Tuesday, June 20, 2006

Make money from ideas


Considering that a large part of my life is spent in the office, and an advertising agency at that, I spend a lot of time thinking about the business. Something that has been bothering me for a while is the way agencies get paid for their work. From a time when agencies got paid 15% commission, they are slowly moving a fee based remuneration system.

However, the fortunes of many brands have taken a huge turn for the better on the basis of one 'big idea'. To make the agencies sustainable in the long run, how about licensing ideas? This is something that seems to work well for the movie industry, Harry Potter and Star Wars being prime examples. Yeah, the agencies have to spring out the money in developing the idea, but they can license it to clients for a certain sum. Every year that the client uses the idea, the agency gets to make money on the royalty. It is just a wild idea with no thought being given to the legal, financial and business aspects.

1 Comments:

Blogger kumarmama said...

How about an ASOP or an Agency Stock Option Plan. Get allotted shares prorata to the negotiated worth of the idea and agree to a cut in the commission to say 10%. If the idea clicks and the company's shares prosper you make a packet. Otherwise keep your 10%.

- Kumarmama
300606

9:13 PM  

Post a Comment

<< Home