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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Old Voiceover Stereotypes In Marketing Still Prevail. Why?

Research shows that female voiceovers are more generally effective when targeting women

Each year marketers spend millions on carefully crafted creative for each media channel in hopes of emotionally connecting with consumers, yet stereotypes still prevail when it comes to talent. Many articles have been written about hiring more female directors through the Free the Bid campaign, but little attention has been given to talent selection – particularly voiceovers.

In our previous client-side jobs and even today as we advise clients, there is still a prevalent belief that male voiceover talent is more effective than female VO’s. And that’s simply not true.

Research then, and still today, shows that male and female voiceover talent are equally effective. However, there can be engagement differences depending upon the product and the core audience as revealed in an article published last November in Media Village.

Author Pierre Bouvard writes, “Marketers spend millions on establishing their brands and want to know what’s driving campaign return-on-investment (ROI).  That’s where third-party companies like Nielsen come in – to connect the dots with data. In an ROI study of 500 advertising campaigns, Nielsen looked at which elements contribute to sales on all major media platforms.  By a huge margin, creative was the strongest sales driver.  It was responsible for nearly 50% of all sales lift…Women in fact prefer female voiceovers in AM/FM radio ads.”

Mr. Bouvard’s article has great data points and graphs from Nielsen that reveal just how more effective female voiceovers can be when targeting women – so give it a read.

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Five Major Holding Companies Cleared in DOJ Investigation

According to AdAge and Adweek, the Department of Justice closed its two year investigation into video production and post-production practices against five of the largest ad agency holding companies – IPG, MDC Partners, Omnicom, Publicis and WPP.

Apparently the DOJ has declined to comment on the status of its investigation which focused on whether ad agencies were awarding production business to their in-house departments over third-party providers in a ‘rigged bidding’ process.

The DOJ is still investigating media buying practices among the agencies, driven by the ANA K2 report citing serious problems that went against best practices and agency-client contracts.

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UPDATE – Media Trading Practices Under FBI Scrutiny

According to an Ad Age article posted today, the FBI has turned to the Association of National Advertisers (ANA) and its members for cooperation with an ongoing “criminal investigation into media buying practices” of service providers.

There are a number of global media buying agencies caught up in the probe, but no word on larger local players being part of the investigation.

The FBI investigation was likely the result of the ANA’s own investigation amid complaints from members about transparency and contract compliance issues on the part of media buyers and the media suppliers.

The ANA probe resulted in the issuance of a K2 report in 2016 which supported member claims of some agencies withholding cash rebates from clients as well as other transparency issues, and a new, highly detailed, media contract template as well as best practices. While media buying practices and contract terms can vary by country, problems identified in the K2 report were not limited to international markets.

ANA members are encouraged to contact the organization’s lead counsel, Reed Smith, which serves as interface between the ANA and FBI, if they believe their media agency relationships warrant further scrutiny.

There is no indication at this time as to when the FBI investigation will be completed.

 

Bajkowski + Partners LLC is a leading consultancy providing services to marketing and procurement teams including building in-house media planning and programmatic as well as in-house creative and production operations. For more information, please visit our website.

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