It's been over a year in the making but the IPA, ISBA, the Marketing Communications Consultants Association and the Public Relations Consultants Association have put their heads together and come up with some tips on how to draw up solid client/agency remuneration agreements.
God knows the market needed one. After all, client companies' tendency to bring in procurement directors and or external auditors to oversee agency remuneration over the past few years has been a painful process for agencies' bottom lines. And as if that wasn't bad enough, IPG's decision last year to return agency profits made from the likes of volume deals has given clients an excuse to revisit their payment terms.
So with the life being squeezed out of agency margins, and the thorny issue of kickbacks causing embarrassment for the major agencies, any help from the relevant trade bodies should be welcome. Unfortunately, the new guidelines don't go very far towards addressing either of these important issues. Instead they supply an ABC-style guide to drawing up a contract. The ten-point checklist (page 5) is a very basic set of suggestions. Point five, for instance, appears to suggest that agreements be put in writing.
But there is more to the new guidelines than the ten points. A workshop next month will enable attendees to thrash out any problems with the guide, for instance. The event is fully booked, suggesting there's a real thirst in the market for counsel on remuneration.
And no doubt there are contracts out there that haven't changed for 20 years, and cases where a hand-shake deal was never committed to paper, so the new guidelines might help irradicate some of the industry's worst practice at a basic level.
The trade bodies are proud of the new guide. None will argue that it resolves all of the remuneration issues, but instead that it is a step in the right direction. That the guide was drawn up by clients and agencies is seen by its authors as a major coup. But it seems the price of that agreement has been ducking any of the major issues actually bothering agencies and clients. A step in the right direction it is, but that step took over a year. How long will it take before any kind of agreement over difficult issues is reached?
The answer, sadly, is that any such agreement is unlikely to emerge.
The agreement could only ever have been as strong as the various trade bodies' constituents allowed it be. And there's a distinct feeling from all parties that members would rather determine their own financial terms then have them shaped by their respective trade bodies. If the members of trade bodies really want to get value out of their annual subscriptions, they need to empower those trade bodies to make change.
What an exciting January it has been and it looks like there's more to come. Ed Morris is shunning the charms of Sir Frank Lowe and instead staying put; Paul Hammersley is doing a start-up; Mark Cadman and Russ Lidstone are moving to Euro RSCG; Jim Kelly and Robert Campbell are reuniting at United. The list goes on.
But what does all this change mean? It makes great headlines for Campaign, and the headhunters' coffers must be full to bursting point, but it's not a healthy sign for the numerous advertising agencies concerned. Media agencies, too, are experiencing change; many of their most high-profile veterans are moving on from long-held positions. However, within media there's a sense that jobs have been completed and it's time for change. Among the creative agencies things are looking, frankly, chaotic.
And if agency principals are unsettled you can bet their clients are too.
- Claire Beale is on maternity leave.