Last week I spoke with my first international client and a good friend. Loved the discussion we had as I realized a major change in the industry that is happening. Let me explain.

The old model is that agencies work on behalf of their clients and use their resources to optimize added value for these clients. But the contracts between agencies and clients didn’t include a lot of incentives for the agencies to really deliver (except for CPP’s which one could argue lowered the quality of media buys). The result was/is that a large part of the R&D budget from agencies go into how to look better instead of how to be better; a subtle difference.

We know that clients and agencies are now including performance based metrics in their contracts, which I believe is appropriate (would love media owners to get on board on this trend as well). But the other change is that agencies will now optimize their own value instead of the clients value. I believe this is a win/win for both the agencies as the clients as agencies understand media better and are better able to increase value, in ways that are not even on the radar of clients (and as such haven’t been implemented – don’t do what your clients can’t understand).

I expect that performance based incentives will slowly create a better incentive for media buys to deliver quality and value instead of buying cheap. And once the demand for quality increases, so will the supply and personally I think we’ll all benefit (media, advertisers, agencies and the consumer).