Advertisers who perceived high similarity between themselves and those within their advertising agency rated their agency as superior to those who felt they had less in common with agency contacts. Outcome measures examined included communication, performance, intention to remain with the agency, and defection following the departure of agency personnel. Differences based on the organizational level of the respondent emerged. Lifestyle factors of similarity were found to play an important role in perceived agency performance, lending support for deeper exploration of client traits and personality prior to the agency's assignment of personnel to a client account.
Advertising agency compensation may change dramatically in coming years as advertisers put pressure on agencies to reduce commissions and tie compensation to performance resulting from advertising campaigns. Drawing on agency theory from the economics discipline, the authors develop and test several hypotheses to address the advertising agency compensation decision. Their study provides the first comprehensive look at the prevalence of outcome-based compensation tied to performance and other compensation systems currently used among U.S. advertisers.