4As’ Marla Kapowitz, EACA’s Tamara Daltroff, the ICA’s Scott Knox and the IPA’s Paul Bainsfair tell LBB’s Laura Swinton about a new global voice for agencies
Advertising, no one needs to be reminded, is a global business. Many of the challenges that creative businesses face are shared with their compadres on the other side of the world. Unsustainable pitching culture. Late-paying clients. Falling levels of trust in advertising among the public. And yet, until now, agencies have not had a global platform with which to tackle the issues that they face, whether they’re in Mexico City, Montreal, Manchester, Munich or Melbourne.
But now, the world’s agencies can come together with one voice. VoxComm marks the coming together of the ad industry’s most passionate champions from around the globe, the local industry associations. At the helm are the 4As’ Marla Kapowitz (USA), EACA’s Tamara Daltroff (Europe), the ICA’s Scott Knox (Canada) and the IPA’s Paul Bainsfair (UK). In their sights, late payment and poor pitch practices.
Since the last global financial crisis in 2008, agencies have found their expertise and creativity increasingly commoditised and treated as costs to be reduced – rather than as a value-adding service. VoxComm hopes to address that imbalance and refocus on the value that great work can bring to businesses.
“At the heart of it is an ethos for us all that we wanted to talk about agency value. And the value of marketing communications for totality. There are hurdles that get in the way of that seeing full light of day,” explains Scott.
Late payment is one such hurdle and forms the meat of VoxComm’s first release. Firms have become accustomed to pushing inequitable payment terms, delaying payment for up to six months and in some cases up to a year or longer. It’s a practice that forces agencies to act as ‘banks’ on behalf of clients and has a negative impact on both indie shops and networks.
Not all clients are guilty and some, in these challenging times, have proven to be even more supportive. According to Tamara it is important to both tackle the very worst whilst also celebrating the best as examples to other marketers. “Our member agencies came to us and told us that there are some issues out there when it comes to payment terms,” she says. “I spoke to Latvia yesterday and she told me that they are talking about payment terms of 24 months. There are examples like that; really very bad ones, and also very good examples. For instance, Italy, where they have managed to get clients to pay in advance – so there are very many positive examples too. Basically, in Italy many clients agreed to pay now for services they will be getting in a few months – when it’s much easier to do the work and when they want to advertise again.”
According to Paul, a lot of the strains and pressures felt by the wider industry would be mitigated if only brands understood the consequences and paid in a timely manner.
“Lots of the people who agencies use are sole traders and they are reliant on getting paid to pay their mortgages and put food on the table, “ he says. “I know sometimes they don’t understand the chain, sometimes they think agencies don’t want to pay them or are dragging their heels, but 99 times out of 100 it’s that the agencies aren’t getting paid on time. This whole structure breaks down if the piper doesn’t get paid to play the tune and everybody is wondering where the money is. The clients have to pay for the work that they are commissioning.”
Indeed, there’s one irony in particular that hasn’t escaped the notice of the VoxComm steering committee. Brand purpose is a popular flag for marketers to wave. Every year, firms in Fortune Global 500 spend in the region of $20bn on corporate social responsibility (CSR). The VoxComm team believes that all the sustainability, corporate responsibility and social good that entails should apply not only to the content of a business’s marketing but to how it treats its partners and suppliers.
And that idea of a sustainable, responsible and respectful business partnership also comes into play with VoxComm’s second target – poor pitch practices. And pitching is also where we can see VoxComm’s role in sharing ideas and best practices come to life.
Scott has pioneered Pitch Watchdog in Canada, taking the initiative to talk to clients about more effective and equitable approaches – something which has inspired other associations under the VoxComm umbrella. The Pitch Watchdog has engaged with 78 clients in Canada, with all but six responding positively. In his experience, most clients have been receptive to conversation and, it transpires, unaware of the seriousness of the impact of ‘cheeky’ pitching practices on agencies – and that they ultimately undermine agencies’ capacity to deliver good work.
