Tuesday, November 11, 2008

AUTOS' PLIGHT MAY DRIVE NEW AD FORMULA

http://www.nypost.com/seven/11102008/business/autos_plight_may_drive_new_ad_formula_138004.htm

Though automakers were some of their most profitable and prized accounts, ad execs nevertheless complained for years about the pernicious influence of "bean counters" who pressure agencies to accept lower fees while demanding more for their money.


At the same time, despite automakers' focus on the bottom line, agencies didn't overhaul their organizations or push for a different compensation system. Most agencies still bill their clients by the hour.


Detroit's decline could serve as a challenge to the ad industry to figure out a better way to build a partnership - one with clear objectives, performance standards and commensurate pay - rather than settling for a quick buck.


"It could cause a rethinking of the agency-client relationship to one that is more modern," said Ron Berger, chief executive of ad agency Euro RSCG's New York office, who labels the ad industry's past efforts to adjust its business model as "Band-Aids."