Have a look at a story on today's Brand Republic site. Apparently Thomas Cook Procurement are asking for a £1m signing on fee for their £30m media contract that is up for grabs across 4 agencies. They are asking for a significant reduction in agencies fees and at least a 10% reduction in media costs. The IPA are saying that this is very unprofessional procurement and that the agencies should pull together.
First is it true ? (MH @ TC if you read this - would you like to set the record straight?). Secondly would any other category of spend discuss with suppliers a signing on bonus ? I am sure I have heard about it before, not in marketing but in another category. Thirdly I do agree with the IPA (if this is true) that the agencies should say no if they are fundamentally disagree with the requirements of the pitch.
Any comments on this?
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Am I missing something, or can you substitute 'signing on fee' with bung?
ReplyDeleteAll seems grubby to me.
Seem to recall it being an old favourite with some big retailers, but only ever with goods for resale. Interesting idea, but perhaps a tad short-sighted - looks like a very negative way to start a relationship. Also, won't savvy bidders just amortise payment into fee structure?
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