The Brutal World Of Agency Reviews

February 25, 2007
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GRAND RAPIDS — When local advertising agency J.W. Messner was selected agency of record for the Mann-Filter USA division of German automotive supplier Mann + Hummel Group, it marked the successful conclusion of one of the advertising industry's most hallowed practices — the agency review.

When a company decides that its current agency is not satisfying its needs, or believes the market might have something better to offer, it will begin the process commonly called an agency review. For major brands, such an announcement is breaking news in the industry — the bread and butter of advertising trade publications.

"At its best, it can be extremely invigorating and you feel like you've accomplished something at the end of the day, and a happy marriage is made," said local advertising consultant Buzz Baker. "At its worst, you feel abused and robbed."

Late last year, J.W. Messner was contacted by Mann-Filter's headquarters in Portage with a request for proposals for its upcoming launch of an aftermarket filter line for U.S. model automobiles. Against a number of competitors locally and nationally, Messner pitched a comprehensive package of recommendations and campaign concepts, the result of 180 hours of work and an in-house cost of $15,000.

"Our creative department spent a lot of nights and weekends putting this together," said Mike Murphy, J.W. Messner vice president and general manager. "You have to love the work and the process. If you don't, you shouldn't be in this industry."

Luckily, this pitch was a win for Messner. But of the eight or so others it participates in each year, the majority won't be. Murphy estimates the firm's batting average at .500, a solid position for the industry.

In its successful pitches for Rubbermaid and Rayovac Batteries accounts, Grand Rapids ad shop Hanon McKendry burned a combined $400,000 in speculative creative work. Earlier this month, the firm competed in a third national brand agency review at a similar cost, and has not yet learned the result.

Often a plot line in television shows or movies, the agency review is one of the most competitive and costly solicitation processes of any industry, solely because of its requirement for hundreds to thousands of hours of unpaid work. Only on rare occasions is a nominal stipend paid for the agency's participation.

"It's the hardest part about our industry," said Bill McKendry, Hanon McKendry founder and chief creative officer. "People are so aggressive about getting new business that they go to great lengths. Try asking a doctor, lawyer or accountant to pitch work the same way. Call three architects and have them all design a building and tell them only the winner gets paid."

Every company approaches the process differently. Some, like Rubbermaid, informally invite agencies to pitch their qualifications. Others, like Mann-Filter, issue a formal RFP. Monroe, Mich., furniture retailer La-Z-Boy, currently in the midst of a review, is using a third-party consultant to choose finalists.

However the finalists are selected, common practice is to require the remaining two or three suitors to prepare sample campaigns. As these are generally done with a quick turnaround and little research, the winning work is seldom used; a new campaign is developed from scratch.

"It's become a luxury that clients can demand," said Rick Devon of Grey Matter Group in Grand Rapids. "You have to decide how much billable time you want to sink into something you might not retain or win. You spend a lot of hours trying to wow them, working with a client you don't know."

Like Grey Matter Group, Structure Interactive also tries to avoid speculative work. Director of Creative Services Charlie McGrath suggests to prospects that he instead submit a portfolio of the firm's prior work.

"We don't want to do work with no background, no meat to it," he said. "Just going in and showing three ideas on how to do a Web site or something is really a backward approach. There should be some understanding behind the work. ... You're just trying to give them what you think they're after."

Baker, who ran the Iowa affiliate of Young & Rubicam before retiring to West Michigan, said that in his experience, the speculative work is an integral part of the selection process. During his tenure at Young & Rubicam, the company beat out two significantly larger agencies, including the incumbent agency, to launch Sony Ericsson mobile phones in the U.S. It was selected because it was the only firm that did not present an alternate proposal to the client's request.

Plus, Baker said, the average agency-of-record lasts fewer than seven years, so a strong showing could open doors down the road.

The risky investment and superficial relationship are not the only concerns for agencies in the review process. Clients could steal the work outright and credit it to themselves or another agency. An agency might be included in a review to pressure an incumbent or preferred vendor to lower its price or work harder. The winner already may have been selected, with the company conducting the review as due diligence.

Still, many firms are more than happy to produce speculative work, both for agency-of-record relationships and contract assignments. At his finishing school for advertising professionals, The Polishing Center, Frank Blossom advises his students to produce speculative work for the accounts of potential employers. Likewise, lower profile agencies will aggressively pursue accounts held by global agencies.

Hanon McKendry recently won bids against New York agencies McCann Erickson (Rubbermaid) and Grey Global Group (Rayovac).

"They didn't show much work, while we went in with three complete campaigns," said McKendry. "The big ones might not waste the time, while the smaller ones are more nimble, much more aggressive. They know they can leverage those accounts into something bigger."

For the incumbent agency, the reviews can be a frustrating experience.

"If there is a review situation, a good 80 percent of the time you're going to lose the business," said Skip Lorimer, agency director of Justice & Monroe Advertising in Grand Rapids. "If it gets to that point, there usually are some deeper concerns. They want a change, and the incumbent is only there as a formality."

Clients will request a review for many reasons, most prominently the arrival of a new marketing director or management team unfamiliar with the agency of record. Other times, sales could be slumping, or the company could be outgrowing the agency. The review might be issued as a wake-up call to the incumbent, as a way for the new management to become familiar with it, or to see if there is something better or cheaper available.

Formerly creative director of Felder Communications Group, Blossom weathered one of West Michigan's most notorious agency reviews when its largest client, Old Kent Bank, dropped Felder for a Chicago firm.

"If a client is having a review, it's because they don't like what they are getting," he said. "There is not going to be an even playing field." 

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