EDITORIAL: Exclusivity comes at a price to clients

A welcome by-product of the ad industry's global consolidation was the seeming certain knowledge that it would force the world's biggest advertisers to relax their hardline and often ludicrous stance on account conflict.

After all, it was argued, how could a multinational carmaker or financial services company find a big enough network to handle its business that wasn't part of a holding company with conflicting business? Pragmatism would prevail and clients would have to relax their rules. That theory, for a time, seemed to work. Not any more.

FCB has just dropped out of the pitch for Hyundai's $160 million account in the US because of pressure from General Motors, a core client of FCB's Interpublic parent. Meanwhile, McCann-Erickson, also part of the Interpublic family, has been forced to resign Reckitt Benckiser's $300 million global account because of a clash with SC Johnson at FCB.

In many respects, clients have themselves to blame for this, as they forced agency networks to consolidate to satisfy their demands for a diverse range of marketing services. Also, as retailers become banks and a multitude of food and drink manufacturers compete for "share of throat", conflict becomes much harder to define.

Clients demand exclusivity mainly for fear of betrayal of their plans to a competitor. But there are often subtler and more emotional reasons.

All too often the demand is a "loyalty test

and a means of trying to ensure that client gets the best team for the category. But it all smacks of hypocrisy and double standards. Advertisers who insist on separate agency arrangements will happily enter into joint manufacturing and distribution agreements with rivals. And what client would be comfortable if offered leaked information about a rival from an agency source?

However, there are common-sense measures which can be taken to resolve the issue. More use could be made of non-disclosure agreements, signed by individual agency members and restricting them from working on rival business for a specific period after leaving the agency. There's also a case for saying that exclusivity agreements should be restricted to named competitors only, not complete sectors. Nor is it reasonable to prevent network offices taking conflicting business in countries where a globally aligned client isn't active.

Above all, non-compete guarantees must come at a price. Clients can no longer expect all the advantages of complete exclusivity without paying properly for them.

Topics

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus