Many agencies talk about it, some do it, few actively embrace it.

Payment by results has the potential to swing a pitch your way and will often make you very popular with procurement. But in practice does it actually end up improving results or is it simply disguising a discount by any other name.

For payment by results to truly work there has to be an upside for the agency based on achieving results which can be empirically measured against agreed objectives. The client also has to be able to see genuine commercial returns and how these can improve over time based on the agency delivering against its promise. As with all incentives the targets must be challenging but achievable and they must drive a genuine desire by both parties to do commercially sound activity and to avoid vanity or knee jerk execution.

Ideally any PBR approach should be over a long term campaign plan, not measured against a project by project basis - the agency has to be able to lose on some projects and win on others - especially if there is a test-learn-refine culture built into the campaign strategy.

Benefiting from incrementally improving results will drive any self respecting agency towards the best solution not the solution that represents their comfort zone - stretching channel selection and creativity. In turn this will maximise returns and encourage the kind of focus on measurement and analytics which can produce exceptional rather than satisfactory results. Where possible (or more importantly where measurable) there should be a brand element which measures the brand saliency and appeal to ensure that creativity is maintained.

With budgets becoming tighter and boardroom demands on ROI increasing we expect to see PBR increasingly required as a matter of course rather than by exception - we can either resist it or embrace it. I know what we will be doing.

Author: Matthew

At HS&P, a third of the agency is made up of planners: integrated, data, digital and loyalty planners for clear, integrated thinking.

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