Is it the RFP from hell, as some media agencies view it, or a thorough document designed to insure a rigorous and informed agency search, as the client and consultant contend?
That's the debate over the RFP issued by Greensboro, N.C.-based VF Corporation's procurement office last month as part of a media agency review designed to consolidate the company's estimated $110 million media buying account, which is currently dispersed among several shops, into one.
But the demands for information in the RFP were considered so "over the top," as one agency executive put it, that at least three of the seven known agencies contacted declined to participate. Officially, the agencies, Havas' MPG, Publicis Groupe's Optimedia and independent Horizon Media, withdrew due to their current workload.
But sources said the shops bailed mainly because VF required confidential information, such as detailed pricing information negotiated for other clients for media time and space in specific publications and TV shows, as well as very specific planning and buying data from proprietary processes developed in-house. "We're just not going to give that stuff away," said one executive at an agency that is taking a pass.
What's more, even some of the agencies that remain involved have found the RFP problematic. Sources also say that remaining contenders aren't providing all the information requested due to its proprietary nature.
The company, which makes Lee and Wrangler Jeans, among other brands, also demanded "reams" of general information that agency sources said was too time-consuming to gather and had little relevance to the VF Corp. media account. One example: The company asked agencies to write about the up-front process and how they might improve on it. "It was like, tell us everything you know about everything in media in great depth and on a short, tight time table," said one executive.
Another source, at an agency that isn't participating, had one word to describe the RFP: "Insane." Another described it as "punishing."
Lastly, in addition to all the information demands, sources said a time-consuming travel itinerary was imposed as part of the process, whereby each contender's entire team was expected to spend the equivalent of between one and two weeks on the road to meet and present to key people on the VF brands—all four dozen of them. (Nautica and The North Face are also among the brands.)
"Sometimes the consultants in a review can drive you crazy," said one executive involved, noting that a consultant was not leading the search. "But [VF] really needs a consultant to teach them how to write an RFP."
Actually, there is a consultant involved— Joanne Davis, although her role in the process is limited to that of an "of-counsel" advisor to VF's Kim McMillon, a senior-level procurement officer who is leading the media agency search. Davis didn't pen the RFP, and it was issued before she entered the process. But she's seen it and takes issue with the agency complaints.
"I think it's OK. I think it's reasonable," she said. "They are approaching it from a very thorough standpoint. If some agencies say it's too much, that's their prerogative, but I wonder if the negative comments are from agencies not qualified to do the work."
McMillon, manager for global procurement, advertising and marketing services at VF, said she was "surprised" at the comments from sources about the RFP and indicated that the feedback was "never communicated to [her]." As for those who withdrew, she said, "Those were business decisions, and we respect that. We have three finalists that are among the top global agencies, and we believe we can find the right agency partner for us."
McMillon would not confirm the finalists, but sources said they are WPP's Mediaedge:cia, Publicis' MediaVest and Omnicom's OMD. A decision is expected in November.
Sources who have reviewed the VF document insisted on anonymity, citing strongly worded nondisclosure clauses by the clothing retailer as a prerequisite for participating in the review. At the same time, the agencies say they want to talk about it because it illustrates the problems and challenges for both clients and agencies, at a time when ROI and procurement are increasingly key factors in the agency selection process.
"The procurement people are certainly much more important in the review process than a year ago," said one source. "Two years ago, they weren't involved at all. And that's a reality to be dealt with. But this [RFP] went way beyond exacting. I've never seen anything like this before."
VF certainly isn't the first client to involve its procurement office in agency searches or compensation talks. In one of the more public examples, Pfizer and Deutsch split two years ago after the two could not come to terms on a new contract. As part of the negotiations, sources said, the client asked the agency to agree to supply such information as individual salaries of top executives (rather than the more common request of an aggregate salary figure of those working on the account) and overhead that wasn't billable to clients, such as rent. (Pfizer denied at the time that it asked for such detailed financial data, but the episode sparked an industry debate over the involvement of procurement offices in compensation talks.)
John O'Connor, president of consultancy Relevant Insight Group, says that procurement offices "want to take a lead role" in the search for ad agencies. "But procurement needs to be balanced with the needs and nature of marketing. If the balance is right, you can develop a great review and be ROI-focused."
Davis said agencies should get to know the procurement process better, because it will continue to play an important role in the agency-selection process. "The agencies should stop whining about it. It's not just about saving money," she said. "It's also about adding value and optimizing things."
One agency executive countered: "It's OK to be thorough, but there has to be balance and perspective, too."