General Mills CMO Ivan Pollard defends his stance on how ad agencies should be compensated - and lays out what the CPG giant seeks from its agency partners

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General Mills CMO Ivan Pollard.

• General Mills' chief marketing officer Ivan Pollard defended his stance on agency compensation, acknowledging getting "quite a bit of flak" after the CPG giant kicked off its creative review.
• On a panel during Advertising Week, he insisted that he valued agencies and wanted them to make money, but that it should be contingent on the value they're creating for the client.
• General Mills came under fire from some agencies earlier this year for reportedly asking the agencies to pitch for free and relinquish control of their creative.
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When General Mills began shopping for a new creative agency this summer, some ad agencies balked at some of the company's demands.

During an Advertising Week panel on Sept. 26, General Mills' CMO Ivan Pollard once again clarified his stance on agency compensation, acknowledging he and fellow CPG company CMOs got "quite a bit of flak" for their treatment of agencies.

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In a conversation with Jon Wilkins, managing director of Accenture Interactive's creative agency Karmarama, Pollard insisted that he valued his agencies and wanted them to make money, but that it should be contingent on the value they're creating.

"I want them to make money, and in fact, I want them to make lots of money, because if they are making money and they get rewarded properly, it's because I am making money," he said. "Don't forget, our businesses also have people to protect and bottom lines and jobs to keep going."

Pollard, who for years worked for agencies including Wieden and Kennedy and Naked Communications before moving to the client side, said he favored the commission-based compensation model, where agencies are paid commissions based on the incremental value they help create, for instance.

"What occurs to me, though, is that the old model of value-based compensation is actually still the right one. I just wonder why we're not applying data and analytics to understand the value that gets created by an agency's strategic thinking or its creative... and what slice of the incremental value created needs to go back to the agency," he said.

A recent ANA report found that more advertisers were warming up to commission-based models over fee-based models. Pollard said he believed that value-based compensation was becoming easier to figure out.

General Mills, the maker of Annie's, Cheerios, and Yoplait, drew fire from some agencies when it launched a creative review and asked agencies to pitch for free and relinquish control of their creative, Adweek reported. He has responded to the criticism.

Pollard, who is among other marketers pushing for agencies to have more skin in the game, also said that agencies must work harder to win his trust, admiration, and budget.

Read More: Oreo maker Mondelez's CEO is rejecting ad agencies' normal pricing and pushing for them to have some skin in the game

Pollard said he was interested in an agency that would offer outside expertise, come up with breakthrough creative ideas that can generate business, and are grounded in data and analytics. He said marketers like himself would likely use a collection or network of agencies rather than just one.

"Big ideas, external voice, data and analytics, [turning] insights into action," he said. "It doesn't matter what sort of agency you are. That's what we're looking for."

Pollard also said his No. 1 frustration with ad agencies today is that they've given up on creativity.

"We can all knock on a personal door now, and we can get there," he said. "[But] if we can't find something compelling to say, we can't make the sale. And that long-term money doesn't go to brands."