7 May 2018
TO WHOM IT MAY CONCERN
RE: CPA POSITION ON WORKING WITH IN-HOUSE PRODUCTION COMPANIES
The members of the CPA have requested the Association put together this communique to advise the industry of our position on production companies (and other supply companies) that are owned and managed by advertising agencies.
- Members of the CPA are in unanimous agreement that they will not loan out directors represented by them to in-house production facilities in South Africa. This includes in house production entities of independent South African owned agencies as well as those that are owned by global agency groups i.e. Hogarth and Prodigious
- Members of the CPA call for full transparency when they are asked to bid on agency work. Members will ask agencies with in-house production companies if they will be bidding against their in-house facility. It is requested that agencies respond prior to briefings.
- CPA members have advised that they will not bid against in house production companies due to the conflict of interest that is inherent in this process. CPA members are happy to bid against other independent production companies provided that no more than 3 companies are invited to bid. If an agency wants to invite more than 3 bids they should advise all companies up front so that they can elect to continue with the process or decline.
- CPA members have advised that they will bid on work where the agency (or their in-house production facility) oversees post production. Production companies should, however, be informed of this at briefing and before pitching as some directors prefer not to work with in-house post. Disclosure will give these directors the option to decline the job before they pitch.Agencies are requested to desist from giving production an option to use their in-house post at briefing but then enforcing this when confirming the job. In the interest of transparency, clients should be informed that the post production is not an open bidding process and that the agency is dictating the post house and operators.If an agency is using an in-house post facility or paying post direct, the production company may charge the traditionally paid post “mark-up” as a “post supervision fee” for the director and producer to oversee the post production.
- CPA members will also bid when briefed by in-house facilities provided that they are not putting themselves or their directors forward for the same job, thereby eliminating any potential conflict of interest.
- The majority of CPA members were in agreement that they would not loan out directors on international jobs produced by in-house production companies in South Africa. While a few members are of the opinion this does not deprive independent companies of opportunities, the view of the majority was that loaning out directors to agencies undermines the international production community which stands united on this issue.
- CPA members call on agencies to be transparent in revealing to all clients and suppliers the ownership structure of in house production companies. All too often, these in-house structures have different names which may make it difficult for clients and suppliers to identify them.
- Disclosure to clients should also be applicable where agencies select a preferred post production supplier (and then insist that production companies work with them) particularly where more competitive quotes or a better end-product can be achieved by the production company. In our view this practice suppresses healthy competition in the market place and drives creative standards down. Clients have the right to know about such practices and to veto them, if necessary.
We trust this clarifies our position and request that any queries be sent to Bobby Amm, Executive Officer of the CPA, at the following address: email@example.com.
The Membership of the CPA
LIST OF AGENCY GROUPS AND IN HOUSE PRODUCTION FACILITIES
WPP / Hogarth (In House production entity)
Barrows Retail Marketing Specialists Black River FC
Code Red Communications
HeathWallace (SA) Ltd.
J. Walter Thompson
Kantar Consulting KantarMillwardBrown
Mando South Africa
Ogilvy & Mather
Ogilvy Public Relations
The Hardy Boys
The Jupiter Drawing Room
The Jupiter Drawing Room & Partners TMARC
PUBLICIST GROUPE / Prodigious (In House production entity)
Publicis Worldwide / Publicis Machine Publicis Healthcare Communication Group ARC
Saatchi & Saatchi
Starcom MediaVest Group
Fleishman Hillard OMD
McCann Health FCB
MullenLowe Group Hello Computer Octagon
Weber Shandwick 1886
AGENCIES WITH IN-HOUSE PRODUCTION FACILITIES:
To be confirmed.
- This list is the information the CPA has to date and may not be definitive.