It Shouldn't Take Revenue-Sharing to Do a Good Job

A recent BusinessWeek article tackles the growing trend among advertising agencies of trading their standard fees for a stake in their client's business. The idea is that the ad agency will have a greater incentive to produce effective work if they get a chunk of the profits. While proving ROI has always been a sore spot for marketers, this method isn't exactly the best way to solve the problem of ad efficacy.

While advertising tends to be a different ballgame than other forms of marketing (corporate ID systems, for example, or direct mail), the idea that it makes sense for ad agencies to go into business with their clients is ridiculous. Pick a business, and do it well.

More to the point, though, I have to take issue with the article's underlying premise:

"Marketers have little reason to care about the performance of a campaign after the client doles out their fee...[Anomaly's] unconventional approach of treating marketing campaigns more like intellectual property to be licensed than commodities to be sold could disrupt the long-held model of a nearly $150 billion industry."

I think BusinessWeek is conflating two different issues. Designers and writers have long fought for our rights to our own work—copyright protects the author of any work until said author chooses to sell or give away some or all of those rights. The public—and apparently BusinessWeek—has a poor understanding of copyright and IP; clients often think they're buying ownership of a given creative work rather than limited usage rights. Unless the contract stipulates otherwise, they're not.

To claim that this process of licensing individual rights to a work—which is actually quite standard in our industry—is somehow the same as trading those rights for a royalty is to misrepresent the business relationship. You can trade rights for a fee, or you can trade them for a percentage of future profits—either way, though, the individual rights remain unchanged.

Someone needs to point out to Anomaly's partner, Carl Johnson, how bad it sounds when he says ""When we own the IP or we share in the revenue, you can bet we're going to work all day, every day." So what exactly were you doing for your clients before this arrangement? It's no wonder Bill Hicks called us marketers "the ruiner of all things good." The nature of our business is communicative. If we're not listening to the response to what we put out there to make sure we've gotten the right message across (in other words: making sure we get results), then we're simply not doing our job.