Let’s be honest: No one is happy with the current advertising agency fee models – retainers, project fees and hourly rates.
Advertisers struggle to identify the value. Agencies feel they need to offer discounts to keep their clients. Procurement views agency fees as an opportunity to deliver savings.
So, let’s propose a new one based on the practices of the technology industry. They have disrupted their category with subscription-based models. They took the lead from publishers and others and turned it into a river of gold.
Why can’t the advertising industry embrace an agency subscription model? Why can’t we have a subscription-based marketing agency?
Almost all new technology platforms realise that getting consumers to part with their hard-earned cash on a transaction basis can be a real struggle. There is virtually no customer loyalty these days. Getting customers to buy often requires offering some discount or incentive and, in the process, sacrificing margins. So, instead of getting customers to make a purchase decision every time they want to transact, the technology companies started offering a subscription model.
One simple monthly payment is deducted from your bank account or credit card, and you can access all the services you need. We can now pay subscription fees for everything from entertainment to food and transport.
One of the reasons the subscription model is so successful is that, for most consumers, the monthly deduction goes unnoticed. Payment is made monthly, regardless of whether services are utilised. Why wouldn’t this work for advertising agencies?
Introducing the Exclusive Agency Subscription Model*.
No more worrying about the number of FTEs in the retainer or having to cost the next 12 months of projects for budgeting. The pre-agreed Exclusive Agency Subscription Model* covers everything you need from your agency.
Unlike the traditional retainer, it is not about retaining agency people. It is subscribing to the agency to provide the marketing and advertising outputs you need every month for your marketing plan. Instead of wondering if you are getting the people you are paying for, you get the people working on your brand, and the subscription pays for their work on your behalf. No more timesheet reconciliation trying to determine what the retained agency team did for you or how long it took.
It is like a retainer, but better, as your monthly subscription pays for all the outputs you need.
And better than project fees, where the agency team would change on a project-by-project basis, the Exclusive Agency Subscription Model* means that when you take the subscription for a year or more, you have exclusive access to your agency account team for your subscription.
Rather than being based on the agency people, the subscription level is based on what you need the agency to do for you: develop a new strategy—that is covered, and plan and buy your next multimillion-dollar media campaign—that is covered, too.
Changing your needs for the agency is no problem. The Exclusive Agency Subscription Model* will pivot and flex to your changing strategic needs because you are not locked into a retainer of people. You are subscribing to an exclusive agency service to deliver your needs.
But what’s the catch, you ask?
Well, there is a small catch. You don’t think the asterisk is there for nothing, do you? Buried in the fine print, way down in the terms and conditions, there is a clause titled Fair Use. This clause states, “Depending on the level of your monthly subscription, there is a maximum amount of outputs you can have the agency deliver in any month”. It does not let you do a Netflix binge one month and not subscribe the next. But then, if your subscription falls short of your monthly needs, it is easy to top it up to a higher plan.
Each month, you get a report that includes everything your subscription delivered for the month and the value representing your subscription cost—all independently measured and validated.
The Exclusive Agency Subscription Model* means having the necessary agency resources without being locked into a retainer. The subscription service model is based on delivering the services you pay for, month in and month out. All you need to do is choose the subscription level and the period you want to subscribe upfront, and we will bill you. We can even help you decide on the Exclusive Agency Subscription Model* that is right for you based on your needs for the agency.
Yes, this is a new model, and it is ready and waiting at an advertising, media or creative agency near you. Get all the convenience of a retainer plus the flexibility of a project fee. That’s the Exclusive Agency Subscription Model*.
* Subject to volume of work limitations per month
Okay, so perhaps the industry is not ready for a subscription-based marketing agency. But that does not mean you need to stick with a less-than-suitable agency fee model. Check out our Agency Fee Decision Tree to discover what models are available. Learn more about how we can customise an agency fee model to your needs with our Agency Commercial Evaluation Service.
