This week's Campaign has a number of different articles in response to the 'news' that Thomas Cook was 'asking' its pitching media agencies to pay £1m up front. I have not seen an official response from TC Procurement or Marketing but I did speak to someone who is aware of the process, and their only comment was that TC treat their agencies as suppliers - read into that what you want.
So for a guided tour on the articles:
Page 2 - Claire Beale leads with the headline 'Why it's time to say no to damaging fee term's'. This is about the fact that agencies often don't help themselves and likewise there are some clients that will take advantage of this. I agree with this totally and for once procurement isn't blamed !
Page 12 - Tim Williams of Ignition Consulting calls for a better way of charging that isn't link to hours, quoting examples of Coca-Cola (well documented in this blog). I am a great fan of the concept or licence fee - the client pays an one off lump sum for the agreed level of output with agreed parameters e.g. .usage for one year in the UK on TV. Kerry Glazer @ AAR said this week that they are seeing a few more examples of this happening.
Page 18 - Ian Darby has a good view then the TC pitch is running the danger of supporting a "murky and opaque world where agencies collect their wedge in the form of undeclared kick-backs from media owners". I wonder where TC stand with their incumbent agency on unbilled and AVB's ?
then finally on Page 22 - James Kydd ex Virgin Media says that he is sympathetic to TC's demands and that media agencies haven't help themselves so don't deserve much sympathy.
So a jam packed issue on this very thorny topic. I would really love to know the truth on this pitch. Let's see how it pans out.
Showing posts with label AAR. Show all posts
Showing posts with label AAR. Show all posts
16 July 2010
08 February 2010
Missive being sent
I love that word - missive, used in a friendly procurement sort of way. The 4A's in the USA have sent out a letter (aka a missive) last week to 30 major industry consultants (like the AAR, Haystack). The letter asks them to adopt contract language that reflects advertising agencies' right to retain creative ideas presented during new-business pitches.
The 4A's letter was endorsed by around 50 Madison Avenue agencies, such as JWT, Anomaly and R/GA.
Apparently there has been an increase recently in agencies complaining about clients' desire to own ideas and work shown during the new-business process. They cynically say that it is usually hidden as a clause at the very back of a 14 page NDA (that is a very long NDA).
I have heard of this happening once in a big pitch for a retailer, where the procurement folks asked if they paid a nominal pitch fee of £5k to all the losing agencies, could they have the right to own the creative work developed for the pitch !. I thought that this was not in the spirit of things (I would have offered half that - joke). Also what would the winning agency think ? We like your idea but here is one that we prepared earlier?
I have an agency at the moment asking for a similar type clause to be added into their contract (they have been appointed by the client). But they want it quite clear that for any development work taken in any potential pitch process they want to own it. I have never seen this before and it seems reasonable to me.
Do you think that this is the year of agencies being stronger about owning their IPR?
The 4A's letter was endorsed by around 50 Madison Avenue agencies, such as JWT, Anomaly and R/GA.
Apparently there has been an increase recently in agencies complaining about clients' desire to own ideas and work shown during the new-business process. They cynically say that it is usually hidden as a clause at the very back of a 14 page NDA (that is a very long NDA).
I have heard of this happening once in a big pitch for a retailer, where the procurement folks asked if they paid a nominal pitch fee of £5k to all the losing agencies, could they have the right to own the creative work developed for the pitch !. I thought that this was not in the spirit of things (I would have offered half that - joke). Also what would the winning agency think ? We like your idea but here is one that we prepared earlier?
I have an agency at the moment asking for a similar type clause to be added into their contract (they have been appointed by the client). But they want it quite clear that for any development work taken in any potential pitch process they want to own it. I have never seen this before and it seems reasonable to me.
Do you think that this is the year of agencies being stronger about owning their IPR?
22 December 2009
Another article about Procurement
Last week's issue of Marketing Week (17 December 2009) has a fairly lengthy report on Procurement, entitled 'Keep your eyes on the price'.
It starts off with how Marketing often see Procurement as the enemy. But there is a balanced view from the people that were interviewed including Julie Constable who does some work with the MCCA, and I worked with at AAR a few years ago.
If anyone wants any more detail on the article, just drop me an email. I hesitate to waste my time typing up more press about us but maybe one day, there will be less articles on our role and more centred and written from the general acceptance of our role.
New Year's resolution perhaps - that we all aim to get the positive PR machine rolling in 2010 !
