Trade association calls for advertising agencies to be paid when they pitch for business in an effort to stamp out unethical practices in the industry.
Agency works to quash unethical practices in advertising
The International Advertising Association (IAA) wants agencies to be paid when they lose pitches for business.
The call comes as part of an effort to stamp out widespread unethical practices in the Arab world's US$4.9 billion (Dh17.99bn) advertising industry.
Advertising and public relations (PR) agencies spend considerable amounts of time and money preparing presentations for potential new clients. But some companies are not serious when they ask such agencies to submit ideas, the UAE arm of the IAA said, citing widespread abuses of the pitching process.
The IAA yesterday issued a set of guidelines to help improve the pitching process in the Middle East and North Africa. The document was aimed at advertising agencies, media-buying groups, PR firms and their clients.
One of the major recommendations was that companies should make payments to communications agencies that lose pitches for accounts, said Lance de Masi, the president of the UAE chapter of the IAA.
"The amount should be decided rationally," said Mr de Masi. "When clients pay the losing agencies in a pitch, it [acknowledges] the investment that the agency is making," he said.
Some companies call for pitches for business under false pretences, said Mr de Masi.
"It's very easy for a client to put out business to a pitch," he said. "Sometimes it's being done simply to scare the incumbent agency, or to get a better deal … they may be out shopping for good ideas that they then use and don't pay for. There are unscrupulous things going on."
Mr de Masi said the publication of "best practice" guidelines was part of an effort to address wider unethical methods surrounding the pitching process.
"People will try to get away with just about anything they can. The deficiencies ethics-wise are important enough, substantive enough to be causing detriment to the industry," said Mr de Masi.
He emphasised there were problems with the way both communications agencies and their clients conducted business.
Communication agencies should not pitch for work they are not capable of, Mr de Masi said.
Other problems include companies favouring the lowest bidder when awarding accounts. "The cheapest is not necessarily the best," said Mr de Masi.
Reda Raad, the chief operating officer for the Middle East and North Africa region at the advertising agency TBWARAAD, said his agency would "embrace" the code of conduct set out by the IAA.
"There is a huge disparity in the number of agencies invited to a pitch and the selection method used in this region compared to other parts of the world," said Mr Raad. "The responsibility must reside with both clients and agencies alike. We applaud IAA for this long overdue code of best practices."
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