Magazine article Marketing


Magazine article Marketing


Article excerpt

Why Winston's wrong on fees

Rupert Howell, president, IPA, London SW1

I enjoy reading Winston Fletcher's columns and, more often than not, he talks a great deal of sense. But in his article praising the commission system (Marketing, December 7) he was talking a load of old codswallop to use one of his favourite words.

The reasons why the commission system is largely rejected are well documented. First, it was designed for 'pure' ad activity. As most agencies now provide a broader offering it has become inappropriate, particularly as media and creative have split.

Second, it discourages agencies from recommending alternative communication tools to their clients where relevant. And third, it tends to commoditise a marketplace, something agencies spend most of their time helping their clients avoid.

Winston's attack on the fee-based system is also misguided. No agency that I know of charges 'taxi-meter' time fees. Rather they are resource or workload-based monthly fees typically adjusted annually. So you are rewarded for more or continuing work, and for time efficiency in better margins.

Finally, his attack on payment-by-results (PBR) is ignorant. He should read the IPA/ISBA PBR Guide, Of course agencies try their best for all their clients. But PBR allows them to earn more if they exceed expectations. In return, agencies put a minor proportion of their base fee at risk, in case good results are not achieved. Good clients want better value for money, which is not the same as cheaper. Most clients are happy to pay well as long as they have evidence they are getting real value for money. That's what PBR provides. And that leads to better relationships.

Gap's 'Holiday' work is perfect for these multi-cultural times

Nancy Aston, account manager, Consultancy + Marketing, London W1

Isn't Sue Unerman the one who has missed the point of Gap using 'Holiday' for their Christmas-time ads? (Marketing, December 7).

Gap is very much known as a US company, the clothes are based on the all-American college style and using the 'Holiday' theme reinforces its positioning as such. …

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