The peculiar algebra of agency compensation has never been simple, but it may be getting more interesting — or at least more openly discussed.

At the recent Mirren Live conference, a gathering devoted to the mechanics of agency new business, a panel of search consultants offered what amounted to a gentle corrective to marketers who believe procurement can solve everything. The consensus, stated in various ways by people who spend their days brokering these arrangements, was that the agency willing to work for the least money is rarely the agency you actually want.

"If your goal is to get this agency to do the work for the least possible number, you're going to lose in the long run," said Tom Browning, president of JLB + Partners, a search consultancy.

Meghan McDonnell, owner and president of Pile and Company, took a slightly different tack, noting that much of the groundwork on compensation happens well before a formal search begins. "The model matters less than the underlying fairness of the deal," Ms. McDonnell said, which is the kind of sentence that sounds obvious until you consider how many deals proceed without it.

The panel suggested that deliverable-based compensation — paying agencies a fixed fee for completed work rather than billing by the hour — is gaining traction. Moya Fry, vice president of strategy at Mediasense, described it as something of a "movement," and encouraged agencies to propose how they wished to be paid. "We don't often see pitches that are won on price," she said.

(One suspects this comes as news to procurement departments, though perhaps they were not in attendance.)

Duffy Humbert, a senior partner at Select Resources International, offered what may have been the afternoon's most quotable formulation: "Pricing can be negotiated. Talent can't."

Ms. McDonnell agreed. "Everyone can get to a lower cost," she said. "No one wants the D-team, shockingly."

It is the sort of observation that barely needs stating, which is of course why it needs stating so often.

Original story published in campaignlive.com: "Beyond the hourly rate: Navigating the ‘range of acceptability’ in the pitch process | Campaign US"