BEST PRACTICE

IN AGENCY*
SEARCH & SELECTION
“The Guide for Choosing the
Right Marketing Communications Partner”
A Report by
Sark & Reynolds Management Consultants

Commissioned by © The Institute of Communications and Advertising

2300 Yonge Street, Suite 3002-Box 2350, Toronto, Ontario M4P 1E4 CANADA
Telephone: 416-482-1396 www.icacanada.ca

*Agency here is shorthand for full service advertising agency, or its constituent parts whether owned or
independent such as marketing/creative consultancy, media management company and all other marketing
Agencies such as CRM / Internet / Direct / PR / Sales Promotion, etc.

All rights reserved. No part of this publication may be reproduced or transmitted in a any form or by any
means, electronic or mechanical including photography, recording or any information storage or retrieval
system without prior permission in writing from the publishers.
ICA BEST PRACTICE IN AGENCY SEARCH AND SELECTION

TABLE OF CONTENTS
Contents Page #
Introduction 4
About the Authors 5
Overview 6
The ICA Agency Search Service - a Process Snapshot 7

Chapter 1 8
Search vs. Reconciliation The Value of Performance Reviews
Mediation
Chapter 2 10
Getting Started Determining The Decision Making Team
Defining The Scope of Work
Chapter 3 12
The Search Process 3.1 Stage 1 – Preparation
3.2 Stage 2 – Expressions of Interest
3.3 Stage 3 – Choosing The Short List
3.4 Stage 4 – Agency Visits
3.5 Stage 5 – Capability Presentation (Optional)
3.6 Stage 6– Work Session (Optional)
3.7 The Downside of Speculative Work
3.8 Confidentiality & Rights Of Ownership
3.9 Stage 7 – Final Selection
Chapter 4 33
Agency Remuneration & Agreements Memorandum Of Understanding
The Advertiser/Agency Agreement
Exhibits 36
1 ICA Scope of Work Checklists
2 Initial Questionnaire
3 Initial Credentials Submission Rating
4 Agency Visits Meeting Agenda
5 Agency Visits Rating
6 Credentials Presentation Ratings
7 Work Session Ratings
8 Mutual Confidentiality Agreement
9 The ICA Agency Search Service

2
ACKNOWLEDGEMENTS
The authors are grateful for the support, guidance and insights that have helped to create this
report.

We would like to acknowledge and thank the following organizations and publications:

• Advertising Age
• American Association of Advertising Agencies (AAAA)
• Association of Canadian Advertisers (ACA)
• Association of National Advertisers (ANA)
• Campaign
• Institute of Communications and Advertising (ICA)
• Institute of Practitioners in Advertising (IPA)
• KPMG
• Marketing Magazine
• Sark & Reynolds
• The Direct Marketing Association (DMA)
• The Incorporated Society of British Advertisers (ISBA)
• The Marketing Communication Consultants Association (MCAA)
• The Public Relations Consultants Association (PRCA)

We would also like to thank the following individuals who provided us with their inputs and
perspectives on this Best Practice report:

• Marsha Andrews, Nova Scotia Tourism

• W.A. Band (Boston, MA)
• Robert Clarkson, Carlson Marketing Group Canada Ltd. (Mississauga, ON)
• O. Burtch Drake, AAAA (New York, NY)
• Barbara Fraser, American Express Financial Advisors (Toronto, ON)
• Stephen Graham, CIBC (Toronto, ON)
• Mary Lee Keane, New York American Marketing Association (New York, NY)
• Hamish Pringle, IPA (London, UK)
• Lauren Richards, Cossette Media (Toronto, ON)
• Nancy L. Salz (New York, NY)
• Eymbert Vandeering, Shell Canada Projects
• David Wethey, Agency Assessments (London, UK)

3
INTRODUCTION

This report is built on the three core determinants to making the right choice in a
communications partners. These can be summarized in three questions:

1. Can they do the job well?

2. Do we have the right fit?

3. Do we work well together?

In business, it is getting more and more difficult to rely on the “hard” advantage of having a
product or service that is a “better mousetrap”. As product improvements are matched, winning
brands are those that manage “every point of contact” with the customer better than their
competitors. This is why brand-building and persuasive communications1 are so important. The
pressure to get the most out of every communication dollar increases day by day. So having the
right marketing communications partner is one of your most critical business decisions.2

This guide is about finding the right partner, as effectively and efficiently as possible. It is based
on four main sources.

• Best practice in Canada, the US and the UK. For Canada, we used our collective
experience. For the US, our sources were Selecting an Advertising Agency, by the US
Association of National Advertisers, and Guidelines for the Pursuit of New Business by
the American Association of Advertising Agencies. For the UK, it was The Guide, a
comprehensive joint-industry publication on Agency search, selection and relationship
management.
• Input from leading professionals in all three countries. We cross-referenced this
published learning against current expert opinion in all three countries—in marketing,
advertising, and search-consulting.
• The learning from the ICA Search Service, custom-designed for Canada.
• The learning from the Sark & Reynolds Agency search practice. The approaches and
methodology represent real world learning and have been validated in actual searches
for companies looking for marketing communications partners in advertising, promotion
and media.

While this report has been sponsored by the ICA, we want to underline that it addresses the
needs of Advertisers and Agencies—based on our conviction that partnership is the best model
for building businesses and building brands.

Adrian Sark. Dan Reynolds.

1
Persuasive Communication is not a very elegant term, but we need something broader than advertising.
2
This document applies to all disciplines: Agencies, direct and interactive marketing, promotion, public relations,
media management, event marketing etc. We use the word “agency” to describe “marketing communications
partner” for convenience.

4
 ABOUT THE AUTHORS
Sark & Reynolds

Sark and Reynolds has a unique perspective on Agency search, based upon their experience in
Client marketing, Agency management and their core search consulting practice. The Partners
have also created policy and position papers for both the Association of Canadian Advertisers
and the Institute of Communications and Advertising. As such, both Dan and Adrian have an
intimate knowledge of the advertising and marketing communications industries, and a clear
perspective on the key issues such as remuneration, contract, staff and structure, workflow
process and systems and procedures.

The two partners established their marketing consultancy in 1996. They have been involved in
dozens of searches, have negotiated service and remuneration agreements in both public and
private companies, and managed numerous Agency relationships. Sark & Reynolds has worked
with over 60 Client companies and Advertising Agencies in Canada and the U.S. for the past
eight years.

Adrian Sark has nearly 30 years of senior marketing experience as a Client, was
Director and Chair of the Association of Canadian Advertisers (1990-1995) and
has been a management consultant for over 5 years. Beginning in 1972, Adrian
worked for Procter & Gamble in Canada and Europe in brand management; as
Director of Marketing for PepsiCo International; as Vice President, Marketing for
Canada Systems Group; and as Vice President, Marketing at Hershey Canada
Inc. In addition to his marketing and management roles, Adrian has made an
important contribution to advertising, as a founding member of the CASSIES – the awards that
require winners to write a case which includes proof of effectiveness. Since 1996, Adrian has
devoted his attention to advising Clients in government, entertainment, technology and
consumer goods on strategy, marketing and business planning.

Dan Reynolds has nearly 30 years experience, equally divided between senior
Agency experience and Client side marketing and consulting. For the past 12
years, he has been a consultant in Canada and the US, working with over 60
marketing companies and advertising Agencies. Dan has also worked
extensively with the Institute of Communications and Advertising, helping to
create policy positions. Dan’s career began in brand management in 1972 at
Gillette, transferring to the Agency world five years later. This led to experience
on the General Foods brands at MacLaren; Vice President at DMB&B on the Procter & Gamble
business; Management Supervisor and Worldwide Account Director at Foote, Cone & Belding
responsible for a major technology account in six countries; Senior Vice President, Director of
Client Services at Saatchi & Saatchi. In 1985, Dan became Director, Advertising & Promotion
for Petro-Canada, where he worked extensively on corporate strategy, positioning and the
image of that company. He established his marketing and communications consultancy in 1989.

5
OVERVIEW
“Perhaps we should look at changing the Agency.”

These eight words can send you on an exhilarating journey, or a game of snakes & ladders that
leaves you worse off than when you started. They can also cause you to re-examine the
situation, realize that your best solution is a new relationship, but with the same Agency.

On the surface, selecting a communications partner may seem similar to hiring a key employee
or contracting a valued supplier. However, making the RIGHT DECISION is much more
complex, interpretative and risk laden. It is an important and critical business decision that will
impact on a company’s sales, brand equity, positioning and customer franchise.

