Latest News »News Archive
Integrated: MCCA announces retention rates are down
MCCA Survey - retention rates down
In its new 2006 fees and remuneration survey, the Marketing Communication Consultants Association (MCCA) has revealed a significant rise in project accounts at the expense of agency retainers.
The study, commissioned by the MCCA on an annual basis, compiled results from 26 member agencies. 40 per cent of respondents replied that the volume of project accounts had increased whilst 36 per cent disclosed that the proportion of income from projects had increased significantly over the past three years.
In a further confirmation of the trend, the MCCA survey revealed that agencies now typically receive 68 per cent of their income from project fees with only 32 per cent originating from retainers.
Alongside the increase in project accounts, the MCCA survey found that 60 per cent of agencies had kept their hourly rates static over the previous twelve months. In a further reflection of commercial pressures, 46 per cent of agencies reporting that hourly rates had actually remained static or declined for three years or more.
Additionally, 46 per cent of agencies indicated that they received at least part of their income from payment by result schemes, with four respondents indicating that PBR put profits at risk. PBR percentages averaged a minimum of 12 per cent and an average maximum of 22 per cent.
Graham Kemp, Chairman of the MCCA, says: "The 2006 MCCA fees and remuneration survey shows clearly the financial pressures that agencies now face with the increase of project accounts being of particular concern. Agencies can only give clients solid advice and creative excellence if they are able to devote time to understand the client's business - project accounts undermine this process. Agencies must persuade clients to see the benefit of long term partnerships and, as an industry collective, we need to have confidence to demand them."
19 December 2006