Are timesheets as outdated as punching the clock in factories? That’s what one participant stated in a recent online debate held by the Marketing Agencies Association.
The discussion, which examined agency remuneration, involved 40 agency heads, senior marketing directors and procurement chiefs. Timesheets and costing based on hours was criticised for being of "dubious accuracy", "valuing process rather than achievement" and promoting inefficiency. As one client said: "How can it be right to reward an agency if its work involves a lot of people and takes a lot of time or punish it if it delivers quickly? A great idea produced quickly is much more valuable than a bad one that took ages to produce."
But the challenge is to find an effective alternative payment model. Most agree that what clients are really buying from agencies is business success. So real-time data may provide the answer, measuring immediate results for outcome-based remuneration – although this would require a greater willingness from clients to share data. For many, that may prove a step too far.
Simon Hathaway, chairman, Marketing Agencies Association
"I believe clients want to work with agencies that bring them insight-driven strategy and awesome ideas flawlessly executed – ideas that move their business forward. Too often, they get an account handler reconciling timesheets to ensure the agency is making money. Timesheet tyranny is a symptom of a bigger issue: fair remuneration. We don’t have a solution and clients continue to push for more for less. Perhaps if agencies started by reviewing the value they bring to a client’s business, instead of worrying about time, it might be a big step forward, transforming the client/agency relationship so that everyone can profit."
Andrew Peake, managing director, VCCP
"Filling out my timesheet isn’t the most enjoyable part of my week but, sadly, I don’t think it’s going to stop. On the plus side, timesheets provide a level of transparency for the client and help the agency make resourcing decisions, but they aren’t a measure of campaign success. There is perhaps a fairer halfway house. With some of our clients, we are agreeing fees based on a time estimate and then setting some of that fee aside to be paid based on achieving pre-agreed targets, with an upside for the agency if targets are exceeded. This sees the client and agency each carrying a level of risk, but both are rewarded if the campaign exceeds targets."
Clare Salmon, group brand director, Royal London
"As a client, I have never found it necessary to scrutinise the timesheets of my agencies at a granular level. The overall time needed to accomplish the task at hand, whether it’s a brand repositioning or a direct mail campaign, is important from a practical perspective and hence it has to be a starting point for working together. I have often offered risk/reward relationships to agencies, but I have rarely found one willing to accept the potential downside as well as the upside. What matters is mutual respect and a recognition that both parties need to make a return on the commitment that they make to one another."
Liz Barnsdale, managing director, AIS London
"If we ever want to move away from timesheets, then profit-related pay isn’t the only answer. While real-time results bring us closer to enacting PRP more broadly, we’re still often in the position of waiting six months for results to mature. What’s needed is a blend of a few things. First, better client procurement – people who actually understand what us agencies do. Second, we need to value our strategic thinking more highly. And sell it against a fixed price. And, finally, let’s build in PRP. Performance not only measured on end results but also on the quality of our people, their ideas and the service they deliver."