It starts off with how Marketing often see Procurement as the enemy. But there is a balanced view from the people that were interviewed including Julie Constable who does some work with the MCCA, and I worked with at AAR a few years ago.
If anyone wants any more detail on the article, just drop me an email. I hesitate to waste my time typing up more press about us but maybe one day, there will be less articles on our role and more centred and written from the general acceptance of our role.
New Year's resolution perhaps - that we all aim to get the positive PR machine rolling in 2010 !
27 November 2009
Danish Pastries and Bacon Baps
Good turnout at the Iris Procurement Breakfast with very generous breakast choices ( I just had the fruit!).
Jane Dormer (Head of GB Procurement at Coca Cola) said that agencies should always look to invite their procurement clients into the agencies as soon as they are aware of the procurement person so they can understand the agency and what they are doing for the client. Totally agree. It happens as soon as a new Marketing person is appointed but not when Procurement are appointed (and we won't just look at the chocolate biscuits!).
She also touched on the new value compensation model that Coke have been rolling out globally and have just started to discuss with their UK agencies. It is about paying agencies on output / on their deliverables with zero profit. There is then a performance payment based on agreed measurement. This can be up to 30% of the agreed output level, and there are upper and lower limits on the output. I quite like the concept of paying by output and have worked with a few agencies that have used this model. My only observation is that it is the client 'dictating' the value of the output when all agencies work differently and is this bringing a degree of uniformity and standardisation into the commercial model ? Good food for thought though.
Tony Spong (Head of DM, SP & Integration (I think that is his title sorry Tony if it is not) from AAR) discussed the fact that a pitch is always a good time for the client to have a 'clear out from their garage' and use the pitch process and time to review how they work as a client. I really liked this idea as procurement can really help to evaulate ways of working and processes to make them more effectively and utlimately more efficient for all parties.
At Orange I worked with our contract publishing company - John Brown, to look at one page of amends and the costs that we had incurred. I then sent this information around to the marketing team for them to see. They could see that just by changing one word - what the impact on the timescales and the cost of doing that was. Quite powerful information.
Jane Dormer (Head of GB Procurement at Coca Cola) said that agencies should always look to invite their procurement clients into the agencies as soon as they are aware of the procurement person so they can understand the agency and what they are doing for the client. Totally agree. It happens as soon as a new Marketing person is appointed but not when Procurement are appointed (and we won't just look at the chocolate biscuits!).
She also touched on the new value compensation model that Coke have been rolling out globally and have just started to discuss with their UK agencies. It is about paying agencies on output / on their deliverables with zero profit. There is then a performance payment based on agreed measurement. This can be up to 30% of the agreed output level, and there are upper and lower limits on the output. I quite like the concept of paying by output and have worked with a few agencies that have used this model. My only observation is that it is the client 'dictating' the value of the output when all agencies work differently and is this bringing a degree of uniformity and standardisation into the commercial model ? Good food for thought though.
Tony Spong (Head of DM, SP & Integration (I think that is his title sorry Tony if it is not) from AAR) discussed the fact that a pitch is always a good time for the client to have a 'clear out from their garage' and use the pitch process and time to review how they work as a client. I really liked this idea as procurement can really help to evaulate ways of working and processes to make them more effectively and utlimately more efficient for all parties.
At Orange I worked with our contract publishing company - John Brown, to look at one page of amends and the costs that we had incurred. I then sent this information around to the marketing team for them to see. They could see that just by changing one word - what the impact on the timescales and the cost of doing that was. Quite powerful information.
25 November 2009
The replacement to Kelly's Directory
Went to the AAR End of Year Drinks party last night. It was great to see Kerry and Paul and lots of agency folk there.
Companies such as AAR (The Haystack Group and Creative Brief being the other two ones that I would also recommend) play an invaluable role in helping procurement and marketing know and keep up to date with the very complex and every changing agency market. Years ago (before the good old internet) I had to rely on Kelly's Directory (hands up who remembers that?). As Procurement we work alongside the process that they bring in managing all the commercial and contract elements of a pitch.
Companies such as AAR (The Haystack Group and Creative Brief being the other two ones that I would also recommend) play an invaluable role in helping procurement and marketing know and keep up to date with the very complex and every changing agency market. Years ago (before the good old internet) I had to rely on Kelly's Directory (hands up who remembers that?). As Procurement we work alongside the process that they bring in managing all the commercial and contract elements of a pitch.
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