Agencies: Campbell-Ewald, McCann-Erickson Worldwide; Leo Burnett USA; Publicis & Hal Riney; D'Arcy Masius Benton & Bowles; N.W. Ayer & Partners; Ammirati Puris Lintas; and Chisholm-Mingo Group
Old system: GM used a variety of systems for its divisions, including a risk/reward system for Saturn and commissions ranging from 9 to 12 percent of total media billings for its other marketing divisions.
New system: Generally all U.S. agencies are on a fee system with performance bonuses for meeting specific brand criteria, including consumer awareness measures for newer brands and sales success for mature brands. Agencies can risk their base compensation and profitability, but also have the potential to make more under the new system than the old one if goals are met.
Advertising budget: $1.9 billion (1998)
Ford Motor Co.
Agencies: J. Walter Thompson USA and its Ford Motor Media subsidiary; Young & Rubicam; Ogilvy & Mather; UniWorld; Mesner, Vetere Berger McNamee Schmetterer/Euro RSCG; and W.B. Doner
Old system: Ford paid its agencies on commission (Ford Division was at about 11 percent before the new contract).
New system: Ford pays agencies a flat fee plus a performance bonus. The bonus is based on criteria worked out between the agency and the Ford client it serves. Measurements include sales, Ford financial results, market share, sales and brand recognition.
Advertising budget: $943 million (1998)
Agencies: Bozell Worldwide, BBDO and its PentaCom media buying subsidiary
Old system: Chrysler paid its agencies on a combination commission and fee system, depending on the service. Special-interest agencies that run campaigns aimed at segments such as minorities or women - Don Coleman Advertising and Montemayor & Asociados - continue to be paid under the old system.
New system: Agencies are paid a flat annual fee determined at the beginning of the calendar year. A portion of the fee is tied to about a dozen performance criteria, including sales, market share and profits.
Budget: $1.3 billion (1998)
Nissan North America Inc.
Agency: Chiat Day
Old system: Nissan paid its agency on a fee-only basis with no performance clause.
New system: Chiat Day is paid on a flat fee plus a bonus tied to fiscal year sales of new models being launched this year.
Budget: $461 million (1998)
Source: Competitive Media Reporting