Considering what is at stake, Agency searches are alarmingly haphazard. We’re publishing this
guide to change that and help understand why so many searches are less than ideal. It traces to
an unholy trinity that is in nobody’s interest:

• Doing things quickly, at the expense of doing them correctly.

• Not foreseeing the consequences of a poor search - potentially devastating in wasted
time, effort, money, and damage to your brands.
• Hard-to-manage behaviour caused by the thrill of the chase.

We commissioned Sark & Reynolds to conduct a wide-ranging investigation in Canada, the US,
and the UK. This is to supplement our own ICA Search Service.3

In an ideal world, current relationships flourish. But sometimes a change is for the best. This led
to our objective:

To give advertisers a best-practice guide for finding a new Agency

(if a new Agency is indeed what they need).

Jani Yates
Executive Vice President

3
This is an alternative to doing the search yourself, and is described in full at www.agencysearch.ca. It is
summarized in Exhibit 9 of this report.

6
 THE ICA BEST PRACTICE IN AGENCY SEARCH AND SELECTION

A PROCESS SNAPSHOT

The full process is described later, but the following schematic will give the reader a picture of
the steps required.

Note that it can require as many as seven separate and distinct stages or as few as five,
depending on the complexity of your needs, the differentiation of the Agencies, and the opinions
of your Selection Committee.

In some cases the decision can be made after the Agency Visits. In others, either by virtue of
the Advertiser’s size or other factors, a Capabilities Presentation or a Work Session is required
before the final decision can be made.

Stage 1 Stage 2 Stage 3 Stage 4

Preparation Expressions of Choosing The Agency Visits

Defining requirements,
Interest Short List
process and milestones Visit short-listed
Contacting Agencies Review credentials & Agencies; review
(broad or narrow focus) questionnaire chemistry

Stage 5 (Optional) Stage 6 (Optional)

Ratings
Capabilities Work Session
and/or
Presentation Strategic problem
solving to assess
Formal presentations chemistry and thinking
by finalist candidates ability

Stage 7
Final Decision

Final vote by Search

Committee; move to
contract terms

7
CHAPTER 1. SEARCH vs. RECONCILIATION
Determining whether a search is required or if the current relationship can be fixed.

If you do not have an Agency, this is a relatively simple decision. But if you do, you should
determine if the relationship is irretrievably broken. It may be better to fix it than assume the
risks of making a change. That said, the reasons to start a search include:

• A Client conflict emerges.

• Your needs have changed significantly, and the incumbent can’t meet them.
• You’ve given the Agency a fair chance to fix what’s wrong, and they haven’t.
• There is an irresolvable conflict.
• Critical constituencies (dealers, franchisees etc.) have lost confidence.
• You disagree at a fundamental level about your business and brands. No partnership can
succeed when the partners are at loggerheads.

The main reasons to try fixing the problem (rather than searching for a new agency) are:

• A search puts tremendous demands on the company at all levels—diverting effort that could
be spent better on the business.
• There will inevitably be some loss of momentum and forward progress on the brand.
• Though no-one likes to admit it, there is the risk of making a poor selection. This can lead to
bad morale, and bad publicity.
• With a new Agency, some brand history is always lost, despite the effort invested in bringing
them up to speed.
• The new Agency takes time to get up to maximum operational effectiveness and efficiency.
• It is an irony of the communication business that when things are not going well, Advertisers
typically feel they have made their feelings abundantly clear. Agencies, on the other hand,
are often blissfully unaware. When they realize the seriousness of the situation, Agencies
are typically highly motivated to find a solution.
• There is always the risk that the new advertising direction will not build brand equity.
• It is possible that the agency received insufficient direction/briefing/information. In this case
changing the agency will not solve the problem.

Mutual Performance Reviews

The main way to head off problems before they start is to have a regular, open, candid, mutual
(both ways) performance review. See Client/Agency Evaluation – a Guide to Best Practice,
available from the ICA free of charge, or from www.icacanada.ca under ICA Publications.4 The
situation can also be retrieved by mediation. The ICA can provide information on the top
professionals in this field.

4
Also see the UK’s Joint Industry Guidelines on Agency Search, Selection and Relationship Management published
by the consortium of The Incorporated Society of British Advertisers (ISBA), The Institute of Practitioners in
Advertising (IPA), The Marketing Communication Consultants Association (MCCA), The Public Relations
Consultants Association (PRCA), and the Direct Marketing Association (DMA).

8
The Value of Mutual Performance Reviews
Annual Advertiser/Agency Mutual Performance Reviews are key to successful partnerships and
longevity. There are numerous cases where mutual performance reviews are not used - even in
companies with sophisticated ‘management by objective’ evaluation systems for their own staff.
Professional Advertiser managers and their Agencies should be doing at least an annual
performance review to highlight any potential problems at an early stage so that the appropriate
remedial action can be taken quickly and good performance is recorded to ensure that credit is
given.

Advertisers experiencing dissatisfaction with their current Agency relationships are arguably the
most important group when it comes to instituting mutual performance reviews. An effective
channel of two-way communication is necessary to nurture any relationship.

The Institute for Practitioners in Advertising (the UK industry body) points out that
Advertiser/Agency problems fall into one or more of the following areas:

• Ineffective work for the brand or company; poor performance in the market; brand objectives
not being achieved; lack of adequate return on investment.
• Financial problems - cost over-runs against budget; invoices with inadequate descriptions or
justification; perceptions of poor value for money (from the Advertiser) and poor profitability
(from the Agency).
• Lack of proactivity from the Agency; not enough new ideas and initiatives; a seeming
unawareness of competitive activity; a sense of detachment from the Advertiser’s market
sector and customers.
• Chemistry problems with key personnel on the Agency team leading to ‘distancing’ and poor
relationships.
• Breakdown of trust; perceived conflict problems with other Advertisers of the Agency.

As the Advertiser/Agency relationship is a people business, problems such as those cited can
often be resolved through changes of personnel with an existing Agency rather than changing
the Agency altogether.

Mediation
Where the relationship can be described as ‘difficult’, many Advertiser/Agency partners choose
to use a third-party intermediary to help conduct performance reviews or to help resolve
relationship, performance or other problems. There are generally two sides to every story, and
the value of the relationship requires due diligence before Agency change is instituted. A third
party can provide objective advice and insulate the parties from each other as the fact-finding
proceeds. As long as the Advertiser is not committed to an Agency search, both parties should
share the cost of mediation equally.

The ICA can assist clients and agencies in identifying expert assistance in mediation.

9
CHAPTER 2. GETTING STARTED
If all avenues toward salvaging the current relationship have been exhausted, and there
is a clear decision to implement a search, then there is a significant amount of planning,
preparation and management of expectations required before the search begins.

The Decision-Making Team/Selection Committee

Generally, a search needs a Team Leader, a Search Committee and Logistical support.
It also needs a mandate from senior management.
• Mandate – Senior management may not want to be involved in the detailed process, but it is
essential that they sign off on the search. Given the significant effect on the business (pro
and con) they should also be involved in the key milestones, including the identification of
what the company needs, the short-list decision, and the final decision.
• Team Leader – Usually the senior marketing or advertising manager who led the decision to
start a search. The leader sets the tone of a fair and open process, and acts as point person
for the participating Agencies. (It is not best practice to delegate this to a junior.) The leader
coordinates activities, and reports status to company stakeholders. The leader decides on
process, timetables and evaluation criteria—and usually acts as the external spokesperson.
• Search Committee – They screen candidates, visit Agencies to assess capabilities, attend
presentations, rate performance, and participate in the final decision. Committee members
represent those who will work with the Agency, dealers/franchisees where appropriate, and
perhaps stakeholders such as Public Affairs or Human Relations. A group of 4-7 seems to
be best. Going much beyond this tends to become unwieldy.
• Logistics – The workload should not be under-estimated. It includes developing all materials
needed for the search, scheduling meetings, answering Agency questions, handling Agency
submissions, booking presentation rooms, arranging equipment, ordering refreshments, etc.

