A ‘QUANTUM LEAP’ FOR TRANSPARENCY?
Gideon Spanier reflects on the7stars becoming the first major media shop to adopt ISBA’S framework agency contract
Will other big guns follow the7stars by adopting ISBA’S framework media agency contract?
It has taken ten months, but ISBA’S framework media agency contract for advertisers has got some modest traction. Britain’s biggest independent media shop, the7stars, has become the first to announce, in a joint statement with ISBA, that it is using the tougher contract, which demands greater transparency and detail, particularly around digital trading and how agencies make money.
So far, only one client of Bountiful Cow, a recently launched agency within the7stars group, is using the contract, with some “amendments”. Jenny Biggam, co-founder of the7stars, says she is happy for other clients to follow suit and use the contract if they wish – but none have yet done so. She sees transparency as a competitive advantage.
For Phil Smith, ISBA’S new director-general, the7stars’ backing is a “hugely important first step” because there has been a virtual stalemate between the trade body for 450 UK advertisers and the IPA, which acts for agencies.
ISBA did not consult the IPA before drawing up the framework in April last year and none of the “big six” agency groups have adopted it.
Paul Bainsfair, director-general of the IPA, gave a cool response to the news that the7stars was getting involved and noted that the agency had “adapted” the contract. “We’ve always said it’s up to individual agencies to work with contracts that suit them,” he said.
Behind the scenes, the picture is more nuanced, despite ISBA’S eagerness to focus on what it called the7stars’ “quantum leap”.
Several independent agencies have adopted the contract and some ISBA members have been using it as a starting point for talks with their agencies. Andrew Stephens, founding partner at Goodstuff Communications, says it used the contract after winning ITV in a pitch managed by ISBA. VCCP Media chief executive Catherine Becker says it has been talking to ISBA about the framework, “fully supports the principles” and is “working with that contract” on a number of “future projects” with clients.
Tom Denford, chief strategy officer at ID Comms, which helped draft the framework, says the involvement of the7stars is “significant” given the agency’s size and £250m in annual billings. “That makes them bigger than some of the network agencies,” he points out.
The awkward truth for the big networks is their profit imperative may be greater than their desire for transparency. It is hard to use the ISBA contract if they don’t want to disclose how they are remunerated: for example, if they use arbitrage and other pricing benefits.
However, even some agencies that support ISBA say its framework is, as one media shop puts it, “heavily stacked in the advertiser’s favour”. Examples include not giving the agency the exclusive right to manage the client’s media spend and allowing the client the right to terminate the agency at short notice and wide powers to audit the agency. Little wonder that the7stars made “amendments”.
A leader of another independent agency said no client has suggested using the ISBA contract yet. Some of his contracts run to only a dozen pages. ISBA’S 50-page document is “a touch over the top – like a body search at a border crossing”, he says. ISBA maintains its contract is only a framework for members to adapt.
Smith believes the transparency debate will only increase, citing the attack by Procter & Gamble chief brand officer Marc Pritchard on the “murky” media supply chain, but wants a more conciliatory approach towards agencies. Bainsfair also wants a “more constructive” relationship. The challenge for the big agency groups is to stop sounding so defensive.
ISBA and the IPA were happy to agree a contract for creative agencies in 2015. The way forward may be for the two sides to look again at the media agency framework together. That requires less PR spin and more dialogue.