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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Agency Searches For Project Work On The Rise

Over the past 18-months, we’ve seen a definite increase in the number of clients asking us to facilitate agency searches for project work.

Some clients are looking to expand their agency roster brain trust, while others want to test-drive a relationship before committing to further involvement.

While the reasons are varied, there are best practices as to how these types of searches should be implemented and here are some helpful tips:

  • Clarity – The project scope, agency selection criteria, and search plan need to be clear, in written format and vetted internally. And have the proposed master services agreement, which clearly defines the relationship and terms, ready and available to share with participating agencies.
  • Brevity – The search should have a short completion cycle, no more than 4-6 weeks, and limit the number of agencies under consideration to 6 when developing the agency slate.
  • Sans RFI – Proper pre-vetting should make a full blown RFI unnecessary and for a project…good luck finding an agency wanting to complete your 30+ questions!
  • Be Social – Select 3-4 agencies from your initial roster and meet with them – in person, not by phone! Go to their offices. Chemistry and cultural alignment is key to success.
  • Spec Work?!  – Remember that this is a project, not an AOR search. Spec work is time-consuming and expensive for participating agencies, so unless you plan to pay them for it, don’t ask for it.
  • Ban FOMO – People always find an excuse as to why they need to be involved, but this is like taking your friends and family to your dates…and it actually doesn’t end well in the long run. Keep the agency selection team as small as you can make it, keeping it to those responsible for the project strategy and relationship management. If you’re an experienced and successful marketer, then you know how to make resourcing decisions. Still getting pressured? Use a RACI Matrix to manage your internal constituents’ involvement.

If you have questions or insights on conducting a project agency search, we’d love to hear from you.

 

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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Ad Agencies Under Investigation for Rigged Production Bidding Practices

According to recent articles by The Wall Street Journal and Advertising Age, the Department of Justice has launched a probe into advertising agency practices around the production bidding process. The inquiry focuses on whether or not agencies are engaging in unfair business practices in order to award more work to their own in-house production departments – potentially violating antitrust laws which prohibit price-fixing and bid-rigging.

In this alleged rigged bidding process, according to the Journal, agencies are purported to seek inflated bids Continue reading

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Choice Hotels Launches Brand Refresh

Choice Hotels Boosts Ad Budget by Double Digits, Launches Brand Refresh…New Campaign Encourages Face-to-Face Connections

Choice Hotels International is boosting its ad budget by 13% this year, as it undertakes a brand overhaul… The spot, which uses The Clash’s “Should I Stay or Should I go?” employs an approach… read more

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