TBWA appoints Chief Compensation Officer: sign of things to come?

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Ad Age reports that ‘Omnicom Group’s TBWA/Chiat/Day has appointed Neal Grossman, a one-time certified public accountant who over 25 years at TBWA has served in various financial and strategy positions, as its first global chief compensation officer‘. This new position is over and above the Chief Financial Officer is meant to lead contract renegotiations with clients and procurement officers, and overseeing fee discussions during new-business pitches. He will develop value-based compensation models that are mutually beneficial to the agency and its clients. Phew. About time.

Over the years, agencies are dealing with procurement officers to negotiate compensation & fees, not the CMO or the CEO. Agency services are equated with raw materials, stationery and other over heads. The name of the game – ‘best price’ for the client. Unfortunately, agencies have paved their own path to arrive here.  I think TBWA’s move is a step in the right direction. As the article outlines, this role requires a unique skill set  – appreciating the value of various departments within the agency. The success of such a role depends on so many other factors though:

– it warrants a similar broad perspective from the client side too. Very often the person negotiating the price on the other side simply sees a head count and a number. A senior resource (often expensive) could be asked to be replaced by two people who would cost half that amount. The value of the senior person’s input goes unappreciated or unexplained to the client.

– does the Chief Compensation Officer have the power to veto an account on account of it being non-viable?

Either which way, an interesting move by TBWA to address an industry-level issue. Will other agencies follow suit?

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