Respect in Short Supply, Garfinkel Tells 4A’s

NEW YORK Lee Garfinkel blasted the ad industry for being perilously close to losing what little dignity and respect it has left during his closing remarks at the American Association of Advertising Agencies’ new-business summit on Tuesday.

One of the problems facing creatives is that clients tend to look at agencies as temporary suppliers instead of long-term partners, said Garfinkel, chairman and chief creative officer of Omnicom’s DDB in New York. He recalled a recent comment made to him by a prospective client during a pitch: “Even if you get this account, you’ll probably lose it in a year.”

Garfinkel, speaking on “It’s Not (Just) About Winning New Business, It’s Respect for The Industry,” at the Millennium Hotel in New York, where the two-day conference was held, offered a number of remedies for what’s ailing the ad world. Chief among them was his contention that advertising agencies are undercutting each other and devaluing the work they do by “giving ideas away for free.”

Garfinkel proposed what he called a “reasonable” pay scale for clients and agencies to follow: If the agency owns creative, then the client pays 10 percent plus a 10 percent usage fee; if the agency owns 50 percent of an idea, the client should pay 15 percent plus a 5 percent usage fee; and if the client owns 100 percent, then the client pays 20 percent.

“A good architect charges 20- to 25 percent, while a mediocre one charges, perhaps, nine percent,” Garfinkel said. “We shouldn’t be settling for seven percent. What does that say about how we perceive our value?”

“Prove to clients we value our ideas by charging for them,” Garfinkel said. “It’s about understanding the difference between owning an idea and renting one. Clients should pay more for owning and less for renting. If an agency invents an icon like the Pillsbury Doughboy and then the client moves to another agency, how much value can you put on the Doughboy? The guy who invented the Doughboy should get some sort or residual or usage fee.”

In an earlier speech, Andy Berlin, chief executive of WPP Group’s Berlin Cameron/Red Cell, urged agencies to be selective on the new business front and to march into pitches with a few strong, clear ideas. Shops also must be confident since “clients smell insecurity,” Berlin said.

“You will lose pitches. You will be humiliated. You may look dumb and over the hill and not ready yet,” Berlin added. “But what really is there to fear? You can’t have fear and win pitches.”

In a panel about how to answer requests for proposals, search consultants stressed the importance of having a strategy and producing a document that looks and feels consistent from top to bottom. Clients pour over the responses and can easily detect lazy thinking, unresponsiveness and sloppiness, characteristics that the panelists said were all too common.