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ISA and AAAI join hands on speculative campaigns and pitch fees

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ISA and AAAI join hands on speculative campaigns and pitch fees

Indian Society of Advertisers (ISA) and Advertising Agencies Association of India (AAAI) have a history of working together on issues of mutual interest of their members and a significant step taken this time concerns the selection of an advertising agency that looks at aspects such as pitch fees as well.

In a letter addressed to the media, Srinivasan K Swamy, President, AAAI said, “At AAAI, we have been concerned about the increasing number of invitations that our members were receiving to participate in speculative campaign presentations. This aspect was discussed and a resolution passed at a specially convened General Body Meeting on January 11, 2006, which empowered the AAAI Executive Committee to form rules in consultation with certain sub-committee members identified at this General Body Meeting itself. After formulating the draft rules, the sub-committee members felt that it would be appropriate to have Indian Society of Advertisers (ISA) endorse this before formalising the same.”

In accordance, a formal presentation was made by AAAI to ISA on the need to contain the unproductive practice of speculative campaign presentations. ISA was appreciative of the issues involved and welcomed the idea of collectively addressing the issues.

Consequently, a letter on the process of advertising agency selection was generated. This letter, dated June 26, 2006, has been issued jointly by ISA and AAAI. This goes to both advertisers and advertising agencies who are members of the respective industry bodies. Swamy added, “You would notice that this letter looks at the issue of ‘Advertising Agency Selection’ holistically and indeed supports the aspect of pitch fee that should be paid to the competing agencies.”

To help their respective members in this regard, the ISA and AAAI have recommended guidelines to agencies and advertisers. These include the provision that advertisers could request credential presentations from as many agencies as they feel relevant. These presentations should be introductory in nature and might include case studies or samples of work the agency had done for its clients. Credential presentations should not, however, include speculative creative or strategic work developed by the agency in response to the advertiser’s brief.

Should the advertiser require a speculative presentation to aid their agency selection decision making, it may brief up to a maximum of five shortlisted agencies. The briefing should preferably be in a documented form, with supplementary verbal briefing when deemed necessary. The ideal brief should include – (a) background information; (b) the communication challenge; (c) specific expectations from the agency; and (d) the annual advertising investment level being planned.

Once briefed, the agencies would keep the information provided strictly confidential. The advertiser, at its discretion, may request a non-disclosure agreement with the agencies involved in the speculative process.

It is a good practice for the advertiser to agree, in advance, to pay the agencies a reasonable compensation to cover the out of pocket costs in creating the speculative presentation. A reasonable compensation should be negotiated between the advertiser and the agencies called for the speculative presentation.

The advertiser should inform its decision to the agencies participating in this process within two weeks of completion of the presentation process. At that time the advertiser would pay the agreed compensation to the agencies that are not selected.

The compensation for speculative presentation does not give the advertiser the right to use the ideas presented by the unsuccessful agencies, unless agreed to in writing by the agency and advertiser in advance.

The letter has been signed by both Bharat V Patel, Chairman, ISA and Srinivasan K Swamy.


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