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Cannes Lions 2010: I’d like to introduce a new compensation model for both agencies and clients: Michael Roth, Chairman & CEO of Interpublic Group

25-June-2010
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Cannes Lions 2010: I’d like to introduce a new compensation model for both agencies and clients: Michael Roth, Chairman & CEO of Interpublic Group

“I would like to introduce a new compensation model that will serve both agencies and clients,” said Michael Roth, Chairman & CEO of Interpublic Group (IPG), during the session ‘What’s Next for Marketing?’ on Day Five of the Cannes Lions International Advertising Festival 2010.

Roth was answering to a question by host Marcel Fenez, Global Entertainment and Media Leader, PriceWaterhouseCoopers (PWC), on what his priorities would be if Roth swapped roles with co-guest Brian Perkins, Vice President, Corporate Affairs, Johnson & Johnson.

Roth felt that clients didn’t compensate the agencies enough. “Increase our fee because we are under-paid by the clients,” Roth jokingly said when Fenez had asked the question. Earlier, too, during the course of the discussion, Roth had complained that “clients are demanding more for less”. He was open to agencies being “punished” if they didn’t do a good job and didn’t show results.

Earlier, replying to the same question, Perkins had said that he would like to make IPG, the holding company, private. “It is not just an IPG thing, I’d look at taking the holding company private,” he said. His other wish was to invest more in talent areas of creative and analytics. “I would be unified and select more talented people... I would like to double our talents,” he added.

The discussion throughout loomed largely on client-agency relationship. On the question if agencies should do away with procurement, Roth said, “Procurement isn’t going away. Nor should it go away. The larger issue is whether the client is getting the bang for his buck. And we should focus on that.” Perkins agreed with Roth on the issue.

And what were the learnings from the recession, assuming that it was over? The biggest learning for Perkins was the need to be part of emerging markets – India, China and Brazil – that were least affected by the recession. “Our brands have the courage to innovate. These brands have a great understanding of these markets,” he said. He added that it was important to maintain relationships even during the tough times. “It is a great thing to have an agency when the times are good, but it is a test of relationship in bad times. We (J&J and IPG) have had a great relationship.”

On his part, Roth said that despite the challenges, “we have to be efficient. We took the opportunity to get the right people in the right job; even though we had to lay off people. If efficiency means off-shoring, we will off-shore to serve our clients”.

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