From Adweek · Kendra Barnett · · 50s
Bob Lord Challenges Holdcos' FTE Pricing Models
Horizon Media CEO Bob Lord calls for end to FTE pricing models in advertising.
In brief
Horizon Media CEO Bob Lord calls for end to FTE pricing models in advertising. Horizon Media CEO Bob Lord argues that traditional FTE pricing models in advertising must be replaced by value-based compensation to drive client growth. Originally reported by Adweek.
Bob Lord's Critique
Bob Lord condemns agencies' labor-based pricing models at Smartly event.
“it's the old system: fte-based models, principal-based buying”
FTE Models Decline
Multinational advertisers using fte models dropped from 54% in 2011 to 17% by 2026.
“labor-based approaches have been the historic standard in the ad industry”
WPP's Mixed Approach
WPP uses a mixed economy of business models with labor-based time and materials.
“wpp plans to use a mixed economy of business models”
Horizon's Client Case
Horizon reduced fte by a third and tech spend by 20% for a major airline client.
“i lost the business because i was taking away from the clients marketing budget”
Client Readiness Hurdle
Publicis CEO says outcome-based pay is easier said than done for clients.
“it would be ignoring clients reality to think you can scale it to every one of them”
What Happens Next
Horizon pushes for value-based compensation to replace fte pricing models.
“we need an alternative to the big holdcos”
The big picture
Horizon Media CEO Bob Lord argues that traditional FTE pricing models in advertising must be replaced by value-based compensation to drive client growth.
