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Top 5 tips for agencies to secure fair business in 2023

By Mike Lander, Founder & CEO



Opinion article

April 14, 2023 | 6 min read

Advertisers continue to get “great value” from their agencies in a post-pandemic world, according to the findings of a recent research study. But is it really that clear cut, asks expert negotiator Mike Lander (CEO, Piscari). Here, Lander looks more closely at the findings and offers his tips on how agencies should respond in 2023.

For agencies, it's crucial for advertisers not to conflate 'fair pricing' with 'underpaying'. But how?

For agencies, it's crucial for advertisers not to conflate 'fair pricing' with 'underpaying'. But how?

In December 2022, the World Federation of Advertisers, in partnership with Observatory International, published their Global Agency Remuneration Trends report. They condensed their findings into an article published on their website, and titled it: Advertisers believe they are still getting great value from their agencies post pandemic.

Well, I guess the headline was never going to be: ‘Advertisers believe they are under-paying agencies for their creative work, enforcing horrific payment terms and encouraging their marketing procurement teams to drive any profit out of the relationship.’

The problem with these kinds of surveys, in my experience, is that they never answer the “so what” questions. For example:

So what can be done to encourage more risk taking to create more value?

So what can clients do to help prevent more agencies going-to-the-wall?

So what can be done to get procurement to focus on value creation, not purely cost-to-serve, during their negotiations?

Some of the headlines from the survey

The previous survey was done in 2018; so the idea is to see what’s changed. The respondent profile was:

  • 200 senior executives, mostly in marketing procurement roles;
  • Representing 84 companies;
  • With a total global annual ad spend of more than $136bn.

Here are some of the findings (I’ve used direct quotes from the source report):

  • “What matters is the whole remuneration ecosystem, including the speed of issuing POs and payment terms.”
  • “Procurement continues to take the lead on agency negotiations. This may be a reflection of some marketers stepping in to protect their agencies during the pandemic – and we would expect the role of procurement to rise back up significantly as the world looks towards a potential recession.”
  • “The average payment term across all disciplines is around 60 days, however, this can fail to take into account the time that some advertisers take to issue POs. With a staggering 82% of work being commissioned without POs – 80% of respondents indicate that POs follow in short order – the reality is probably longer for many. These are bad behaviours, but clients and agencies are both complicit.”
  • “Global Agency Remuneration Trends also suggests that many advertisers are also prepared to pay more to agencies that meet diversity, sustainability and talent targets. Across all three areas, there is a real desire to pay more for agencies that can truly differentiate: 64% for greater diversity, 71% for sustainability and a staggering 85% for best talent.”

My answer to the “so what” from this

So what should agencies be doing in 2023 to respond to these findings? Here are my top 5 actions to either start, or do more of in 2023:

  • This all reinforces the principle that you have to prepare your thinking around multiple variables when negotiating your agency contract, not just price.
  • The more you can differentiate, and the more evidence you can provide around ESG/DE&I, the more of a premium you'll attract.
  • Procurement will be playing a bigger role in 2023 as the recession bites - hone your negotiating skills and get a deeper understanding about procurement's needs/drivers before you enter negotiations. For example, getting a PO before work starts, and negotiating payment terms hard, is going to be increasingly important in your negotiations.
  • Be clear on what’s in and out of scope right up-front. In a recent episode of The Drum's podcast on marketing negotiations, guest Jaye Cowle (managing director, Launch) said, “If a client starts to ask for granular reporting done on a daily basis, that is outside [the scope] of what has been agreed, that's when you get into over servicing”.
  • Procurement teams are trying to focus more on value creation not simply cost. You’ve got to make it easy for them to understand your ROI and why you attract a premium price.

If you want to discuss this in more detail, have an opposing view, or simply want to connect with me, drop me a line at

Mike Lander is the CEO and founder of Piscari. We work with agency leaders to improve their negotiation skills and provide insights into how procurement professionals work.

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