Just Say No to Pay for Play

In recent weeks there have been several reports from 4A’s agencies that they have been contacted by consultants that have suggested that the consultant could get the agency into a review-HOWEVER- prior to the agency receiving the RFI/RFP the agency had to agree to pay the consultant a double digit percent of the agency’s fee if the agency got the assignment.

In each of these instances the agencies involved declined to participate.

Pay for play is a consultant conflict of interest that is not in the best interests of agencies or advertisers.

The joint ANA/AAAA “Rules Of The Road” for Agency Search Consultants notes that “Agencies should not be required to pay a fee to a search consultant in order to participate in an agency review conducted by the consultant” (To view the “Rules OF The Road” for Agency Search Consultants see the Guidance Section of Review Central or visit the 4A’s Web site’s Agency Search Information Center).

Many agencies will not participate in Pay for Play reviews and most leading agencies have policies against Pay for Play participation.

It may be a recession but that doesn’t mean that inequitable and ill advised tactics like Pay for Pay should be considered as appropriate practice by either agencies or advertisers.

How does your organization respond to Pay for Play proposals?

Tom Finneran
4A’s; EVP Agency Management Services

  1. Laurie Coots says:

    Let’s face it, we’re all being pushed to generate growth for our agencies in a tough economic climate, so it can be tempting to want to jump on what often looks like a qualified lead. After all how are these players different from the consultants that many agencies use to help them raise their profiles and open doors for first visits? Well suffice it to say that things are not always as they appear.

    Like many of you, I have been doing this for awhile and I think that I have seen about constellation of consultancy possible. For our agency, the bottom line is what is the intent and what is the business model – who is paying whom for what.

    It has been our experience, that legitimate consultants provide a wide range of services – the best of them managing agency reviews as an added value service to their clients, not as their primary bread and butter.

    As a result, legitimate consultants don’t demand a cover charge at the door – nor do they charge an agency to be in a pre-emptive consideration set for upcoming reviews. Both of these practices – as the post says, are outside the “Rule of Road” we have worked so hard to define.

    In my mind, this one is easy: focus on the work, build a reputation, proactively manage the agency profile and demonstrate why we should be on the list.

    Pay for play, hurts us all.

    Now I think I will go re-read the fine print on all those directories I have the agency listed on to make sure I am walking the walk. – LC

    • Tom Finneran says:

      4A has recently received several compliants from member agencies about a few new business consulting firms (including Agency Finder and RSW/US) that have been trolling the agency landscape with promises of getting the agency into an RFP/Review if the agency agrees to pay the consultant xx% of the agencies revenues if the agency wins the assignment—these pay for play “offers” are a clear violation of best practice rules of the road. By the way, in each of the member compliants, the agencies refused to participatein the pay for play review

      • Chuck Meyst says:

        Following our recent phone conversation, you invited this response; I thank you for that. Let me begin …

        From time to time over the years, our AgencyFinder brand and the expression “Pay to Play” have been mentioned in the same breath. The source of this misunderstanding comes from the fact that in our business model, agencies pay annual dues that support the free service we offer clients.

        Our registered agencies and registered searchers; anyone who spends time on our website; or anyone who calls and talks with our staff here in Richmond, Virginia learns that suggestions, implications or accusations that we are “pay to play” are patently untrue.

        Here’s the AgencyFinder business model:

        AgencyFinder provides clients with a quick and objective method of evaluating agency capabilities based on their needs and preferences for a marketing services partner. We also provide clients with counsel on how to conduct an effective and impartial review of the agencies who, following an introductory phone interview, indicate an interest in pitching for their business.

        This process has worked thousands of times over the past decade and resulted in agencies winning hundreds of millions of dollars in new business. It’s fast and fair. And two key principles have remained with AgencyFinder since its inception:

        CLIENTS NEVER PAY: Registered Clients (advertisers or consultants working on their behalf) NEVER pay nor have they ever paid (since inception in 1997) to receive our search & consulting services.

        AGENCIES PAY: Registered agencies pay $500 in advance to activate their record, which entitles them to receive unlimited client introductions and conduct “no obligation due-diligence” client telephone interviews every time their agency is selected by a client based on matching the client’s search parameters.

        When introduced, and if they elect to proceed as a contender (our definition), they need to pay the balance of their AgencyFinder subscription. The maximum payment in any 12-month period is capped at $5,000, for any agency of any size regardless of how many times they participate over the course of 12 months.

        Because the subscription balance is only due if and when the agency selectively decides to move forward as a contender, this arrangement is NOT pay to play. Additionally, AgencyFinder’s fees are NOT paid on each subsequent introduction, nor are they determined as a percent of agency revenue. Similarly, AgencyFinder’s fees are NOT paid when the agency gets paid.

        AgencyFinder charges a fee for service that is rendered in two steps. Step One: Inclusion in the AgencyFinder database that is searched annually by hundreds of clients looking for firms that meet their criteria for an advertising, public relations or marketing partner. Step Two: Introductions and full-access to clients conducting active searches that, in the opinion of the agency, are desirable and well within the agency’s ability to pitch, land and manage.

        The pay-to-play search consultants we’ve heard about (some of whom, in fact, are listed on the 4A’s roster of search consultants) either require agencies to pay to pitch, for consulting, portfolio reviews, post-review critiques, to input agency credentials for this or next time, to settle up on a percent of the winning agency’s receipts, or learn how to pitch from those experts.

        What is unethical about any of these practices is that those consultants are PAID by clients to conduct the search on their behalf. Collecting fees from both the agency AND the client under any circumstance constitutes double-dipping and casts doubt over the consultant’s “objectivity.”

        Maybe those consultant’s practices are evaluated differently by the clients who typically hire them. These are big clients with enormous budgets and they’re considering a select group of large and multi-national agencies. Maybe there’s justification for what they do, but these clients aren’t typical at AgencyFinder.

        To our registered searchers (clients and consultants), AgencyFinder is an alternative to “going it alone” when it comes to identifying, reviewing, selecting and inviting an advertising agency or PR firm. But beyond the online matchmaking service we provide, AgencyFinder employs experienced consultants who guide both client and agencies to keep the process ethical, efficient, cost-effective and moving quickly according to our long-established and published “best practices.”

        For the agencies registered with AgencyFinder, we’re a new business alternative. We’re an independent introductory service and matchmaker like eHarmony and Match.com, but only for marketers. Even though agencies pay for the service we provide, we’re not “partners” with them; we’re not “in business” with them, nor do we share in their risk or reward.

        Our promise to registered agencies is that the searches conducted through AgencyFinder will be fair and objective, that clients will make their decisions according to our published rules and that no favoritism will be shown one agency over another because of their relative size or the registration fees they’ve paid.

        For AgencyFinder, the negative implication of “pay to play” resolves itself when it’s clear that clients search for free; that they don’t pay us anything, ever!

        As the industry’s first and still unique matchmaker, we’ve been helping marketers for more than 13 years; to the delight and satisfaction of thousands of agencies and clients alike.

        Sincerely,

        Chuck Meyst
        Chairman & CEO
        AgencyFinder.com

  2. Glenn Sagon says:

    Let’s Change the Discussion – All Agency New Business is Pay for Play.

    Agencies complaining about “pay for play” is really laughable. Especially from an industry that literally gives away their most valuable commodity: ideas and strategy.

    It really is quite remarkable that anyone from any agency complains about pay for play. Last time I was in a review, every single agency participating were contributing spec ideas, strategy, storyboards, you name it. So what do you call that? Is that any better than a search consultant that actually includes you in an opportunity you didn’t have to pursue, didn’t know about, or wouldn’t have had a chance to participate otherwise? How valuable is it to an agency to keep a client under control during a review and ensure that every agency is treated fairly so there is a level playing field, not to mention no spec work? What’s worse – paying thousands of dollars in overhead costs for AD’s, copywriters, researchers, strategists, comp artists, etc. to pitch an account with free ideas or to enroll and pay a firm to represent your agency, advocate no spec creative and keep the review completely above-board?

    The fact is, your 4A new business report confirms that most reviews are not conducted by search consultants; they are conducted by the client. There is nothing wrong with another way of finding new business through other resources. Call them what you will, but some on-line directories, search consultants, match-makers charge significant fees and some don’t. Some are very good at controlling reviews and others are not. It really depends on ones personal and business relationship with that “consultant.” Search consultants are not the ones who have hurt our industry. They are just another resource and arguably more valuable than some industry associations that purport to offer something of value but often do not deliver. The only problem I have with search consultants are the ones that collect fees from the agency and the client. Under any circumstance, that’s double-dipping; it’s unethical and contrary to our “Rules of the Road.”

    My firm has had both good and bad experiences with search consultants. At the end of the day, its far less expensive for us to work with a really solid agency consultant who takes personal and professional interest in our firm’s success and ensures a fair review. To our firm that’s invaluable. Over the years, those consultants have helped our company grow significantly and we profited from those relationships without needing to produce an ounce of spec work.

    Now it’s time to change the discussion.

    This is not about search consultants nor should it be. The one thing that is really ruining our industry is allowing any client to solicit free ideas and free strategy. Perhaps its time for the 4A’s and rest of the industry to look more closely at the things they can do to start to change this within the culture of our industry. In actuality, everything an agency does could be called pay-for-play. We open job orders and start charging “time.” We pay for new business materials, listings, fees for organizations like the 4A’s, mailings, our own “internal” or “external” rainmaker, then golf outings with potential clients, dinners, cocktails, parties & travel. Do we not turn outside to hire pitch consultants to help us land the “big one?” You get the idea. It’s called marketing and promotional expenses.

    As agencies, it is our responsibility to focus on increasing the overall “value” of our industry if we really want to make a positive impact. I have been in this industry for 33 years and never have I seen such desperation from so many notable, global talented agencies. Maybe it’s greed, maybe ignorance. One thing that remains the same: offering spec work, and free ideas only devalues this industry and that’s the most important long term issue for all of us.

    As a former IPG agency and former board member of a prominent advertising industry association, I am embarrassed at the massive amount of free ideas I have seen offered to some of the smallest accounts in the hope that maybe that agency would be selected. All that did was make the rest of us in this industry look bad.

    So do everyone a favor – stop picking on companies that actually bring value to our industry. If an agency does not want to join an on-line directory, an industry match-maker, a search consultant – they don’t have to. No one is forcing you to participate. And for the rest of the industry agreeing to offer free ideas when in fact, every time you do, you devalue what we do , what we stand for and what we have built.

    Glenn Sagon
    CEO
    Sagon/Phior

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