The Association of National Advertisers' 1995 survey of agency compensation trends reveals that only 14% of advertisers still pay agencies the once-standard 15% commission.
Not that advertisers dislike the whole concept of commission-based compensation-45% of respondents are still paying commissions but of less than 15%.
The good news for agencies is that it's possible to preserve or even improve profit margins through incentive-based compensation arrangements.
The bad news is that many big advertisers don't like incentive-based systems, finding them hard to manage.
Said Eastman Kodak Co.'s Bruce Wilson: "It is so much more difficult to isolate the advertising based on the success of the year because there is so much more involved."
And not surprisingly, there's some difference of opinion on what client and agency feel is a fair return for the agency. The advertiser's argument goes: Why should I, making a 12% pretax profit, sit for my agency making 20%?
Details on Page 3.