“The thing that I’ve learned over the seven years of doing this is that it’s very rarely done out of a sense of malice, it really isn’t, because I think both sides - procurement and agency sector - haven’t properly talked to each other. This is an opportunity to say to clients, ‘let’s look at what you’re trying to achieve and look at commonality of interest’ because, ultimately, what we’ve got is a great marketing department and great brands, and great agency people who want to deliver work that works. We need to work out what that means,” says Scott. “I think it’s been truly acknowledged by both client side and agency side that the current RFP process that most deploy is not working for anybody.”
Marla says that the 4As and ANA (Association of National Advertisers) will shortly issue a joint best practice guide for pitching. And one conversation that will be relevant to agencies in all markets is the role that intermediaries or pitch consultants can play in helping or hindering progress.
“One of the challenges we still haven’t been able to tackle is how to look at search consultants being invested in the long term relationship,” she says. “The way they are compensated is to bring in an agency, find the right partner but there’s no investment in making sure that’s an enduring partnership. They get paid and it’s done. And then a few years out, a number of large multinational companies have compulsory reviews every three years so that consultant is ready and lined up at two-and-a-half years to start the whole process up again. It would be a really positive move to make sure that these consultants are invested in the long term. Many are starting to do relationship counselling, so instead of going straight to review, trying to understand where there are sources of tensions and where there is a lack of communication and to try and address it.”
Ultimately the issues with pitching and late payments need to be tackled on both a local and global level. Individual associations can educate brands in their market, but with procurement decisions and directives often coming from global finance and procurement departments, VoxComm hopes to be able to intervene here too. And an important point to note is that VoxComm has been devised as a means of pooling existing resources and not as a new monolith that would incur extra expense – the organisers are keenly aware that in a challenging economy, the last thing agencies need is to fund an infrastructure of administration and offices.
But while there’s a grown up, business imperative to VoxComm, it’s underpinned by a very personal sense of purpose and camaraderie. About two years ago, the first seeds of VoxComm started to germinate when Tamara and Paul got chatting at a meeting of EACA member agencies and realised that the agency sector was missing some sort of cohesive global voice. At Cannes that year, Tamara arranged a meeting of association heads.
“We all went around the room talking about what our challenges and opportunities were and we realised there was so much commonality that it would be much better to join forces and to recognise that we have been doing everything bottom up versus top down as a collective,” recalls Marla, who says that the four most vocal (herself, Scott, Paul and Tamara) became the steering committee. However, although the quartet has been driving things forward, VoxComm includes agency associations from all over the world, from Mexico and Brazil to Australia and Malaysia.
That steering committee, though, has also found friendship. “I found a real sense of camaraderie and endeavour when we get together as a group once a week and talk about what’s going on,” says Scott. “These three are just so clever and the industry should be really proud of having them at the top of the industry and having them as their champions. You combine that power and sense of camaraderie and amazing things can happen. Especially in this Covid-19 scenario, knowing and coalescing on some of these things is really empowering. That’s giving some real energy.”
Equally energising has been the response to VoxComm’s initial release about payment terms. “What was amazing about that was it showed that just how when you get the conversation going some real positivity can get achieved really quickly,” says Scott.
Looking forward, while the team have two clear and urgent issues to attack, but as agencies around the world contemplate the challenges that lie ahead of them post-Covid 19, VoxComm also has the potential to be a vital resource. As a global hub, it will become easier to share innovative new business models popping up in local markets with the rest of the world, as well as best practices and creative solutions.
“Given the current situation we find ourselves in, I can see a role for VoxComm as we move out of lockdown around the world,” says Paul. “We would like to be a voice that talks about how agencies have adapted positively and to the changes that we’ve been forced to confront. I think we will see some new agency models coming through – they may come from Brazil, they may come from Asia, but because of VoxComm we will be able to access them quickly in all of our markets.”