Defining The Scope Of Work

You only want to explore qualified Agencies. So the starting point is to define what you need. As
already outlined, the overall search is guided by the answer to three core questions:

1. Can they do the job well?

2. Is there a good fit?
3. Will we work well together?

The scope of work is the first step in determining whether the Agency “can do the job” well.
Typically, you want a combination of strategic and executional ability against many skill sets.
This covers a wide range of possibilities, and in a partnership model, you and the Agency will
have different roles. Exhibit 1 is a template to help you put this in perspective. It helps you
define:

• The functional areas that are important to you

• The Agency’s role in each of these areas
• The quantity/frequency of work needed

10
Filling out this template can be revealing. It can uncover divergent internal views as to what the
company really needs. When completed, it helps crystallize what the company is looking for.5

Management of Expectations
A comprehensive Agency search will require a significant dedication of the Advertiser’s time,
energy and resources. The overall time required will be in the order of 2-4 months. Members of
the Advertiser Selection Committee must be available to attend ALL the meetings, read ALL the
Agency submissions and participate FULLY in the selection process. A Rule of Thumb for each
member of the Selection Committee is to spend between 5 and 10 days on the process - to
completion.

5
Exhibit 1 is suitable for most searches.

11
CHAPTER 3. THE SEARCH PROCESS Stage 1

3.1 Stage 1 – Advance Preparation (2-3 Weeks) Preparation

Defining requirements,
Comprehensive advance preparation and organization is process and milestones
absolutely essential for a successful Agency search.

-------------------------------------------------------------------------------------------------------------------------------

Define The Process

Overall Decision Making Milestones Logistics

All Agencies or restricted; Selection Committee, key Key decision points; Internal contact, media
Steps e.g., Capabilities, decision-makers, timetable; management of relations, meeting rooms
Strategic Exercise, consultant role? the search
Creative, Media Contact

Requirements Definition

Services needed – Geography, brands, length of contract, billings,

conflicts

Agency
Contact Plan

Overall Search Guidelines: The Advertiser determines if the search is to be broadly conducted
(any Agency may apply) or whether the search will operate with a restricted list, contacting only
those Agencies who are judged to fulfill minimum criteria (e.g., size, capabilities, skill sets,
sector expertise, etc.). Generally, broad searches are done as a matter of course in the public
sector where governments wish to ensure there is a level playing field, and by some private
sector firms who do not have an Agency.

A decision should also be made as to the process i.e., whether the decision will require an
assessment of capabilities only, or whether a Work Session exercise might be required in the
event of a tie between two equally qualified Agencies or whether “paid for” assignments could
be included. This enables the Advertiser to tell participating Agencies about all the steps of the
process up front, managing their expectations so that they enter the competition with a full
understanding of the scope and scale of the requirements.

Decision-Making: Identify the key decision-makers and stakeholders and define a Selection
Committee that will make the ultimate decision. The Advertiser should decide at this stage if an
outside Consultant is to be used.

12
Milestones/Timetable: Establish the process in detail and target dates against each element;
identify those elements that will require Committee involvement. Begin to book blocks of time
with the Selection Committee for key meetings.

Having agreed the plan with the Search Committee, the Team Leader outlines it to all team
members, so that they know the meeting schedule and the demands on their time. This is very
important not only for senior players, but also for the logistics team, who will come under heavy
pressure. The rough timetable following demonstrates that an Agency search may require from
8 to 16 weeks (or longer) to complete, depending upon the number of stages that are required
to reach a final decision:

STAGE TIME ESTIMATE (WEEKS)

Stage 1 - Preparation 2-3
Stage 2 – Expressions Of Interest 2
Stage 3 – Choosing The Long List 2-3
Stage 4 – Visits/Due Diligence 1-2
Stage 5 – Capabilities Presentation (optional) 2
Stage 6 – Work Session (optional) 2-3
Stage 7 – Final Decision 1
TOTAL 8-16 weeks

Logistics Support: There are a host of organizational, support and communications issues that
will need to be addressed over the course of the search process. One person at the
Advertiser’s offices need to be responsible for logistics, coordinating meetings, answering
questions from participating Agencies, organizing meeting rooms, booking equipment,
organizing coffee, etc. In addition, the Advertiser needs to have a plan to field questions from
the media, since inevitably the word will leak out, no matter what precautions are taken.

Requirements Definition: The Advertiser should develop a brief description of the Agency
requirements. The search should also indicate whether all services (bundled) are to be provided
by a single supplier, or whether independent specialist communication companies (unbundled)
are permitted. A rating system for Agency submissions should be established at this stage,
identifying each area of requirement, and the basis of Agency remuneration should also be
outlined, and provided.

Important elements here are:

• Services Required - e.g. Creative, Media, CRM, PR, etc. (bundled or unbundled)
• Geography – Is the assignment global, national or local? Language capabilities?
• Location – Must the Agency be close by?
• AOR – Full service, creative only, media management, etc.
• Size – Where will you rank? Big assignments generally need larger Agencies.
• Conflicts – You do not want candidates with an obvious conflict, but equally you do
not want to be so exclusionary that you deny yourselves the best candidates. There
are various ways to alleviate conflict issues. Are these acceptable to you? Establish
the parameters.

13
 • Budget Size – There may be good reason to consolidate the Agency service at a
single shop for small or medium size budgets.
• Category Expertise – This is often a requirement (packaged goods, banking, retail
etc.) but from time to time an Advertiser wants to break away from conventional
thinking, and look for fresh eyes.

In addition to the functional requirements, there are also qualitative considerations that are
valuable in evaluating candidate agencies. These are the areas of ‘skill sets’ and ‘agency
culture/personality’:

Defining The Skill Sets

Experience has identified the following:
• Strategic Skills – Probe for the Agency’s contribution.
• Creative Skills – Beyond the Agency’s creative reel, look for insight and imagination
in all aspects of problem-solving.
• Media Skills – Strategic, Planning, Buying, Direct Response, Online expertise.
• Process Skills – Making things happen effectively, on time and on budget.
• Proactivity – Identifying new opportunities. Going beyond the expected.
• People Skills – Finding the right culture, relationship and DNA fit.
• A Track-Record – Look beyond the impression, and probe for results.
• Administrative Skills – billing, reporting and attention to detail.

These are sufficient for most searches, but if you need a more detailed checklist see the
templates in the ICA’s Client/Agency Evaluation – A Guide To Best Practice at
www.icacanada.ca.

Defining the Right Fit Culture and Personality

This generally ranks low in the early stages of a search, when the focus is on capabilities,
skills and experience. However, as the search enters the final stages, chemistry becomes
critical. The AAAA puts chemistry at #13 when assembling a long list of candidates,
but #1 for the final decision. Salz has similar findings in her review of US Advertiser-
Agency relations.6

In preparing evaluation forms, it can be hard to describe the components of “right fit” in
words. It seems that this is not needed, however. Fit is to a large degree instinctive, and the
decision-makers usually have the experience to make this assessment (aided, of course, by
reference checks.)

Considering Outside Assistance

You can do a search entirely in-house, but many people who have done this now see the
benefit of outside help. The decision will depend very much on the complexity of the project, and
your comfort factor with the internal resources. In Canada, in addition to ICA’s Search Service
already mentioned, a small coterie of individuals and organizations provide search service
among other consulting services. Benefits to consider are:
• Insider knowledge, experience and perspectives.
• Third-party objectivity and credibility, and a level playing field.

6
Salz, N.L. 2003 Payment by Results - The Salz Survey of Advertiser-Agency Relations, Nancy L. Salz, New York

14
• A well-run project. Internally-run projects start with high hopes, but can be side-tracked by
the pressures of business and lack of experience.
• Knowledgeable and informed opinions and perspectives on the candidates.
• A mediating voice if controversial issues arise.
• Offloading of organization and logistics.
• Getting information about the candidates that is not evident in “best behaviour” meetings.
• Helping direct the decision beyond the short list, and finalizing critical issues related to
contract negotiation.

In terms of outside assistance, there are two main options:

a) The ICA Agency Search Service. This is summarized in Exhibit 9.

The ICA has conducted over 100 searches for advertisers and the service is free except
for a nominal administrative fee. For more information contact or Jani Yates (416) 482-1396
or visit the ICA search website at www.agencysearch.ca.
b) Professional Search Consultants
Costs for full service for Stages 1 through 6 costs could be expected in the $10,000 to
$40,000 range. Detailed contractual negotiation (beyond the ‘heads of agreement’ in the
Memorandum of Understanding) would be incremental to this. Costs for more limited
involvement would, of course, be lower.

Management consultants, recruitment firms, and independent consultants all can offer search
assistance, but it is not their exclusive business in Canada. This does raise a possibility (real or
perceptual) of conflict of interest, in that these firms often have Agencies among their clientele.
Recruitment companies who work with Agencies often have exclusive relationships in terms of
staff recruitment. This can create at least the perception of conflict of interest, and jeopardize
the objectivity and credibility of the search process. Consultants should be asked to sign an
agreement that includes their warranty of no vested interest.

