As seen in this month’s DC Communicator Newsletter, our very own Carolyn Myles, Senior Partner:
We’ve heard some grumbling recently about the age-old problem of “agency reviews” and asked veteran columnist Carolyn Myles to check it out. Her report follows:
An agency review is similar to an ancient arranged marriage. One side —the bride’s family—spends a lot of time presenting credentials to impress the groom. Unfortunately, the bride doesn’t learn too much about the groom until after the marriage. In fact, she may not know anything about him at all. In a review, the agency spends a lot of time chasing after a client, touting their history and experience to impress the prospective client. And, sometimes, the client is like the groom’s family: they don’t reveal any information, such as their budget, scope of work or past history. Maybe they are abusive or are looking at other “brides.”
Most clients are legitimately seeking an agency. But there are shady practices which drive agency heads crazy, such as: holding a review to shake-up the current agency; shopping around to see what different services cost; seeing what ideas agencies come up with and then executing them in-house. Mike August, principal of August, Lang, Husak, said agencies often will get a “letter of participation” and asked to fill out a dance card, but that the outcome is pre-ordained. “Clients don’t understand the wear and tear, money and other resources that go into responding to an RFP,” August said. Cary Hatch, president of MDB Communications, said even on a relatively small account, it is not unusual for her firm to spend $25,000 to $50,000 in out-of-pockets expenses. “And, we’re burning the midnight oil because we have to continue to service our other clients,” she added. Hatch pointed to the American Association of Advertising Agencies’ web site (www.AAAAgencySearch.com), a rich resource for both agencies and clients entering into the new business arena, including “A Marketers Guide to Best Practices and Processes for Finding a New Agency.” The site addresses questions and practices both sides need to consider.
Hatch added just as agencies are asked to sign non-disclosure agreements, so should prospective clients sign a similar document to protect agency’s intellectual property.
Another nasty practice is the old “bait and switch.” The prospect will give a budget, but after you win the account, the budget suddenly changes – usually down.
This happened to David Fuscus of Xenophone Strategies, who participated in a five-agency review last year Fuscus, president and CEO, said he estimates the participation cost him between $20,000 and $25,000 in time and resources. He won the business. But the first question out of the client’s mouth was, “What can you do to raise money from our members” to cover the campaign? Now he asks what budget is in place.
Fuscus was on the client side when with the American Transport Association. He often conducted agency searches. The $1 million account would be honed to four or five agencies, each which was paid $5000 in order to own the ideas. His biggest regret was the number of agencies they started with: 25.
Agency heads are in disagreement with whether or not the stipend is a good idea. MDB always retains the rights to their creative product. Many agencies copyright their proposals.
But, can you enforce a copyright?
Colburn Aker, managing partner of The Aker Partners and an attorney, said, “Yes and no.
“It depends on how unique the idea is. The concept has to be judged creative and unique to your agency,” he said. “Not many PR activities fall into that category.”
While a copyright can be a deterrent it won’t stop people who plan to break the law and, for an agency, the cost of litigation is a deterrent, he added. However, the threat of litigation may place an agency in a negotiating position with a client. A client may pay an agency to withdraw a petition, giving the agency “something, which is better than nothing.”
But the overall perfect marriage should start with a fair courtship. The client should seek firms that have expertise in their field and hone the list down to a few select agencies, at most five. Check their reputation, referrals, web sites or references Agencies should request an opportunity to speak with the prospect to determine how serious they are or if the chemistry exists to enable a good match.
Aker suggested asking to present the proposal in person. And agencies should never find themselves presenting to anyone but the decision-maker or, at the very least, a top officer in the organization. “You are wasting your time telling a go-between or junior staffer about your agency’s credentials,” he said.
MDB’s Hatch warned, “You have to scrutinize the opportunity vs. the potential, whether you’re selected or not. Our currency is our ideas. When we put them out there in the RFP process, we want to know that the other party is going to conduct themselves in an honorable way, just like they want to be treated. “