War is serious business,” says one agency executive, describing how far a shop will go to secure a new account. Since winning new business is an agency’s lifeline, the question arises: Does anything go?
The American Association of Advertising Agencies recently unveiled a set of initiatives that it hopes will help “level the playing field” in the hotly contested new business wars.
While industry executives appreciate the 4A’s efforts, which include addressing the nagging issue of speculative creative, few believe agencies will stick to any guidelines in the heat of battle.
“We’re our own worst enemy about those things, continuing to up the ante, showing more,” says Barrie Hedge, president of Angotti, Thomas, Hedge in New York.
“I applaud them for trying to bring some order to the process.”
“The problem on the ad agency side is … there’s always somebody who is going to try to spend more or do more,” says New York-based consultant Arthur Einstein. “It becomes a snowball going downhill. I don’t think guidelines are going to do anything about that.”
The 4A’s, however, thinks differently. First, the industry trade group will draw up a standard agency questionnaire for use during early stages of a review. Second, it is conducting a survey of its members in order to draw up a set of guidelines that would better define the various levels of spec work and its cost.
“Management at a large number of our ad agencies felt [they got] the short end of the stick in the search process,” says Burtch Drake, president and chief executive officer of the 4A’s. “It’s enormously time consuming and expensive.”
At present, sources say spec creative can make up approximately 40 percent of an agency’s review expenditures, which can generally range from $75,000 to upward of $1 million, and is seen in one of three ways: as a tool for selecting an agency, a necessary evil or a waste of time and money.
“We want to define [spec]. Now it’s more about who spends the most,” says Cleve Langton, director of business development worldwide at DDB Needham and chairman of the year-old 4A’s New Business Committee. “Most of the money spent on a pitch walks out the door in the last two or three days prior to the presentation. We’re spending money like a bunch of drunken sailors trying to dress it all up. Logic goes flying out the window, as well as the cost.”
“As competitive as we are, there are issues we all face in new business,” adds Langton. “We didn’t know what the clients wanted.”
Until now. The 4A’s surveyed 53 leading advertisers and 28 agency search consultants. It’s no surprise these two groups differed in opinion. When asked to rate the value of spec creative in the selection process, 68 percent of advertisers surveyed said they feel it is a useful or necessary tool. Yet 64 percent of the consultants said spec should be prohibited, isn’t useful or is neutral to the process. “Advertisers need spec creative,” says Drake, who insists it isn’t going away.
Moreover, the definition of spec varies. According to the survey, 36 percent of the advertisers said they viewed it as creative concepts, while 33 percent said they expected to see storyboards and 12 percent defined it as semifinished visuals. Only 19 percent said spec was strategy and case history.
The semantic debate raged among consultants as well: 36 percent defined spec as storyboards, 33 percent as semifinished visuals and 15 percent as creative concepts. The surveys also determined that advertisers felt three to four weeks was sufficient to
create spec work.
Given the diversity of opinion, the 4A’s hopes the guidelines help ease the pain of production and streamline financial outlays. Determining the cost of producing spec work may alleviate spiraling costs agencies face in pitches. “When an advertiser is contemplating doing spec creative, there will be a better understanding of what it might cost the agency,” says Drake.
Clearly, based on responses to the surveys, there are no hard-and-fast rules about compensation. In the best-case scenarios, clients comp agencies for their new business expenses anywhere from $2,000 to upward of $250,000, depending on account size.
Should there be a limit on how much agencies spend on spec work? Fifty-two percent of consultants surveyed said yes, though 16 percent said it would be difficult to enforce. While the 4A’s hopes the guidelines will inspire manageable standard practices, the group says its role is not to enforce the parameters, but to offer suggestions to agencies, clients and consultants. Results from the surveys show that advertisers and consultants welcome the effort.
A whopping 91 percent of advertisers surveyed that use consultants said they support the 4A’s developing guidelines that agency search consultants would follow; 64 percent of consultants surveyed said they encourage the 4A’s to develop a list of consultants who have agreed in writing to follow the guidelines.
Still, most agencies prefer to be judged on the merit of their strategic thinking and past work rather than on work produced in a new business review. “My problem with spec creative is that a lot of times it is an artificial way to create advertising,” says Lee Garfinkel, co-chairman and chief creative officer at Lowe & Partners/SMS, New York. “You are asked to solve problems that are years in the making within weeks, problems that neither the client nor the previous agency has been able to solve for years.”
If less emphasis was placed on spec creative, more time and money could be spent on devising strategies for clients. “Separating [creative and strategy] keeps us intellectually honest,” says Ty Montague, creative director of Bartle Bogle Hegarty in New York, which refuses to present spec creative. “It means you can’t use creative as a crutch for a weak strategy. It results in advertising that is more effective.”
Critics of spec creative say it can lead to poor choices by the client, who can be
dazzled by the presentation, not the ideas. “I’ve gone through enough reviews to know that asking an agency to do spec work is ridiculous,” says Steve Davis, vice president of marketing at Heineken USA, who hired Lowe & Partners/SMS based on its strategic thinking. “I’ve been in situations where an agency was able to strike lighting with the creative spec project. Then you find out six months down the road they were a one-hit wonder.”
It will be up to the ad industry to “stop the madness,” as one agency executive says. “Would everybody adhere?” asks Rick Boyko, co-president of Ogilvy & Mather, New York. “As soon as one agency dances outside the cards, you throw it all up in the air again.”