Although a three-year industry slump is ending, with forecasters predicting recovery for 2004, the handful of world-scale groups that dominate global advertising face a new squeeze on how much they get paid.

For as economic hardship bit, companies not only cut back how much they spent on promotion, but also changed their way of doing business with their agencies, advertising bosses and analysts say.

Instead of letting conceptually-minded marketing departments negotiate their promotions, companies (the advertisers) are increasingly putting these in the hands of their procurement departments, the ferocious guard-dogs of corporate spending.

"Up to now we discussed with marketing departments, advertising directors or even the finance department, which know how to appreciate a concept, an advertising idea," said Herve Brossard, vice-chairman of DDB Worldwide, part of Omnicom the world's biggest advertising agency owner.

"Today we talk with the procurement departments, and what they want is not a concept and a campaign, they want us to talk about the value of a team, the time spent, things like that," he said in an interview.

Rather than fading out as the economy starts to improve, this change is becoming entrenched.

Corporate cost-cutters want agencies to detail their overheads, costs per hour, and even to deduct the cost of advertising agency staff vacations from their bill.

These particular pressures exacerbate a trend over the last decade for advertisers to pay flat fees, perhaps with an incentive percentage, instead of a commission that was based on the size or reach of campaigns.

"We always discussed price with advertisers, but it so happens that this is more organised than in the past," said Maurice Levy, Chief Executive at France's Publicis, the world's number four, in a recent interview.

This means that although advertisers may give their agencies more work and may also spend more on buying ad space, agencies' revenues will not increase in the same proportion.

"Remuneration changes have been more radical than just a shift to fees... and threaten to condemn agencies to a role akin to that of contract cleaners, caterers and security," said Morgan Stanley analyst Matthew Owen in a recent report.

Another reason advertisers began to look at their agencies' books was a wish to share in their productivity gains with the arrival of digital technology, according to Alain de Pouzilhac, chief executive of France's Havas, the world's number six agency group. Also, de Pouzilhac and Brossard note, advertising agency groups have only recently become global businesses quoted on stock markets, and their shares ramped up in 1999 and 2000 along with the media and technology boom.

This may have prompted clients to compare agency groups' profit margins and stock ratings with their own and wonder if they paid their agencies too much, they say.

Over the past few years, the boom swung to bust. Agencies' share prices collapsed as advertisers pulled campaigns or cut spending plans and their revenues and profits shrank, with some reporting losses. The giants are just beginning to return to real revenue growth and repair their damaged margins.

Advertising bosses say that as the global economy improves, price pressures will ease, even if procurement departments continue to manage advertising accounts.

They also say that the overriding reason for choosing an agency remains creativity, not price. But some analysts are not sure the pressure on the agencies will ease anytime soon.

They point to heightened competition between global ad groups, which have gone through a period of intense consolidation that leaves hardly any possibilities for acquisition-led growth.

Nowadays three quarters of advertising spending across the globe transits through agencies belonging to four mega-groups -- Omnicom, Interpublic, WPP and Publicis.

Another 15 per cent goes through three mid-sized giants, Dentsu, France's Havas and Grey, leaving only 10 per cent outside the global groups.

Advertising bosses say they can still get results.

"Does the price pressure from advertisers endanger agencies' profits in the long term? The answer is no because the agencies will try to have very significant productivity gains in all sectors," said de Pouzilhac of Havas.