Agency Compensation & The Transparency Trap: Where to Draw the Line

About the Study

The marketing and advertising industry is at a crossroads. As technology reshapes how work is delivered and client expectations evolve, the conversation around agency compensation models has never been more urgent. 

To better understand how search consultants—key advisors in agency reviews and compensation frameworks—are navigating this shift, the 4As conducted a study in October 2024. Drawing on the survey, roundtable discussions and in-depth interviews, the research provides a view of the opportunities and challenges shaping consultant processes and practices.

Why This Study Matters for 4As Members
Search consultants play a unique role in shaping how clients view agency value and structure their compensation frameworks. As trusted advisors, their recommendations often carry significant weight in search, review and negotiation processes.

This study dives deeper to understand:

• Why many consultants still view deconstructing rates as essential to evaluating agency proposals and why others do not.  
• How their influence impacts the adoption — or resistance — of newer, more progressive models, including deliverables-based approaches.

Key Findings

• While some argue that deconstructing agency rates promotes accountability, the findings suggest this practice often provides limited client value and can be detrimental to the relationship. 
  
• Misaligned Focus: Overemphasis on internal cost structures risks reducing the agency’s role to “inputs” rather than a strategic partner delivering business growth.
• A Better Path Forward: There’s growing momentum toward value-based and hybrid models that recognize innovation, outcomes, and the transformative role of technology — while balancing the need for clarity and trust.

This report examines these findings, highlighting the ongoing industry debate about transparency and offering a path forward for more effective, value-based compensation approaches.