Do Consultancies Have an Unfair Competitive Advantage Over Agencies?

In a July 3, 2019, commentary on Media Post, staff writer Richard Whitman raised the question of whether consultancies – Accenture in particular – were more conflicted than holding companies.

While some agencies have on occasion refused to participate in agency searches that included agencies held by the client’s auditors, WPP has reportedly declined to participate in Accenture-managed agency searches.

Accenture, as well as a few other consultancies, still provide brands with consulting services which range from in-depth audits of client’s agency contracts, pricing, scopes and processes to managing agency searches (which also gives them detailed access to confidential proposals from participating agencies) and realigning agency rosters. And now of course they all hold a number of advertising agencies and related service providers.

As agency search consultants, we have argued over the years that there is indeed a far bigger conflict of interest than agencies within a holding company offering work to competing brands.

In the case of the latter, most agencies within holding companies don’t talk to each other – nor do agencies within a network of offices unless they share an account. This is not as true, however, of media agencies despite the claims of “fire walls,” but that’s a topic for another time.

However, the conflict for consultancies, in our opinion, could rise to unfair competitive advantages over the holding companies and their agencies – whether leading a client audit or managing an agency search, they do indeed receive detailed information that agencies have provided to clients in the form of proposals, contracts, scopes, staffing plans, pricing, and reconciliations.

Despite receiving assurances that there are strict safeguards between the consulting practice and the agency practice, we’ve had a few former new business leaders from consultancies who are now at holding company digital agencies tell us that the consulting team from their former employer did indeed share such confidential information with its agency new business developers.

While this is all hearsay, it’s definitely something the 4A’s and their member agencies should investigate and develop explicit clauses in their client contracts to prevent any unfair competitive advantages by consultancies.

For the ANA, with all its efforts around media and production issues, they should also be developing standards of client ethics around agency audits and procurement to ensure unfair competitive advantages for consultancies are avoided.

And, maybe, the DOJ needs get involved in this issue as well.

Bajkowski + Partners LLC is a leading consultancy providing services to marketing and procurement teams in the areas of agency relationship management, agency search, process audits, contract and SOW development and audits, and other marketing operations related areas. For more information, please visit our website.

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When did Agencies and Vendors become banks for their Clients?

Increased pressure from brands on their agencies and vendors to extend payment windows is greater than ever

Big brands such as General Mills and Chrysler have been throwing their weight around, putting their accounts into review of which payment window terms have reached a new low – or should we say high?

Last month, General Mills’ new creative agency review reportedly demanded a payment window of 120 days. And according to a post on Digiday, “Chrysler succeeded in pushing its payment window to 180 days last fall…And around the same time…a big brand started asking for payment terms of a full year, according to the 4As, which received complaints from creative and media agencies about the terms.”

While the client in that latter situation asked agencies to “work out a deal where on paper it looked as if the agencies had agreed to payment terms of one year,” we can only assume they’re having the agencies prebill far in advance and reconcile later.

At least that’s what we work out with clients and agencies we work with, whether we’re handling a search or modernizing their agency contracts that have to include such burdensome corporate-wide payment windows that go beyond a 30-day period.

The Digiday article further reveals that some marketers requiring these abnormally long payment periods assume that agencies should get financing to cover the widening payment to expense gap. Of course the client doesn’t want to pay the financing fees. And some even use third-party invoice processing systems that charge agencies for every invoice that is submitted – non-reimbursable of course.

Thought agencies were in the business of driving brand revenue through their communications expertise, not money-lenders to clients.

We wonder if client-side staff would be okay with being paid for their services rendered 120 days out.

Definitely not.

Is this what client’s really meant by wanting agencies to be their partners?

This is just another strain in the client-agency relationship.

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Agency Search: MedStar Health Selects Doner as AOR

From AdAge by on : “MedStar Health, a healthcare provider in the Maryland and D.C. region, has picked MDC Partners’ Doner as its agency of record. The agency will oversee strategy, creative and production for the provider, which has 10 hospitals, a home health agency and more than 300 urgent care, physician practice and other care sites. The company previously worked with AB&C Creative Intelligence. Bajkowski & Partners led the search.”

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Some Agencies Don’t Want New Clients

As agency search consultants always on the lookout for those hidden gems of an agency, it seems that many don’t want to be found.

Their websites may be well-designed and easy to navigate, conveying both their unique talents and internal culture.  But the contact page is often lacking or the agency doesn’t always keep its contact list up to date with business intell service bureaus – even the free ones!

We realize small to mid sized agencies don’t always have a dedicated new business person. But no agency can survive without continually gaining new clients. So why make it so difficult for anyone to connect with you?

So, here are a few of our pet peeves – which if we have them, then it’s fairly likely so do other consultants, marketers and procurement – which you should consider and think about how your agency can avoid these pitfalls:

  1. Don’t Contact Us, We’ll Contact You – Time is always of the essence for the new business inquirer. So while you may not have a dedicated new business person, or for whatever reason you’re not providing a dedicated contact on your website, too many agencies commit these potentially fatal errors:
    • Unmonitored Email Box – Asking potential clients and agency search consultants to complete your general inquiry form is fine, but not if no one is reading the emails on a daily basis. If you use this method, it shouldn’t become a black hole where inquiries go to die.
    • No Phone Number – Really? If no one responds to our email, we may make one last ditch effort. Just one. Maybe.
  2. Whenever – We sent an email to the right person. And maybe we also left a VM. But getting back to us weeks later makes you SOL.
  3. Auto Attendant Void – We get it. You’re small but modern and no one really answers your main number. And, after a VM promising a prompt return call, you want us to leave a message – that’s never returned. Or it’s returned a few weeks later. Once we start contacting agencies, the search moves quickly and if you don’t respond within 24-48 business hours you’re just too late.
  4. We Don’t Do New Business – This must be our all-time favorite response from the person answering the main number. We realize you’ve got cheap and often inexperienced labor at the front desk, but you need to invest in a little training here!

Wake up and re-evaluate your new business efforts. Everyone at your agency should know what to do if a call or email lands on their radar.

It’s never been a better time for smaller and independent agencies to gain business from those well-known brands. Marketers are looking beyond holding company agencies, and many are indeed interested in finding that up-and-comer for either ongoing project work or AOR status (which is definitely not dead despite what you read).

So remove any roadblocks to your agency’s new business success and make it easier, not harder, for us to connect and connect quickly!

 

Bajkowski + Partners LLC is a leading consultancy providing services to marketing and procurement teams in the areas of agency relationship management, agency search, process audits, contract and SOW development and audits, and a number of other marketing resource and marketing operations related areas. For more information, please visit our website.

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