Getting the Piper to Play a Better Tune: Understanding and Resolving Advertiser-Agency Conflicts

Timothy M. Devinney, Grahame R. Dowling
1999 Journal of Business-to-Business Marketing  
Like most business-to-business relationships, the interaction between an advertising agency and a client includes both common and conflicting interests. In this paper, we argue that the inherent nature of the advertising agency-client relationship creates an environment where double moral hazard prevails. Historic and existing contractual arrangements only imperfectly reflect the complexity of the connection between client and agency. This paper provides: (1) an outline of current advertising
more » ... rrent advertising agency-advertiser contractual arrangements; (2) a model of why double moral hazard is an inherent problem in the relationship between agency and client; and, (3) some normative prescriptions on how this problem can be better resolved. We also discuss how the findings in this paper relate to other types of business-to-business relationships.
doi:10.1300/j033v06n01_02 fatcat:ifkyyii6fza7foidkbmdk3y2om