Confidentiality
Searches often attract attention from the media/trade press. Usually, the Advertiser and the
Agencies will both want to avoid media coverage until a search is complete. Advertisers should
demand confidentiality, though some leakage has to be planned for.7 All participating Agencies
should be required to sign a confidentiality agreement. The team leader will usually be the
external spokesperson, and should issue ‘no comment’ to media inquiries.

There is also the issue of what to say to the incumbent Agency.

Best practice, unequivocally, is to notify them ahead of any search. Quite apart from being
good business etiquette, it is virtually impossible to keep such news secret.8 This raises the
question of whether the incumbent should be invited. There are delicate issues to deal with, and
best practice needs to be tough-minded.

7
In the typical RFP process, the Client is identified at a very early stage, and the Client can be inundated with
queries and requests. In the ICA process all the initial screening is done “blind.” Clients only reveal their identity to
the 5 – 6 Agencies they decide to short-list.
8
The ICA will not institute a search until the incumbent is informed.

15
3.2 Stage 2 – Screening for Expressions of Interest (2 weeks)
Stage 2

Developing a long list of candidate Agencies who have the skills, Expressions of
capabilities and experience that is required. Interest

Contacting Agencies
(broad or narrow focus)

-------------------------------------------------------------------------------------------------------------------------------
Contact Plan
Direct solicitation of interest of agencies

Agency Expressions Of Interest

Written response to the Contact Plan. Client decides the Long List.

Selecting the Long List of Candidates

Briefing Package
to a Long List.

The Contact Plan

You are looking for expressions of interest from viable candidates, without being overwhelmed
by inappropriate applicants. Deciding upon which Agencies to ask for credentials can be as
simple as compiling a list based on the experience of the Selection Committee—though there’s
the risk that you may not have the full and up-to-date picture of which Agencies to consider. In
this case, you will want to access a listing of Agencies for consideration.

You want to screen out Agencies with clear conflict, and any others that are unsuitable. If you
use public tendering, you will often get a great many applicants—many not qualified. This is to
some extent inevitable, though you can try to head this off by the wording in your call for
tenders.

If a public tender is not used, then the Advertiser will need to have access to a comprehensive
list of advertising Agencies. The two best sources are the ICA website (www.agencysearch.ca)
or contact Jani Yates at 416-482-1396) and Marketing Magazine (www.marketingmag.ca). The
ICA provides a listing of their 95 member Agencies who represent over 90% of all national advertising
in Canada. At the ICA site, the Agencies update their information regularly, whereas Marketing
Magazine does theirs less frequently.

16
Agency Expressions of Interest
The call for responses needs enough detail to be a good screening tool—usually the basic
assignment/requirements will suffice. The Expressions of Interest can be obtained either by a
telephone interview or by a written submission by the Agencies. The key considerations in
evaluating the Expressions of Interest are:

i. Agency background, history, positioning, point of difference

ii. Size, employees, revenue
iii. Services provided in-house
iv. Proprietary Techniques/Research
v. Key Advertisers
vi. Potential conflicts
vii. Relevant experience in the category
viii. Value Added contributions
ix. Other criteria as determined by the Selection Committee

If you ask the Agencies to express their interest in writing, these are the things you will want to
consider.

• Decide if you want all responses in a similar format. Exhibit #2 for reference.
• Alternatively, you may want to leave the nature of the response open, so that Agencies can
show more proactivity and creativity.
• Make it clear whether you want hard copy, and/or email.
• Set a time limit—usually two weeks is sufficient.
• Be prepared to answer questions as Agencies prepare their responses.

Based on the Expressions of Interest, you will be able to select the candidates for the next
Stage, contacting the Long List. 9

Deciding On The Long List

The outcome of Stage 2 is a long list of 8-12 candidate Agencies who will proceed to the next
stage of the process – credentials submissions. Deciding the Long List is based on the skills,
capabilities and relevant experience that are demonstrated in the Expression of Interest.

9
The ICA process eliminates the “Long List” step. The initial screening questionnaire is carefully designed such
that only highly qualified Agencies respond. This allows the Client to focus on selecting the best Short List.

17
 Stage 3
3.3 Stage 3 - Agency Credentials Submissions
- From Long List to Short List (2-3 weeks) Choosing The
Short List
Evaluating the credentials submissions against pre-determined
Review credentials &
selection criteria and deciding upon the Short List of agencies questionnaire
to proceed to the next stage

-------------------------------------------------------------------------------------------------------------------------------

Stage 3 consists of three sequential components:

1) The Briefing Package that the Advertiser provides to the Agencies on the Long List.
2) The Credentials submissions from those Agencies, in response to the Briefing Package.
3) The evaluation of the credentials from the Long List of Agencies and deciding upon the
Short List of 4-7 for the Visits Stage.

Note: at this stage of the process, there will been to be a mutual Non-Disclosure Agreement
(NDA) provided to all of the participants. A sample NDA is provided in Exhibit 8.

Obtaining Credentials from the Long List and deciding on the Short List of 4-7 Agencies.
Briefing Package to the Long List

Cover Letter Questionnaire Background

Explain the process; Reflect the requirements; Company data; scope of

response guidance; ratings/weighting; assignment; key issues
deadlines instructions

Search Committee
Review Agency chooses the Short
List of 4-7 Agencies
Credentials
to visit
Submissions

1. The Agency Briefing Package

a. The Cover Letter: You thank them for their interest, explain the next steps, point out any
special instructions, let them know (in general terms) how their responses will be judged,
specify what form their answers should take, make the “rules of contact” clear,10 and give
them the deadline for submission.

10
You want to head off a flurry of calls to the company. As noted earlier, the usual process is to establish the Team
Leader (not a junior) as the point of contact. This sends an important signal to the Agencies.

18
b. The Questionnaire: There are two approaches here:
• A strictly formatted approach. (A sample questionnaire is provided in Exhibit 2.)
• A more open-ended approach which the ICA favours, which they believe affords the
agencies a greater opportunity for differentiation.

c. Background: Better information leads to better responses. If your company is identified, you
will not want to give too much detail, but you can outline basic company/brand data, the
scope of the assignment, key issues, etc.

One area needs attention. Advertisers seem to be reluctant to give Agencies information
that will allow them to approximate their potential revenue. This leads to a Catch-22.

Advertisers want Agencies to tell them the resources they will commit. But Agencies are not
sure how to reply on the information available. Best practice is to give Agencies a sense of
the revenue potential—without, of course, making any commitments. This can be very
general, along the lines of “To help you plan how you would allocate resources, assume that
this account could generate revenue in the range, very approximately, of $XX—though
naturally, this is not a firm figure.”11

2. Agency Credentials Submissions

The submissions provided by each of the Agencies will typically consist of a written response to
the questionnaire (see Exhibit 2) and the Agency’s Credentials Package. The Credentials
Package usually includes background and history, services provided, Advertiser list, key staff,
creative materials and case studies. Note: some of the credentials packages are quite large
and all submissions will include extensive creative work, much of it video or CD.

3. Credentials, Evaluation and Decision Making

Evaluation of the Agency credentials submissions can be time consuming, requiring about one
hour for each package. Credentials should be evaluated against a pre-determined list of
weighted criteria (see Exhibit 3). The aggregate scores from the Selection Committee should
determine the Agencies who will advance to Stage 4: Agency Visits (usually 4 to 7 candidates).

11
Formal terms and conditions can wait until later. This is covered in Chapter 4.

19
 Stage 4
Agency Visits
3.4 Stage 4 – Agency Visits (1-2 weeks)
Visit short-listed
Visit the Short List of agencies at their offices to assess the Agencies; review
chemistry
personality and culture fit and either make selection or determine
which agencies will advance to the next stage.

-------------------------------------------------------------------------------------------------------------------------------

The primary purpose of the Agency Visits is to assess the chemistry and culture fit with each
Agency. After the visits, many Advertisers are able to make a final selection decision and
proceed to Stage 7, reference checks and the service contract.

The Agency Visits are usually 1½-2 hour meetings held at the Agency offices. It is important to
hold the meetings at the Agency offices in order to obtain a clearer understanding of the Agency
culture and working environment. At this stage in the search process, all of the remaining
Agencies should have the skills, capabilities and experience required and the Advertiser should
be satisfied that each of the Agencies answered the first question “Can they do the job well?”

