Coca-Cola Promotes Performance Driven Marketing

Coca-Cola Co. announced its plan to focus on performance at the Association of National Advertisers Financial Management Conference in Phoenix on April 20. As noted in an Age Age article published this morning, Coke’s performance-driven model has been successfully rolled out in 5 markets. Plans currently include to expand this pay-for-performance marketing model to 35 additional markets within the year.

Coke urges other agencies to adopt this foreward thinking engagement structure to ensure that clients pay for Real Results–as opposed to typical hourly rates. Ad Age states that “The concept of value-based models has been a hot topic in the industry for at least a decade, but few marketers have attempted to apply it. (Procter & Gamble is perhaps the furthest along but uses it on only 12 of its brands.)”

Numerous service-based companies are incorporating this structure into their contracts, but some naysayers believe changes made now are just reaction to the recession. Whatever the catalyst may be, the move to client-focused pricing will ensure agencies are accountable for the success of their projects. If results exceed expectations, agencies and clients will win.

Original Ad Age article:

http://adage.com/article?article_id=136266

Other columns to add to the discussion:

http://www.theaustralian.news.com.au/business/story/0,28124,25347479-36418,00.html

http://pm2pm.blogspot.com/2009/01/advertising-agency-compensation.html