• Philippe Dominois

How Effective Is Your PRF Scheme? Here’s How to Find Out (And Make It Better)

How does your media agency get compensated for its services? More importantly, how do you make sure you’ll get the promised results from your media agency?

A performance related fee (PRF) or performance related incentive program (PRIP) model tends to be quite popular among advertisers. PRF is often the preferred model of doing work, with large companies like Coca-Cola embracing such a scheme.

From our research, we found that two-thirds of media agency contracts do have a PRF included in the remuneration model. But only a third of these PRF schemes were suited for purpose.

PRFs are meant to incentivise a media agency to deliver their best work and to penalise them in case of under-delivery or failing to deliver on their commitments. In a sense, the PRF is a kind of a carrot and stick approach. Unfortunately, PRF schemes aren’t always developed with the client’s best interest in mind.

Is your PRF model working for you? Does it deliver the best results and is there anything you can do to get it more tailored to your specific needs?

What is a PRF Scheme?