MarketingInsideOut.com

This according to TMZ.com:

“ABC is looking to an unlikely place to find the next big television show: Geico TV commercials. The show would revolve around three pre-historic men who must battle prejudice as they live their day-to-day lives in modern Atlanta.”

I’m sure it was a simple decision for ABC. It’s a great campaign. People love it (read the comments on TMZ).

But:

1) What if it bombs? Would it taint the effectiveness of the Geico spots?
2) I’m assuming ABC would have to pay some type of licensing fee for the concept. But my guess is The Martin Agency (the actual creators of the concept) would not get any of it. (See update below.)

The agency industry is largely governed by an hours-based work-for-hire compensation system where the client owns the ideas not the agency. Agencies typically sell their ideas based on the number of man-hours it takes to create. It’s possible Martin has a unique deal with Geico, but normally agencies don’t get to retain the rights to their work. (If you don’t know much about the challenges in agency compensation, here’s a good background article.)

The Martin Agency is a well-respected shop with terrific work. I’m sure they’re excited and flattered that their work has impacted popular culture to the point where a network wants to make a show about it. And it will certainly increase their profile in the industry. BUT…you can’t take that to the bank.

Agencies have long rued compensation arrangements that size them up by the number of man-hours they commit rather than by the success of their solutions. So some agencies are starting to push for compensation packages that are more value based. Crispin Porter’s deal with Haggar, in which the agency took an equity stake as part of its compensation, and New York-based Anomaly who has priced itself based “on the subjective theory of value” where on its client Virgin America the company will get a percentage of the revenue from the sales of an in-flight entertainment system it helped to design are among a few that have inked new types of deals.

While the compensation issue is far from resolved, progress is being made. In fact, on the agenda at the ANA Advertising Financial Management Conference in May is a session entitled “Creating a Value Based Agency Relationship” where the premise is that benefit of this type of compensation aligns the interest of the agency and the client.