The key question is “Do we have the right fit?”. Here again, there are a number of points to
consider:

• The Advertiser’s Visit Team is key.12 This should include (at least) the Team Leader and
representatives of the Marketing Group who will be working with the Agency.
• The Agency’s understanding of, and enthusiasm for, the Advertiser’s business.
• Given that the idea is to understand the DNA fit, have an unstructured agenda—let
Agencies reveal what makes them who they are, and different from their competitors. See
Exhibits 4 and 5.
• Strategic Skills/Planning/Buying/Methodologies/Results.
• Contribution of Agency senior management, and the team assigned to the business.
• Strategic and Creative Process and Results.
• Assess the all-important chemistry: sharing the same vision, values, business philosophy
and culture fit.
• See how the Agency thinks during a Question & Answer session.
• Confirm that they do indeed have the skills and resources you need.
• Identify Advertisers for references.
• Discuss (perhaps off-line) the Agency’s approach to conflicts and remuneration.

Agency Visits: The First Decision Point

If you feel the need for more input, you move to Stage 5 and ask the candidates still under
consideration, between 2 and 3 (maximum) for capabilities presentations.

12
If the “Advertiser’s Visit Team” is not substantially the same for each agency, especially in terms of the Client’s
“power players,” word can quickly leak out that the playing field is not level.

20
Reference Checks

No Agency search is complete without reference checking. It maintains honesty in the process.
It will identify issues and problems and also confirm (or deny) the subjective opinions and
interpretations of the Selection Committee. Ideally, checks are best done by contacting the
senior person, responsible for advertising, at current and prior Advertisers of the candidate
Agency.

Which Advertisers should you choose? Consider asking the candidate Agency for a list of
Advertiser companies that are similar to your own – think particularly of size, complexity and
similarity of service model or consumer relationship. You may want to broaden this reference list
with Advertisers chosen at random from the candidate Agency’s customers, or check with a
recently departed Advertiser if one seems particularly appropriate. This latter needs to be
treated with care as there is usually two sides to every story. In any case, the Agency needs to
be advised in advance as to which Advertisers will be asked to provide references, so that they
can be notified by the Agency to expect your call.

Consider having the reference check done by a third party who can provide objectivity and
protect respondent anonymity. Input is likely to be more candid if comments are unattributed! In
any case, treat the reference check as you would a record check on a new employee hire:

• Make sure that the individual to be contacted has direct personal experience with the
Agency or has been sufficiently involved to comment intelligently.
• Make an appointment to have the telephone call – this allows senior people to prepare
their responses and provide callers with their full attention.
• Ask open ended-questions such as the following:
o What are your overall impressions of the candidate as your Agency?
o What are their strengths and weaknesses?
o What do you like best about the candidate? What do you like least?
o Can you comment on their contribution at a strategic or planning level?
o Comment on their capabilities in account management, creative, media, administration?
o Comment on their service to you as a customer.
o Comment on the visibility of senior management on the account.
• Make detailed notes.
• Share the key conclusions from the reference check process with both the selection
committee and the final decision-maker.

21
3.5 Stage 5 – Capabilities Presentation
(2 weeks) (Optional) Stage 5 (Optional)
Capabilities
The Agency capabilities presentations are intended to Presentation
demonstrate relevant skills, experience and case studies
Formal presentations
that address the Advertiser’s key business issues. by finalist candidates

-------------------------------------------------------------------------------------------------------------------------------

This optional stage is to cover the situation where the Agency Visit does not narrow down the
field enough, and you want to explore capabilities more formally—for example bringing in very
senior members of the Advertiser organization who did not go on the Agency Visits. The number
of Agencies at this stage will vary, but ordinarily will be very limited, to no more than five.

Stage 5 (Optional)

Capabilities Advertiser Ratings

Presentation
Finalists
Team qualifications,
service package,
or decision
Team introduction, understanding of
background, case requirements, structure,
studies, services, marketing successes, and
structure/delivery, Q&A personal chemistry

As before, you should contact non-selected Agencies with a personal phone call (an offer of
feedback is often very much appreciated) and a cordial follow-up letter. For the Agencies
moving to the Capabilities stage, you will need to consider the following:

a. Instructions to Agencies
These need to be specific enough that the Search Committee will see what they are
interested in, and flexible enough that Agencies can show their points of difference.
Instructions would include:
• A focus over and above what was covered in the Agency Visit. This might be “your ability to
turn brands around” or “your ability to win in David and Goliath situations” or “Your thoughts
on extending a brand franchise without diluting it” or any area of interest to you that allows
the Agencies to show their mettle.
• A stipulation that the presentation be made by the people who will be assigned to your
account.13
• The stipulation to make case studies relevant.
• A list of who will attend from the Advertiser side, with titles.
• A schedule that allows for at least 25% of the time to be for Q&A, during the presentation or
at the end.

13
You want to avoid being blown away by a “pitch team” that you never see again. On the other hand, be realistic in
realizing that Agencies do not have full teams waiting to be assigned. At the time of pitching, many of the proposed
team will be assigned to existing Clients. After winning, Agencies make the necessary adjustments. (This is why
asking, “what % of your time do you have available?” is not a best-practice question. The appropriate wording is, “If
you should win the assignment, what percent of your time would you be devoting to our account?”)

22
• Explicit direction that speculative marketing/creative/media will not be accepted, and could
be grounds for disqualification.14
• Location—preferably at the Agency.

b. Length of Presentation
If the meeting is at the Agency, a 2-hour time slot is appropriate depending upon the
business issues, scope & scale and complexity of the advertising assignment. If it is a “day
of presentations” at the Advertiser offices, the slot has to be 2½-3 hours to provide each
Agency with sufficient time to set up and break down the presentation equipment:

• At least a 15 minute buffer between presentations (to ensure candidates do not overlap)
• 15 minutes for the Agency to set up
• 90 minutes for the presentation
• 30 minutes for Q&A
• 15 minutes for the Agency to tear down/pack up

A draft rating form is provided in Exhibit 6.

In almost all cases the final decision on the Advertising Agency selection can be made after the
Agency Capabilities stage. After the Capabilities presentations, if the decision as to the winning
Agency is clear, then the process would go to Stage 7, Memorandum of Understanding and
Contract, with the non-chosen Agencies contacted as before. Please note that reference
checks should be conducted before the Capabilities Stage, so that you will be in a position to
make the final decision after the presentations.

14
See the discussion on pages 26-30.

23
3.6 Stage 6 – The Work Session (Optional) Stage 6 (Optional)
Work Session
The Work Session is an assessment of teamwork and
Strategic problem
chemistry which parallels the way that the Client and Agency solving to assess
would work together. It is less about the solution or outcome chemistry and thinking
ability
reached and more about the process and how you got there.

-------------------------------------------------------------------------------------------------------------------------------

The Work Session is the final (optional) stage for deciding between two finalists. It is based
upon replicating the working relationship between the Advertiser and the Agency, using an
actual marketing case study. As such, the Work Session is primarily about the interactions,
personal compatibility, work style and business approach of the people who would be working
together on a day-to-day basis. The Work Session addresses the question ‘Do we work well
together?’ Accordingly, the Work Session is more about the people interactions, work process
and meeting dynamics than it is about the solution to the case study that the group will develop
together. It answers the question how well the team works together to achieve the Advertiser’s
business/communication goals.

The Work Session can follow on from the Agency Visits or, in the rare circumstances where all
seven stages are needed, follow on from the Capabilities presentations.

The Work Session focuses on two critical areas, which are fundamental to great work,
productivity and longevity:

1. How the Agency thinks and works

2. The personal and working relationship fit between the Advertiser and the Agency

The Agency receives no prior notice of the specific case study or marketing challenge that will
be worked on, in order to ensure that the ideas that emerge reflect the strategic and thinking
capabilities of the Agency team assigned to the business.

Finalist Agencies
(2-3)

Stage 6 (Optional)

Work Session Work Session Advertiser Ratings

Briefing

Develop background and A 3-hour interactive Work Insightful analysis,

instructions to a Session Ingenuity, Focus on
“Marketing Problem” results/ROI,
Agency Resources
Chemistry/Fit,
Overall Impression

24
The idea is to capture the Agencies’ on-the-ground capabilities. This is critical best-practice
learning, and is the reason behind the design of the Work Session:

• It is based on a real-world business or communication problem important to the Advertiser.

