Performance-related fees (PRFs) are variable compensation that advertisers offer agencies based on key performance indicators. In the 2023 economic landscape, with brands aiming for optimised returns, PRFs stand out as essential. They adjust to market shifts, encompass all marketing facets, and push agencies to treat businesses as top clients. This deepens relationships, as PRFs require in-depth dialogues, ensuring agencies meet their promises.

Typically, PRFs connect to productivity, agency services, and client outcomes. Although ideal PRFs reward excellence and penalise underperformance, not all include these provisions. An emerging approach rewards agencies with a "super bonus" for surpassing targets, underlining their part in driving client success.

To ensure PRFs' efficacy, both parties must manage them carefully. Regular reviews spotlight and address areas needing improvement, while contract audits verify agencies' commitment to PRF obligations.