Advertising Agency Compensation: An Agency Theory Explanation
Journal of Advertising
advertising agency, compensation, agency theory
Business Administration, Management, and Operations | Marketing | Other Business
Advertising agency compensation may change dramatically in coming years as advertisers put pressure on agencies to reduce commissions and tie compensation to performance resulting from advertising campaigns. Drawing on agency theory from the economics discipline, the authors develop and test several hypotheses to address the advertising agency compensation decision. Their study provides the first comprehensive look at the prevalence of outcome-based compensation tied to performance and other compensation systems currently used among U.S. advertisers.
Spake, Deborah F.; D'Souza, Giles; Crutchfield, Tammy Neal; and Morgan, Robert M. (1999). Advertising Agency Compensation: An Agency Theory Explanation. Journal of Advertising 28(3), 53-72. doi: 10.1080/00913367.1999.10673589 Retrieved from http://digitalcommons.kent.edu/mrktentrpubs/26