IPG Mediabrands Shifts Pay Structure to “Pay For Performance”

By on 06/18/2013 6:55 PM @daisywhitney

MOUGINS, France  – About half of IPG Mediabrands clients now pay the media agency on a pay-for-performance rather than commission basis, says Matt Seiler, Global CEO, IPG Mediabrands in an interview with Beet.TV. He contends that commission-based fees that incentivize agencies to spend as much of the client’s money as possible are out of step with the reality of the paid, owned and earned marketing world and that pay-for-performance is a better model for the future.

“Whatever your KPIs are, those should be our KPIs,” he says in this video interview. A KPI-based payment also affords more flexibility. In the past, if an agency noticed something happening with product pricing that was out of synch with how it’s paid, the agency had little motivation to suggest changes. A pay-for-performance helps the agency look out for the client more.

In addition, Mediabrands is shifting to use more real-time campaigns. “We have committed in North America to delivering 50% automation across our buys in three years.”

We spoke with him on Monday at YuMe Video event hosted by IPG at the agency’s villa in the hills above Cannes.

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