new model as well. It amazing how many clients we approach with this model worry about sharing profit and would rather pay set fees and even a percentage of their ad spend 
Read more posts by Mike Perk
Related posts:
