Ad­ver­tis­ing watch­dog the ACA isn’t buy­ing the ar­gu­ment by three sus­pended agen­cies jus­ti­fy­ing their fee-free pitches for the Telkom ac­count, and Telkom is sail­ing above the fray

Financial Mail - - FEATURE / MEDIA & ADVERTISING - Jeremy Maggs jmaggs@iafrica.com

Three well-known agen­cies sus­pended by the As­so­ci­a­tion for Com­mu­ni­ca­tion & Ad­ver­tis­ing (ACA) for trans­gress­ing the in­dus­try body’s code of con­duct gov­ern­ing ten­ders and pitches, are fight­ing back and ap­peal­ing the de­ci­sion.

DDB SA, Ire­land/daven­port and Wun­der­man SA were all in­volved in the R80m Telkom ac­count pitch. The busi­ness even­tu­ally went to Wpp-aligned Wun­der­man (above-the-line cre­ative and dig­i­tal mar­ket­ing), De­mo­graph­ica (di­rect mar­ket­ing) and Re­tail In­sight (re­tail and brand ac­ti­va­tions).

DDB, part of the Om­ni­com net­work, was the in­cum­bent above-the-line agency.

The three agen­cies were sanc­tioned as the ACA be­lieves the pitch was ir­reg­u­lar be­cause of the high num­ber of agen­cies (15) in­vited to par­tic­i­pate, and a de­ci­sion by Telkom not to pay a pitch fee.

But Haydn Townsend, Wun­der­man group CEO, be­lieves the ACA has got it wrong. He says Wun­der­man was sim­ply act­ing as a “doc­u­ment ven­dor” to process pa­per­work on the pitch and that an en­tirely new agency, Fluid, has been cre­ated, which draws on best prac­tice skills from a num­ber of lo­cal WPP agen­cies in­clud­ing Wun­der­man.

He be­lieves the ACA needs to de­velop new poli­cies to cater for agency net­work pitches and has of­fered to fa­cil­i­tate a dis­cus­sion be­tween WPP and ACA.

Around the world, net­work pitches are be­com­ing more pop­u­lar as large com­plex clients re­quire dif­fer­ent skills sets that a sin­gle agency of­ten can’t of­fer.

He fur­ther con­tends that global agency groups are not sub­ject to ACA sanc­tion as they are not mem­bers. The Wun­der­man agency that has been sanc­tioned, Townsend says, is a small di­rect-mar­ket­ing agency with pe­riph­eral in­volve­ment in the Telkom ac­count.

The same sit­u­a­tion it seems ap­plies to Wpp-aligned Ire­land/daven­port that was os­ten­si­bly part of the pitch be­cause of its prior tele­coms ex­pe­ri­ence, hav­ing man­aged the gi­ant Vo­da­com ac­count. It is tak­ing a softer line than Townsend, agree­ing it should not have par­tic­i­pated in a non-paid-for pitch, but says the penalty is too harsh.

All three agen­cies have been fined and their mem­ber­ship sus­pended for a year.

Ire­land/daven­port claims the penalty could have a neg­a­tive im­pact on ef­forts to trans­form, and has un­der­taken an ex­ten­sive in­ter­nal re­view of its pitch­ing pro­cesses.

Em­met O’ Han­lon, who runs DDB SA, be­lieves in­cum­bent agen­cies should be al­lowed spe­cial dis­pen­sa­tion in terms of ACA pitch rules, par­tic­u­larly on pitch fees. He says his agency had the most to lose given that 45 peo­ple work­ing on the Telkom busi­ness are now fac­ing re­trench­ment. He says he was also fac­ing hold­ing­com­pany pres­sure not to lose the busi­ness.

It seems that the agen­cies tak­ing on the ACA are in for a tough time.

ACA CEO Odette van der Haar says: “The big­gest threat to our in­dus­try is that more and more clients be­have un­fairly to­wards agen­cies dur­ing pitches. It is para­mount to the sus­tain­abil­ity of the pro­fes­sion that agen­cies stand united against these un­fair prac­tices in or­der to main­tain the value and cur­rency of the pro­fes­sion.”

Van der Haar says par­tic­i­pat­ing agen­cies essen­tially pro­vided Telkom with free in­tel­lec­tual prop­erty and that the col­lec­tive cost of the pitch ran into mil­lions of rand in time and ma­te­rial costs for the par­tic­i­pat­ing agen­cies.

She’s also not buy­ing Ire­land/daven­port’s trans­for­ma­tion ar­gu­ment, say­ing: “Small, black-owned agen­cies were in­vited to par­tic­i­pate in the Telkom pitch process with lit­tle-to-no prospect of suc­cess. The ACA would there­fore like Telkom to ex­plain why none of the smaller SA agen­cies was able to se­cure any of the busi­ness on of­fer — es­pe­cially since Telkom is such an iconic SA brand.”

Apart from telling the Fi­nan­cial Mail pre­vi­ously that the com­pany does not pay pitch fees, Telkom is stay­ing out of the fight and de­clines to com­ment.

Haydn Townsend: ACA needs to de­velop new poli­cies to cater for net­work pitches

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