(Brand-building, Positioning, Traffic Building, Creative Strategy, etc. — not actual
speculative work).
• It is an interactive planning meeting between the marketing team and the Agency team who
would be working on the business. It is a “full team” from both sides, including senior people.
• The Agency gets no advance notice of the problem. (This is to exclude “one-off” freelance or
international help that would not be part of the ongoing service.)
• The Advertiser introduces the problem with a comprehensive briefing. (15–30 min.)
• The Agency then takes the lead in developing solutions and ideas with the input of all the
participants.
• The objective is to reach reasonable consensus in a fixed time (generally 3 hrs.).

In terms of evaluation, the Work Session is a real-world microcosm of the three primary
questions: Can they do the job well? Is there a good fit? Will we work well together? It
throws light on the people (skills, experience, personalities), their thinking (insights, discipline,
ingenuity), how they work (leadership, listening, collaboration) and teamwork. These are more
important than a “right or wrong” answer, of course. See Exhibit 7 for a Rating Sheet.

An additional benefit is that the Work Session does not waste time or money for Advertiser or
Agencies, and an Advertiser would not be expected to remunerate the Agencies.

3.7 The Downside Of Speculative Work

1. Speculative Creative Presentations

Best Practice in Canada, the US and the UK (except in the special circumstances discussed
below) advocates against speculative work for new business presentations. “Let’s see what the
Agencies can come up with?” sounds fine, and it’s not immediately obvious why it’s a bad idea,
so we will develop this point in some depth. Perhaps this is the most vivid objection:

To pick an Agency based on speculative work is like picking a bride off

the internet—you have no idea what the future holds.
Peter Elwood, Past President, Lever and Lipton

All speculative work shares the same shortcomings. It does not reflect the very thing you are
looking for—what a sustained ongoing relationship will be like. Advertisers who have transferred
to the Agency side are astonished at the resources that are thrown into speculative work, much
of it freelance or otherwise not provided by the ongoing staff. It takes resources away from
existing advertisers who end up “paying for it”.

Strategic, creative and media capability is, of course, pivotal in picking an Agency, so how do
you assess it? Best-practice is clear. Get the Agency to show you its work, and explore with
them (to the degree of detail you need) everything from how they identified the problem or
opportunity, through strategy and insight, to execution, to results, to lessons learned. This

25
rigorous and diagnostic approach is much superior to speculative work, for the following
reasons:

• Speculative Work—because of extensive use of outside resources—gives a non-predictive

picture of an Agency’s ongoing strategic creative or media capability.
• It is rarely based on in-depth knowledge, which (for confidentiality reasons) is usually not
entirely revealed in a pitch briefing.
• It hardly ever gets to market. This alone indicates that it is a false yardstick.
• Creative can influence search teams with a powerful magnetic force—leading to decisions
that are later regretted. Advertisers should contrast this to well-run research—where
immense effort goes into making sure that “executional factors” do not distort the underlying
truth of what is being investigated.
Speculative work adds significantly to an Agency’s costs. Although you may say “that’s their
decision to make” the fact is that different Agencies will make different decisions. As shown by
the “Prisoner’s Dilemma,” optimal results are not found by letting things take their natural
course.15 An Agency may do better on the day because it outspends its rivals, but having won
the business it has to find ways to recoup its investment. This is all part of red-blooded
capitalism, but it does not necessarily find you the best partner.

Strategic, Media, and Creative Assignments

Speculative Assignments should not be considered as part of an agency
search Best Practices process, except under special circumstances, where:

1. The agency is fairly remunerated for the time in working on the assignment
2. The work is well-briefed by the Advertiser and there is on-going dialogue
between the Advertiser and Agency throughout.
3. The work will be used in the marketplace, not wasted.

2. The Speculative Strategic or Media Costing/Plan Presentation

This is more common than a creative assignment, but it is also not regarded as Best-Practice.
Despite the good intentions of this approach there are major risks. Given what is at stake, one
or more Agencies may be tempted to enlist pitch resources (from freelancers, consultants, or
their international networks) that are not part of their ongoing service. This means that the
exercise is not predictive. Also, while the briefing may be careful, the pressures of time and
confidentiality usually mean that it is not complete. As a consequence, solutions rarely find their
way to the marketplace—wasting money and time for both parties.

If a strategic or media costing/plan assignment is included, the following guidelines are

recommended.

• Agencies are given a ‘live problem’ specific to the Advertiser’s business, with advance
notice, and asked what strategies and tactics they recommend to deal with it.

15
Two prisoners are accused of a crime. They are interrogated separately, and offered various sentences, dependent
on what the other chooses. Fearing what the other one will say, they almost invariably do not pick the best answer.

26
• The objective is to see how the Agency thinks and plans, their acumen with budget/ROI
issues, their initiative, their track-record, and so on.
• All the Agencies get a written Backgrounder, and attend a formal briefing and Q & A (this is
sometimes done with all finalists together to eliminate ambiguities and ensure equal access
to information).
• Presentations are set to a deadline, generally 3 weeks hence.
• Formats vary, but generally are based on a 90-minute presentation, with another 30 minutes
for Q&A. (The total time is 2½ hours, allowing 15 minutes each to set up and tear down.)
• Creative is expressly excluded.
• Agencies are told that the solutions must be conceived and presented only by people who
will be working on the business.
• Advertisers offer a fair-market payment to help offset the Agency’s cost, and establish
Advertiser ownership of the recommended solution(s).

3. The Economic Cost of New Business Presentations

The economics of New Business pitches are so significant that it is worth further explanation.
The incentive for an Advertiser is self-interest i.e. the more effective and efficient you can make
the search (for you and the Agencies) the better it is for you.

In 1997 and 1998, KPMG completed a study16 on the costs incurred by 36 Agencies
participating in 12 separate account reviews. The following table shows the High, Low and
Average costs to the Agencies. Costs are based on out-of-pocket costs, plus time-costs, on the
basis of:

• Capabilities Presentations only

• Capabilities and a Strategic Presentation
• Capabilities, plus a Strategic Presentation and Speculative Creative

KPMG Report: Agency Costs of New Business Presentations

Agency Costs $000 High Low Average

Capabilities 14.4 2.4 6.7
Capabilities/Strategic 96.9 12.0 30.5
Speculative Creative 591.0 12.5 169.1

N.B. ICA is updating this data which is six years old. In today’s market it understates the cost of
Strategic Presentations which are often speculative creative pitches in disguise.

The table shows the explosive effect of speculative creative (and, to a lesser extent, Strategic
Presentations) on cost. Even allowing for the fact that some costs are internal, the average of
$169,000 is a wake-up call. Some Advertisers wonder how this money gets spent. The fact is
that a new business competition is an all-or-nothing race. In the heat of the chase (especially
with speculative creative) costs can spiral in the blink of an eye.

16
KPMG was retained by ICA to develop an estimate of the economic dimensions of the advertising sector in Canada, entitled
"Economic Impact of the Canadian Advertising Industry", June, 1999.

27
One Agency president, having won a major account with a very expensive pitch said ruefully,
“Of course, I’m glad we won, but it’s like graduating with a huge student loan on your back. It’ll
take us forever to pay back what we’ve spent out.”

This is not good for Agencies, and ultimately, it is not good for Advertisers. This is why
Advertisers can do the Marcom Industry a service by removing speculative pitches from the
repertoire.

3.8 The Special Case Where Strategic/Creative/Media Work Is Needed

There are rare circumstances where strategic/creative/media is needed in a pitch – for example
a new product launch that will use the winning work, or something very close to it, because of
very tight timing.

This situation is very different from “let’s see what the Agencies can come up with.” You are
looking for the very best solution, taking into account the realities of the situation, and it is in
your interest to replicate the real world as closely as possible.

In a successful ongoing relationship with just one Agency a creative project like this puts
considerable demands on an Advertiser’s time. Given that this will now be spread across more
than one Agency, it is important to be selective in whom you choose, restricting this to two or
perhaps three candidates. You will then need to do the following:

• Brief the Agencies with total disclosure.17

• Be completely available for them as they develop their work.
• Be very much aware of Agency concerns about confidentiality. This is a delicate matter, but
with multiple meetings leaks can occur. Agencies need to know that their thinking will stay
under wraps.
• Ask the participating Agencies to provide ideas or rough strategic concepts/media plans
only, not finished creative work, media buys, or integrated campaigns.
• Protect the integrity of the Agency contributions i.e. if one Agency shows initiative that does
not occur to the others, it is not appropriate to share this.

Importantly, the Agencies should be paid fairly for their time and costs.

It is only fair to remunerate the participating Agencies for their costs associated with speculative
Strategic/Creative/Media Assignments used to help choose an Agency. Good practice would
suggest that you take direct labour and out of pocket costs into account, and pay these at 100%
to the winner and 50% to the one or two runners up.

