Opponents of the agency commission system argue this system is not effective because:

Question

Quizplus · Accepted Answer

The agency commission system is based on a percentage of the client's advertising expenditures, which means that the agency receives a higher commission the more the client spends on advertising. This can create a situation where the agency is incentivized to spend more time on high-paying accounts and less time on lower-paying accounts, which can lead to a misalignment of incentives between the agency and the client. Additionally, some opponents argue that the commission system does not take into account the actual costs of media and production, which can lead to inefficiencies and a lack of transparency in the agency-client relationship.

Opponents of the Agency Commission System Argue This System Is