When it comes to how agencies are compensated, digital shops haven’t always been treated like traditional shops. Retainers and performance incentives? Maybe, but project fees have been far more common.
That may be changing according to a study conducted by the Association of National Advertisers (ANA), which found that the number of digital agencies being compensated with a combination of project fees and retainers jumped to two-thirds last year, up from just 37% in 2009.
Also on the increase: performance bonuses. Nearly quarter of those
surveyed changed these last year, and nearly 30% plan to do this year.
These trends are likely to be good news for digital agencies. Although, of the 43% of digital agencies that adjusted their compensation schedules last year, 73% “restructured or reduced fees,” the growing use of performance incentives is sure to appeal to digital agencies confident in their ability to deliver measurable results.
Also notable: despite the fact that many clients would prefer to work with fewer shops, the number of marketers using five or more agencies grew to 44% last year.
Back in 2007, that number stood at just 23%. This may be good news for some shops, particularly smaller shops. This may be explained, in part, by the desirability of domain-specific expertise.
Internet marketing is complex, and as previously reported, SEMPO and Econsultancy’s State of Search Marketing Report 2011 found that specialist agencies are preferred over generalist providers when it comes to SEO, PPC and social media.
The bottom line: digital agencies are being treated more and more like their traditional counterparts when it comes to pay, and although there’s a lot of competition amongst digital agencies, opportunities still seem to abound.