When budgeting this, the reality (and the cited KPMG study) requires that the advertiser not
think in terms of token amounts like $5,000, but more in terms like $150,000. Discuss the scope
of work with the finalists and get estimates of costs before creating a proper competition.

17
You will, of course, require them to sign Confidentiality Agreements if they haven’t already.

28
Because you fully intend to use the winning strategic creative/media plan, the situation is very
close to architecture, when tenders go out for the design of a new building, and the work is paid
for. This leads to the following which is modelled on rules for an architectural competition
developed by the Royal Architectural Institute of Canada.

RULES FOR COMPETITION: ROYAL ARCHITECTURAL INSTITUTE MODEL

• Limit the number of Agencies to two or three.
• Provide fair-market remuneration to the winning agency and half fair-market value to each of the runner(s)-
up. The figures can be high (well into six figures), though the investment is to some extent “saved” because
you do not have to re-invent the wheel after appointing the winner.
• Provide detailed and equal briefing to all participants.
• Review and agree the strategic direction that each agency proposes before they move to creative
development (allow 3 weeks for this review).
• Permit sufficient time for creative development (allow 3 weeks more for this).
• Publish your selection criteria in advance, along with the names and positions of the selection committee.
• Define, precisely, the level of finish you want to see.
• Establish and publish penalties for Agencies who do not comply with the requirements of the competition.
• Discuss and agree copyright issues with each agency in advance. (The ICA advises against transfer of
ownership at less than fair market value).
• Request only materials that you intend to use.

CONFIDENTIALITY AND RIGHTS OF OWNERSHIP

The following inputs and perspectives have been provided by Rafe Engle, legal counsel,
for the Institute of Communications and Advertising.

If a search is to include a work session, strategic exercise or the development of creative,

sooner or later the Advertiser’s Legal Counsel will ask about confidentiality and rights to
ownership in any materials developed by an Agency.

Confidentiality Agreements
Clearly in any ‘live exercise’ an Agency is going to be adequately briefed and this usually
involves the sharing of proprietary information. While it is right and proper that some
confidentiality agreement be signed to make clear the responsibilities and rights of both parties,
there are a number of principles that should be kept in mind.

Overall, it may be advisable for confidentiality agreements to be constructed on a reciprocal

basis. Often an Agency may not wish to disclose its own proprietary tools/research, financial
information or commercial arrangements because to do so could be as damaging to the Agency
as disclosing the Advertiser’s business secrets would be to the Advertiser. It is reasonable that
a reciprocal confidentiality agreement should provide for:

• No disclosure of any information to third parties except as authorized by the Disclosing Party.
• No copies – electronic or mechanical - unless authorized and a ‘certification’ of destruction
process defined.
• No liability where the information is part of the public domain, or where there is prior knowledge or
where written consent has been obtained.

29
 • No liability for errors or omissions.
• A defined period of non-disclosure.

It is likely not reasonable to include everything that is prepared by a candidate Agency as

‘confidential’ as is occasionally demanded. Care should be taken to ensure that the agreement
differentiates between materials that include Advertiser-related data vs. materials that are based
on such data (such as creative concepts, executions or draft plans/strategies). Agencies may
want to re-use some of their materials from unsuccessful presentations, and ‘blanket’
provisions, in a confidentiality agreement that intentionally or accidentally includes materials that
do not reveal proprietary Advertiser information, likely place an unfair and unnecessary burden
on the Agencies.

A sample Mutual Confidentiality Agreement or NDA is provided in Exhibit 8.

It is reasonable that Advertisers and Agencies in the latter stages of the search process should
have a full and fair discussion of each other’s needs for confidentiality before anything is signed.

Rights Of Ownership
There is no reason why an Advertiser should not have ownership of any materials that are
developed by an Agency provided that the work and rights associated with the materials have
been adequately paid for by the Advertiser. Such provisions are a standard part of Advertiser-
Agency service contracts entered into after an account or assignment has been awarded.
Where the ownership issue can become murky, and in need of attention and clarification, is
during that in-between time: while the search process carries on, but before a winner has been
selected.

In this best practice report, there are strong arguments advanced to discourage the use of
speculative creative because Advertisers are rarely willing to pay full and fair value for the
product or such exercises, and yet they may try and pressure Agencies into parting with claims
and ownership in such creative product as though there were a ‘live’ service contract in place.
The same concern exists in the development of ‘strategic exercises’ also discussed in Stages 5
and 6 of the search process.

In thinking about rights of ownership, Advertisers and Agencies should keep two things in mind:

1. It is reasonable for Advertisers to claim ownership in any materials which are paid for.
However, fairness principles demand that ‘fair value’ payment be a pre-condition to ownership.
Ownership should not be requested or conveyed for token (or no) payment.

2. Both Advertiser and Agency should keep in mind that ownership rights must be very specific.
In the case of creative materials such as photographs, images and occasionally other similar
intellectual property that is only licensed – not owned – by the Agency. Agencies cannot
unilaterally convey ownership in such licences to Advertisers under ‘blanket’ ownership
provisions, even if the Advertiser is willing to pay top dollar for the property.

Further advice on these subjects is available from the ICA.

30
3.9 Stage 7 – Finalization and Terms (1 week) Stage 7
Final Decision
Finalize the selection decision and complete the terms
of the agreement between both parties.
Final vote by Search
Committee; move to
contract terms
-------------------------------------------------------------------------------------------------------------------------------
Advertiser Ratings Work Session Terms of
Ratings Remuneration
Team qualifications,
service package, Insightful analysis,
understanding of Ingenuity, Focus on Agency fee methodology,
requirements, structure, results/ROI, remuneration, philosophy,
marketing successes, and Agency Resources terms and scope of work
personal chemistry Chemistry/Fit,
Overall Impression

Final Committee Memorandum of SERVICE Press

Decision Understanding CONTRACT Release

By now, you have everything you need to make a decision (reference checks having been made
at Stage 4). You now move to the following steps:

a. Memorandum of Understanding
As outlined in the next chapter we recommend that the Advertiser and winning Agency sign
a Memorandum Of Understanding (MOU) – before any announcements are made.

b. Notification
Once the MOU has been signed you should notify the other finalists, by phone call and
cordial follow-up letter. This has to be done quickly, because news leaks fast.

c. Press Release
You and the winning Agency should issue a joint press release announcing the awarding of
the contract.

d. Feedback
You should offer to provide feedback to any of the participating Agencies in recognition of
the time and energy that they have committed.

e. Service Contract
The final contract will take several weeks to complete. The ICA has a contract template that
can be accessed for members at their website at www.ica-ad.com.

f. Mutual Performance Reviews

As the contract is being finalized, you and the Agency should agree on expectations. This
should include continuous feedback to each other, supplemented by an informal written two-
way evaluation at 3 months and 6 months, and a formal two-way evaluation at 12 months.

31
 Define The Process
Define The Process
AGENCY
AGENCY SEARCH
SEARCH Capabilities
Capabilities
Capabilities
Capabilities
Capabilities
Overall Decision
Decision Making
Making Milestones
Milestones
Milestones Presentation
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All agencies or
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Selection Committee,
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-makers, timetable;
timetable;
timetable; case
case
case
case studies,
studies,
studies,
casestudies, services,
services,
services,
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services,
Steps e.g.,
Steps e.g., consultant
consultant role?
consultant role?
role? management
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management of of the
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structure/delivery,
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Q&A
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search
search
Strategic Exercise,
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Creative
Creative

Agency
Agency Visits
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Requirements Definition
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Visit
Visit facility;
facility;
facility; meet
meet
meet senior
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interviews,Q&AQ&A
Q&A
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brands, length of
brands, length of contract,
contract, billings,
billings, advertisements
advertisements (tender publishing),;
advertisements (tender publishing),;
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conflicts
conflicts contact
contact ICA
ICA and
and Marketing
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Worksession
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Terms
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Agency
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Philosophy/Approach
Philosophy/Approach
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Of
Of Interest
Interest
Written
Written response
Written response
responseto to the
tothe contact
thecontact
contact

