Monday, April 21, 2008

Agency Time Sheets Vs. Viewer Time Sheets

The meeting was starting to get interesting.

The creative agency had just presented to the client what they would charge to come up with a concept for a ninety-second, online video commercial.

The cost-controller on the client side, who had been listening silently, now had center stage. Not surprisingly, he was making the best of it; slicing and dicing like a Benihana chef.

Number of people on the job, hours against, agency time sheets, all being gutted by the cost-controller. The agency was taking a beating, and when the cost-controller finally sat down, the proposed fee lying in tatters, the agency’s Managing Director stood up.

“Agreed,” he said. The cost-controller looked up, perplexed, expecting a defense more spirited.

“Agency time sheets are an analog way to measure our worth,” the Managing Director continued. “Not to mention, our value to you. So, our suggestion is that you start paying part of our fee based on viewer time sheets.”

“Viewer time sheets?” the cost-controller asked. “What’s a viewer time sheet?”

The Managing Director responded with a question of his own. “Because this online commercial is ninety seconds long, those who are interested will opt-in to watch, right?”

“Correct, “ answered someone from the digital division. Ninety-seconds is too long for pre-roll.

“Which means,” said the Managing Director, “that we’ll know when people start viewing. If so, then doesn’t that same digital technology also allow us to know when they stop viewing?”

“Also correct,” said the digital guy. “You’ll know how many of the ninety seconds of the commercial were actually used. I mean, viewed.”

“Well, said the Managing Director, “that’s your viewer time sheet. What we’re proposing is that instead of paying us for how long we worked on the commercial, pay us based on how long people watch the commercial.”

The head of marketing on the client side, who up to now had been listening to this discussion with a bemused indifference, was suddenly anything but indifferent. “Let me get this right,” he said. “What you’re saying is that instead of us paying you for effort, you’d be willing to be paid based on outcome?”

“Exactly,” said the Managing Director.

The cost-controller was looking a bit stunned. I think he could see the writing on the wall. “But, but this means that the viewer will be doing my job,” he stammered.

“I’m afraid so,” replied the Managing Director, as he slid the tattered proposal into the wastebasket. “But we feel that’s better than you trying to do ours.”

More discussion followed. Pros and cons were weighed, but the audacity of the idea had the room buzzing.

Imagine being paid based on how good you are versus how large. Obviously, not every agency would be willing to work under these criteria. After all, under the current system, agencies get paid whether viewers watch the work or not. There’s safety in that.

It takes an agency with a supreme amount of confidence in their ability to be paid based on their ability. This agency seemed fearless.

I don’t imagine that many marketers can say the same about theirs.

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