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Media Agentschap: Gebruiksaanwijzing

CODE OF CONDUCT IN CASE OF A MEDIA AGENCY COMPETITION

Three considerations before undertaking a competition

1. Successfully developing and implementing the media strategy and/or plans of the company's brands or business strategies is the key role of the Media Agency. A long-term relationship remains the best proven way to get to great communication campaign results. Making the existing relationship work could be a better solution than looking for a new agency. Sometimes pitches are based on a sound buying policy of the advertiser who plans regular "market surveys" with all his suppliers. Before making the decision to launch a pitch, it is useful to begin with a complete internal review of the current media process:

1. The needs of the company, both existing and anticipated
2. The level of performance of current media plans versus objectives

If the outcome of this analysis is the decision to launch a pitch, it should be noted that the average duration of a pitch is three months between the decision date to launch one and the appointment of a media agency. The client should plan for an extra two months needed in order to get the team in place at the media agency.

2. There are other ways than a competition to get a new Media Agency. An alternative is to approach a Media Agency based on the advertiser's own knowledge of the market or available documentation.

3. General principles of the pitch
All pitches should be based on the rule of transparency and should be precise and identical for all the media agencies involved. It should be based on a written brief along with a timetable, which details to each agency the total sum of necessary information for its participation. The pitch should follow a formal and fair process".

Once the decision is to proceed with a pitch, and given the amount of work this generates for the invited media agencies, we recommend to all advertisers to follow up the following rules:

1. Request for Information

The advertiser who is planning to run a pitch may want to have first a general overview of all potential media agencies ahead of a short list. In such an instance, we ask the advertiser to limit the requested information in order to reduce the work of all invited media agencies. The advertiser should stipulate in such a request his key expectations in terms of intended services as well as in terms of potential conflicting accounts.

2. Short list

A short list should be "short", containing up to a maximum of 4 Agencies (3 if the incumbent Agency is not invited). Competing Agencies should be informed of the final number of participants.

3. The briefing

The brief should comprise four components:

• > The presentation of the advertiser:
  • The company
  • The products / markets / categories
  • The communication
• > The context of the pitch:
  • Analysis of the current situation
  • Objective of the pitch
  • Detailed procedure of the pitch
• > The selection criteria: they can vary according to the advertiser's objectives and will be linked to:
  • The media agency: structure, size, corporate environment, image, organization,scope of service, remuneration policy.
  • The media issues:
    • - Strategic criteria (relevance, innovation and practicality of the execution of the proposals, rationale of the recommendation, planning and buying philosophy and methods)
    • - Financial criteria (negotiation policy, ability to consolidate buying). It is worth to know that on the Belgian market, negotiations with the media are linked to each individual advertiser, based on its history of investments in the related media and follow the advertiser as basis discussion point whatever could be the new agency
    • - Technical criteria (planning and buying process and tools) and
    • - Personal criteria (the team proposed or the structure & profiles proposed, if not possible to identify precise names). It is worth to know that most advertisers have a strong preference to have in the pitch the same agency persons (pitching team) as those who will work on their business
• > The contractual commitments: to have clarity from the very beginning, it is essential to already indicate at this point what could be the modalities of cooperation to be expected, such as contract real terms, restrictions and period, specific procedures to follow...

The remuneration:
The fee of the agency can be an agency commission percentage, a flat fee (cost accounting), an hourly fee remuneration, a flexible remuneration based on the results, so called "payment by results" or a combination of these. Advertisers expect to be the only source of revenue which their agencies receive for their work, and do not condone any form of hidden rebates from the media whatsoever. Advertisers expect to benefit from all the volume/frequency discounts earned by themselves directly and from any share of such discounts earned by their agencies according to the individual merit of their business. In any case there should be total clarity and transparency for the advertiser on all the volume/frequency discounts or trading practices that exist.

4. The timing

Sufficient time must be allowed for constructive media proposals. A minimum of 4 weeks between presentation of the pitch expectations and presentation of the proposal by the media agency should be respected. For a better comprehension of the proposal it is recommended to advertisers to allow media agencies to present their proposals. Please take also into account your contractual obligations and the resignation period with the incumbent agency to start a new collaboration.

5. The remuneration

Agencies invest a lot of time and resources in a competition. The advertiser can give a financial contribution to the losing agencies, showing the commitment of the Client and recognizing the extra efforts provided by the media agencies. The level of compensation, when this has been decided, should be stated before the pitch, based on a fee and should be identical for everyone. This compensation guarantees a serious commitment to the pitch by the media agencies involved. The contribution is not expected to cover all third-party, staff and research costs. The proposed remuneration should be indicated in the pitch document.

6. The selection

The client is selecting a media partner, not a media strategy or plan. A debriefing for the non-selected media agencies is not only a matter of courtesy, but also instructive for both parties and should be encouraged.

7. Confidentiality

The media agencies as well as the client should consider all exchanged data and information strictly confidential. The proposed media strategies and / or plans, and the financial proposals as well are and remain the property of the media agency. The client will not share any such info with third parties. The media agency will not use any of the client's information with any other party. In the request for information process (RFI) the advertiser should forbid himself to ask for any information which could lead to disclose confidential information related to the other clients of the agencies (i.e. negotiation levels, net billings, etc... ).

8. The Relationship

A competition should be the start for the Client and the winning Media Agency of a long lasting and mutually satisfying relationship in order to develop and implement the company's media strategy and/or plans.

Financial breakdown

BELGIUM	TOTAL MEDIA	TV	RADIO	DAILIES + LOCAL	MAGAZINES	OUTDOOR Others
	%	%	%	%	%	%
Gross incl. additional value	---,-%	---,-%	---,-%	---,-%	---,-%	---,-%
- Valorisation	---,-%	---,-%	---,-%	---,-%	---,-%	---,-%
= Gross MDB	---,-%	---,-%	---,-%	---,-%	---,-%	---,-%
- Official ratecard advantages	---,-%	---,-%	---,-%	---,-%	---,-%	---,-%
- Additional negotiations	---,-%	---,-%	---,-%	---,-%	---,-%	---,-%
= Net (100%)	100%	100%	100%	100%	100%	100%
- Agency Commission	---,-%	---,-%	---,-%	---,-%	---,-%	---,-%
= Net Media (--,- %)	---,-%	---,-%	---,-%	---,-%	---,-%	---,-%
+ Taxes/Technical Costs	---,-%	---,-%	---,-%	---,-%	---,-%	---,-%
+ Fee Media Agency	---,-%	---,-%	---,-%	---,-%	---,-%	---,-%
= Out of pocket	---,-%	---,-%	---,-%	---,-%	---,-%	---,-%
- Agency Volume Discount	---,-%	---,-%	---,-%	---,-%	---,-%	---,-%
= Final OOP	---,-%	---,-%	---,-%	---,-%	---,-%	---,-%
vs Gross incl. Add,value	---,-%	---,-%	---,-%	---,-%	---,-%	---,-%
vs Gross MDB	---,-%	---,-%	---,-%	---,-%	---,-%	---,-%