Fees

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Fees Remuneration Survey Report

• April 2009

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To energise communication agencies for a changing
future, by sharing knowledge, sharing vision and
sharing possibilities
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MCCA Fees and Remuneration Survey 2009

• This report is strictly confidential and
  restricted to participating members of the
  Marketing Communications Consultants Association
• No part of its content may be published without
  the prior written consent of the MCCA
• Every effort has been made to ensure the accuracy
  of this publication, but no liability will be
  accepted for reliance placed upon it

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• Integrated job costing and accounting
• Fee forecasting
• KPIs
• Contact management
• Improves client transparency
• Controls procurement
• Paprika Software preferred supplier to the MCCA
• www.paprika-software.com

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MCCA Fees and Remuneration Survey 2009
Methodology

• Online survey conducted March/April 2009
• All MCCA member agencies were invited by e-mail
  to take part in this survey, designed to
  benchmark methods of agency remuneration and in
  particular chargeout rates

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MCCA Fees and Remuneration Survey 2009
Methodology

• The data in this document is based on the replies
  received from 33 agencies
• In the chargeout rate section of the report the
  following sub-samples have been used and as a
  result should be treated with a degree of caution
• Total sample (Up to 5m - 19, Over 5m -11)
• London (Up to 5m -16, Over 5m - 9)
• Out of London (5)

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Chargeout Rates
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Management Summary

• Chargeout Rates
• All but three agencies indicated that they used
  chargeout rates for at least part of their
  remuneration from clients
• The average multiples applied in order to set
  rates are as follows
• Standard No. of Chargeable Hours 1637
• Overhead recovery factor 0.9
• Mark-up to achieve desired profit margin 26.5
• The multiples applied are typically reviewed on
  an annual basis
• Agencies aim to review the rates that they charge
  with clients on an annual basis
• Over the year the majority of agencies indicated
  that rates had remained static and that they
  increased slightly over the last 3 years

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Management Summary

• In the majority of instances the amount of time
  to be worked on a project is agreed in advance
  and charged on that basis. Reconciliations tend
  to be undertaken sometimes rather than on every
  occasion
• All agencies indicated that they apply discounts
  to their standard rates with an average discount
  of 22 being applied
• External bought-in costs
• All but 3 agencies indicated that they marked up
  external bought-in costs.
• Those that mark-up external costs do not always
  do so
• External bought-in costs are marked up by an
  average of 20 in a range from 5 to 43

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Management Summary

• Fees
• All but 2 agencies reported receiving income from
  project fees, with an average of 62 derived in
  this manner
• Payment by Results
• 31 of agencies reported that part of income
  through payment by results
• Those agencies indicating that they received
  income from PBR had an average of 2.4 PBR schemes
  in place, accounting for 20 of fee income

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Does your agency have a set of chargeout rates
that it uses for remuneration from clients?
Base All agencies (33)
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Key multiples applied
Base Agencies using chargeout rates (30)
13
How often do you review the competitive landscape
with regard to the multiples that you use?
Base Agencies using chargeout rates (30)
14
How often do you aim to review hourly rates with
clients?
Base Agencies using chargeout rates (30)
15
Have your hourly rates increased, remained static
or decreased over the last year?
Base Agencies using chargeout rates (30)
16
Have your hourly rates increased, remained static
or decreased over the three years?
Base Agencies using chargeout rates (30)
17
When charging clients fees that are based on
hourly rates, what proportion of them are based
on the following methods?
Base Agencies using chargeout rates (30)
18
Where the time to be spent on a project is agreed
in advance, is there a reconciliation made at the
end of a project and adjustments to the fee made?
Base Agreeing time to be spent on a project in
advance (30)
19
Average Chargeout RateClient Services
1 response only
20
Average Chargeout RateAccount Planning
1 response only
21
Average Chargeout RateCreative
1 response only
22
Average Chargeout RateDigital
1 response only
23
Average Chargeout RateStudio
1 response only
24
Average Chargeout RateCreative Services/Project
Management
1 response only
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External Bought-in Costs
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Do you mark up external bought-in costs?
Base All agencies (33)
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By what do you mark-up of external bought in
costs
Average 20
Base Mark up external bought in costs (30)
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Fees
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Do you receive any part of your agency income
from project fees?
Base All agencies (33)
30
Proportion of income received from project fees
Average 62
Base Agencies receiving income from project fees
(31)
31
Payment by Results
32
Does your agency receive any if its income from
payment by results schemes?
Base All agencies (33)
33
No. of payment by results schemes in place
Average 2.4
Base Agencies receiving income from payment by
results schemes (12)