The success of an advertising campaign depends entirely on the client and the agency working together... and the first step to understanding each other is to design a budget that satisfies both parties. The remuneration models that we use in advertising are not static , but evolve along with the practices of the sector. In recent years we have seen how it is moving from a model based on the Scope of Work (SOW) to one based on the Scope of Value (SOV). But what does each of them consist of and what advantages does this change offer?
Do you want to know the 222 digital marketing trends and predictions that will change the landscape of our sector in 2022 ? Click here and download the free ebook that we have prepared for you with all the information. Remuneration models in advertising from the Scope of Work to the Scope of Value Remuneration models throughout history In the individual email list 1970s, advertising agencies charged for their services based on an agency commission , that is, a percentage of the investment made in media or production by the advertiser. In other words, the larger the size and scope of the campaign, the more the agency charged. In the 1990s, we moved to a remuneration model of fees (per project, annual, etc.) negotiated based on the Scope of Work , that is, on the amount of work to be done by the agency (in the next section we will see in more depth what it consists of).
This is the system that is still in force today. Finally, around 2015, the more variable fee compensation model begins to be introduced . It is the first introduction of the Scope of Value , that is, to consider the value of the work and the ROI . Currently, we see a tendency to incorporate mixed remuneration formulas. Definición: Scope of Work y Scope of Value The Scope of Work is a document that defines exactly what the client expects from the agency. It is a model that is based on the work carried out by the agency and defines the remuneration based on it. The Scope of Work document includes points such as: The objectives of the project: what do you want to achieve? Temporary planning and milestones to be achieved. The individual tasks to be performed by the agency to carry out the project. The deliverables, for example, a series of graphic pieces, a new website, etc.