Close-Up: Live Issue - Is BBH right to challenge production?

Production houses have squared up to the agency in a remuneration row. Kate Nicholson reports.

In a rare show of defiance last week, the likes of RSA Films, Blink, MJZ, Gorgeous and Partizan formed a united front against the Big Brother of advertising agencies, Bartle Bogle Hegarty.

Their dispute stems from BBH's signalled intention to cut costs for its clients by controlling its own contracts with creative suppliers, such as editors and post-production facilities, rather than going through production companies.

The production community says it needs to be free to negotiate on a job-by-job basis rather than working to fixed contracts. The result is a refusal en masse to work on BBH TV department briefs.

The production industry, via its trade body, the Advertising Producers Association, says the list of unreasonable mandates from BBH has been growing, and that this latest stipulation compromises producers' role in the editing process, as well as denying them an important source of income, the mark-up on production services.

James Studholme, the managing director of Blink, explains: "Historically, production companies have positioned themselves as creative communes and not as businesses struggling to remain viable. BBH is seeking to gain a competitive edge, to the disadvantage of our other agency clients and at the production companies' expense."

Frances Royle, the BBH head of TV, defends her agency: "As our industry's working practices evolve, it is going to be hard for third-party suppliers like production companies to face the fact that they too have to change with the times. The advertising industry has had to deal with this change, the pressure on clients has in turn put pressure on us to review our processes."

So, if the quarrel boils down to cash rather than creative control, exactly how much is at stake? A production company source says the amount is usually only in the region of £2,000, and argues that if agencies can make a portion of their income through mark-ups, why shouldn't advertising producers?

Royle disagrees: "In today's market, clients have procurement specialists and cost controllers scrutinising every pound, so obviously they are going to be interested in every saving they can make."

Although editors have been positioned as the meat in the sandwich, the bigger issue is the labyrinthine financial workings of the production process as a whole, which has singularly failed to move with the times.

With more ads being shot abroad to save money, some argue production in the UK needs to change. Ben Priest, the creative director at Rainey Kelly Campbell Roalfe/Y&R, explains: "Ad agencies and the way they work have changed beyond recognition. They have become leaner, fitter and in keeping with the 21st century. The bit that is lagging behind is TV production. It hasn't evolved and we are making ads the way we always have."

On the flip side, production companies fear that once BBH controls the purse strings, it could begin to control the entire production process, dictating which directors, editors and sound designers are used, and how much they are involved in the making of ads.

Meanwhile, the impasse continues. If BBH gets its way, other agencies may follow suit and begin to demand their own new contracts. Or perhaps Big Brother will back down. But as the situation stands, BBH has a lot of ads to make and no-one to help it make them.

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PRODUCTION TRADE BODY - Steve Davies, managing director, Advertising Producers Association

"Production companies consider editing to be an integral part of the creative process. Although money is an issue, it is, essentially, relatively nominal, considering the amount of work that can be involved.

"Directors have a contractual obligation to provide their creative opinion on the edit and need to be involved in a balanced creative debate with the agency. Production companies feel that it is naive to imagine that the restructuring of that relationship won't have a number of knock-on effects both financially and creatively. He who pays the piper calls the tune."

BBH HEAD OF TV - Frances Royle, head of TV, Bartle Bogle Hegarty

"The production companies involved have actually been adhering to our terms for many years, so we were surprised that they have now taken issue with them. They cannot expect us or our clients to rewind five years and start accepting higher costs.

"What you have to remember is that it is not our money, but our clients'. Any saving for our clients is significant. We have to account for every penny associated with the production costs.

"Negotiations do take place throughout the budgeting process. Our terms were introduced to ensure clarity for producers and production companies. And also to ensure consistency and fairness for everyone."

CREATIVE - Ewan Paterson, executive creative director, Clemmow Hornby Inge

"Exploring new and effective ways of doing things is at the heart of our industry and historically BBH has often led the way.

"I know BBH appreciates the importance of strong collaborative relationships with production companies, and, of course, this is becoming more and more important as the pressure on budgets and timings increase.

"Because the goal for us all is to turn out brilliantly crafted work for our clients, the most important thing is that any change leads to a better end product."

BBH CLIENT - Jim Hytner, brand and UK banking marketing director, Barclays Group

"Do we endorse our agency's attempt to provide better deals from third parties? Absolutely. It goes without saying. We require our agencies to be transparent in their financial dealings with us and the same goes for their suppliers.

"We are all under pressure to produce more for less. Our agencies have had to respond to this during the past few years. This has obviously started to filter down the supply chain.

"We work with BBH for the quality of its output and creative credentials but we still want value for money."

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