Section 5 Q1-3


1. What does Pete Stein mean by saying that "We're all in" (para. 1)?

Now they’re earning a share of the profit from the rejiggered site, rather than working for a fee. Therefore by saying "We're all in", Pete Stain means that if profits don’t go up, there's no way for them to get their costs paid.

2. Explain the sentence "The relationship between the cost of advertising and the resulting impact on revenue has always been tenuous." (para. 2)

For a long time, ad agencies didn’t need to care about the advertising’s impact on their revenue. Because no matter how much the advertising cost, the hefty commissions paid by media buyers would sustain ad agencies.

3. Why do advertising agencies consider new strategies? What is the new compensation structure?

Because media buyers don’t pay the hefty commissions any more, which makes ad agencies’ profit margins shrivel, so this financial pressure forces advertising agencies to consider new strategies.

The new compensation structure is bonuses tied directly to the performance of the client’s product.