4A’s Tackles ‘Pay for Play’ Fees

Guidelines Welcomed, But Will Agencies Follow Them?
NEW YORK–The American Association of Advertising Agencies is recommending new guidelines in an effort to curb its member agencies’ payments to search consultants and to lessen the burden of speculative
creative work in pitches.
The guidelines encourage agencies to avoid “pay for play,” that is, paying consultants to be included in pitches. They also urge agencies to demand compensation for costly spec work and to use the 4A’s standard questionnaire–released in April–when submitting information to consultants and prospective clients.
O. Burtch Drake, president and CEO of the 4A’s, said there is a growing number of consultants who charge fees to both agencies and clients alike. That growing trend apparently goaded the normally reserved 4A’s to take action.
This represents the first time the 4A’s has issued specific recommendations regarding spec creative and consultant fees.
“We estimate the cost [per agency] is $30,000-50,000 a year in fees that you have to pay to these operations,” said Drake.
He added that the guidelines are meant to be informal standards to support members. “Many of our members don’t want to take this issue on individually,” he said. “Who wants to be on the wrong side of a search consultant? So we have these guidelines, but in terms of enforcing them, there is no way.”
Since the 4A’s cannot enforce the guidelines, it will be up to the agencies to adopt or ignore them.
“I think it can be enforced as long as agencies enforce it,” said Mike Marsak of Effective Marketing Strategies in Marina del Rey, Calif. “Unless everybody agrees to it, it’s just words on a piece of paper.”
Asked if the guidelines were a warning to consultants to back off, Joanne Davis, a member of the 4A’s new-business committee and a managing partner at Bozell Worldwide, replied: “It’s a way to help teach and educate agencies that you don’t have to be afraid to say no. And it’s a way to guide and inform [everyone].”
Peter Drakoulias, director of business development at Deutsch, said that, overall, “It’s good that we’re taking a stand and trying to implement something. It’s about time.”
In 1997, the 4A’s issued a number of new-business recommendations, which included urging agencies to withhold proprietary information such as financials and warning consultants to avoid creating conflicts of interest by soliciting compensation from both clients and agencies [Adweek, Oct. 6, 1997].
–with staff reports