afaqs!

How digital agencies can get right remuneration

By Kapil Ohri , afaqs!, New Delhi | In Digital | April 28, 2011
At the event ad:tech, held in Gurgaon, digital experts discussed ways to get the right remuneration for the services offered by them to advertisers.

ad:tech, the technology and advertising event, held at the Leela Kempinski Hotel in Gurgaon, witnessed a panel discussion which focussed on "digital agency remuneration models."

Manish Vij, founder, Vun Network and moderator of the session initiated the discussion by pointing out that the spends on digital marketing is too less, that the concept of commission-based remuneration model will not suffice the need of digital agencies, and that there is a need for a new remuneration system.

Anjali Hegde, chief executive officer, Interactive Universal, said that advertisers use the same metrics with which they measure traditional media, to measure the services offered for digital media. "Advertisers are not aware that we need technically trained people and a lot of effort to create and execute even small-budget digital campaigns," said Hegde. She emphasised that digital agencies should evangelise and educate the marketers about the amount of effort that goes into the execution of digital campaigns.

Sameer Suneja, managing director, Perfetti Van Melle India, agreed with Hegde's point. According to Suneja, proper remuneration is not happening because of the inability of the agencies to educate advertisers/clients on what goes into creation and metrics that should be used to measure the services offered under digital media.

Vikram Sakhuja, chief executive officer, Southeast Asia, Group M, pointed out that advertisers shouldn't have issues with agency remuneration if the agencies will quantify the work and effort they put into the execution of campaigns.

Agencies should define the scope-of-work and explicitly mention the cost of each element that goes into the creation and execution of digital marketing activities. Agencies should explain the process and mention all that goes behind the execution of digital activities and benchmark each effort.

Vij also raised the issue whether digital accounts should be managed on project-basis or on Agency-of-Record basis. To this, Suneja replied, "If the advertiser wants to do a long-term activity on the digital media, then he should focus on Agency-of-Record relationship, rather than on project-basis."

Hegde pointed out that advertisers get serious about relationship with digital agencies when their dependence on the digital media is pretty high.

ad:tech has been brought to India by the New Delhi-based NetworkPlay Media, in partnership with the UK-based DMG Events.

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