The document discusses problems with traditional agency compensation models and proposes an alternative value-based approach. It argues that fair pricing is subjective and based on the value a client sees in the services, not just labor costs. The document recommends agencies focus on defining objectives and scope of benefits, then determining a fair price, rather than letting clients dictate costs. Agencies should structure fixed-price agreements and allow for adjustments if objectives change. Both agencies and clients must embrace this new approach to determine fair yet flexible compensation.

1. Value-Based Agency Compensation Pricing Outside the “Box”, Black or Otherwise Association of National Advertisers Agency Relations Forum Santa Monica, CA February 9, 2006 © sjk advisory group 2006

9. Where Do We Go from Here?