How do advertising agencies respond to incentives? Perceptions of creativity in competitive account reviews and pay-for-performance compensation

In advertising development, two common management practices are formal account reviews and remunerating the agency based on performance. Given the centrality of intrinsic motivation in creative processes, understanding the agency perspective of these practices is important. Indeed, the efficacy of these practices upon creative outcomes is being questioned by practitioners and remains under-researched. This article presents a mediation model of how the use of formal account reviews influences creativity. The authors also present a moderation model of how pay-for-performance only works when trust is low already. Clients willing to explore creative options and trust their agencies receive benefits beyond the economic contract.