32
plan
plan and
plan and preparedness
andpreparedness
preparednessto to
to Reference
Reference Checks
participate
ReferenceChecks
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participate in
participatein capabilities
in capabilities
capabilities
assessment
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Deciding
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-12)
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Client Ratings
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ClientRatings
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Cover Questionnaire Backgrounder
Backgrounder Team
Team qualifications, service Understanding
Understanding
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qualifications,
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service
qualifications,service
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package,
package, structure, marketing Insightful
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analysis,focus
focusonon
package, structure,
structure,
package,structure, marketing
marketing
structure,marketing
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Explain Reflect Company successes,
successes, and
and personal
personal results/ROI
Explain the
Explain the process;
the process;
process; Reflect the
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the Company
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data; successes,
successes, and
successes,and personal
andpersonal
personal results/ROI
response requirements; scope chemistry
chemistry Agency Resources
response guidance;
response guidance;
guidance; requirements;
requirements; scope
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deadlines ratings/weighting; assignment; Ingenuity
deadlines
deadlines ratings/weighting;
ratings/weighting; assignment;
assignment;key key
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instructions issues Presentation quality
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instructions issues
issues Presentation quality

Selection
Selection MOU
Committee MOU
Key terms of
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termsofof
chooses agreement
agreement in a SERVICE
SERVICE
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chooses 5-6
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CONTRACT
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Agencies
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Decision understanding
understanding
(Short understanding
(Short List)
List)
CHAPTER 4. AGENCY REMUNERATION & AGREEMENTS
Once an Agency is chosen it is important to get a service contract agreement signed (ideally
within a month). This seems obvious but not all Agency/Advertiser relationships have contracts,
at substantial risk to both parties. A complete contract needs legal advisors on both sides and
even standard areas or ‘boilerplate’ can require much back and forth. The contract can get lost
in the urgency of the day-to-day business and stay pending for too long. To help expedite
matters, you might like to refer to the following documents, available without charge from the
ICA or from www.ica-ad.com:

• ICA contract template (available to ICA members)

• Guidelines for Effective Advertiser/Agency Remuneration

Jointly published by the ICA and the Association Of Canadian Advertisers (ACA).

• Payment By Results 2 – Best Practice (also by Sark & Reynolds)

Here, some part of the remuneration is based on results or other performance, measured
against pre-determined criteria. Please note that it is usually difficult to institute Payment by
Results in the first year of a relationship, since there are so many unknowns. Accordingly,
we do not normally recommend it at this stage.

As noted earlier, the relationship should start with a Memorandum Of Understanding (MOU).
This can be signed off quickly before formal announcements are made.

The Memorandum Of Understanding

1. Scope and Scale of the Assignment

Key service requirements, geography, role of the Agency, functional capabilities, planned
marketing communications activities, etc.

2. The Marketing Communications Budget

3. The Agency Staff and Structure

Key Agency personnel assigned to the account, and the organizational structure.

4. Agency Remuneration
There are six factors to consider at the MOU stage:
• Whether remuneration will be fee or commission based, or a combination.
• Commission rates and fee rates where applicable.
• The scope of work or services required.
• The advertiser’s remuneration budget.
• The Agency’s cost of providing staff and services.
• The term of the agreement.

5. Copyright/Ownership of Intellectual Property

Ownership of the copyright for materials developed for the Advertiser must be clearly stated
from the outset or complications can arise. Generally, the ownership of intellectual property
resides with the advertiser, once the Agency has been fully remunerated for the work. This
can get complicated under commission agreements, where the Agency’s revenue may be

33
 deferred. There are also situations where the Agency is remunerated through methods such
as royalties on sales, and the copyright stays in the control of the Agency, but these are
rare. Whatever the case, copyright must be a MOU priority.

6. Notice
Once the selection decision has been made, ironically, the terms and conditions of
termination need to be negotiated as well. It may seem strange in the euphoria of the new
relationship, but this is the ideal time to negotiate termination. Unless the Agency is in
breach of contract and has been fired 'for cause', the Agency is entitled to some form of
compensation during a notice period.

The main contract elements relating to termination include: termination period or notice,
remuneration during the notice period, project completion, collection of monies, handover
and transition to the new Agency, documents and files, public relations/press statements
and human resource issues.

As each relationship and the circumstances are different, there are no general ‘clauses’ that
will apply to all termination agreements but the over-riding principle is that the terms should
be fair and equitable to both parties.

The Client needs to ensure that there is an orderly transition to the new Agency and the
Agency needs to be treated fairly in terms of compensation during the transition or notice
period. In much the same way that an employee who has been hired is entitled to
severance, the Agency too has a form of entitlement for the people that they have hired to
work on the client's behalf, office space commitments that have been made, etc. Once the
relationship is ended, the Agency typically will have to release a number of their staff and
bear the costs of these staff terminations as proscribed by law and industry practice. In
general, the contract terms should define what compensation that the Agency is entitled to,
over what period of time and what responsibilities they would have during that transition or
notice period.

The industry standard for termination is 90 days notice. During this time, the Agency will
often continue to work on new assignments and work in progress, while conducting the turn-
over to the new Agency to ensure a seamless transition. If the Agency is paid on the basis
of level monthly fees, earnings during the notice period may adequately respond to their
‘severance’ issues. In the case of commission-based arrangements or where work
immediately shifts to the new Agency and no on-going work exists during the transition
period, alternative compensation approaches should be considered.

The Advertiser/Agency Contract Agreement (Main Areas)

1. Scope of Work – The types of service being provided such as Broadcast, Print and Web-
based creative, Strategic counsel, Direct Marketing etc.
2. Remuneration – This will depend on the basic commission/fee decision. In addition to this,
many arrangements are based on an estimate of the project load (including allowances for
strategic work, meetings, account administration). This is the basis for a monthly retainer
which is then regularly reviewed versus actual workload.

34
3. Travel and Expenses – A statement on the expenses that are reimbursable (including
conditions such as class of travel, automobile kilometrage rates etc.)
4. Staff and Structure – Confirmation of the key Agency staff assigned to the business.
5. Purchase of Outside Services – Requirements for competitive quotes etc.
6. Estimates, Billing & Payments – Includes treatment of discounts and rebates.
7. Reconciliation & Reporting Requirements – How frequently hours are reconciled to
estimates, expectations for media pre and post analysis etc.
8. Right To Audit – An increasingly standard provision in which (generally third-party) auditors
review the reporting of billable time, the tendering of production work, the control of
expenses, the media reporting/make-goods etc.
9. Co-ordination and synergy between lead Agency and alliance partners/affiliates – This is
particularly important if, for example, media and creative are separated.
10. Performance Reviews –Specifying the nature and frequency.
11. Confidentiality
12. Term, termination and cancellation & Ownership of Intellectual Property – confirming the
MOU.

Beyond these core subjects, both legal departments will want to add standard clauses on
jurisdiction, provision for modification etc.

35
 INDEX TO EXHIBITS

EXHIBIT # TITLE PAGE

1 ICA Scope Of Work Checklists 37

i) Full Service
ii) Media Agency
iii) Core Promotional Services
iv) Interactive/On-Line
v) CRM
vi) PR

2 Initial Questionnaire 44

3 Initial Credentials Submission Rating 45

4 Agency Visits Meeting Agenda 46

5 Agency Visit Rating 47

6 Credentials Presentation Ratings 48

7 Work Session Ratings 49

8 Mutual Confidentiality Agreement 50

9 The ICA Agency Search Service 52

36
 EXHIBIT 1
DEFINING THE SCOPE OF WORK
Critical to the Agency review and selection is the clear definition of communications services required,
both current and anticipated. This relates equally to advertising, promotion, public relations, interactive
and media agency searches etc. that are being undertaken. It helps Agencies under consideration to
respond more precisely to the advertiser’s requirements. The degree to which the Agency is required to
fulfill any of these needs should be established up-front to identify suitable candidates and provide a
disciplined basis for evaluation. The scope of work will be unique to each Advertiser. Following are ICA
agency search checklists which identify many of the capabilities you may require in your search for a
communications partner:

i) ICA Full Service Agency Checklist

C = Client Responsibility; A = Agency Responsibility; J = Joint Responsibility; O = Other Company
(Identify); N = No Need.

COMMENT ON
C A J O N QUANTITY/FREQUENCY
OF PROJECTS
STRATEGIC PLANNING & ACCOUNT MANAGEMENT
GENERAL MARKETING & STRATEGIC COUNSEL
DESK RESEARCH, COMPETITIVE INFORMATION
ANALYZE SALES, DISTRIBUTION, CUSTOMER DATA
MARKETING PLANS, OBJECTIVES, STRATEGIES
TARGET MARKET ANALYSIS
COMMUNICATION STRATEGIES; CUSTOMER INSIGHTS
BUSINESS DEFINITION; NEW OPPORTUNITIES
COORDINATION OF NON-MEDIA/”OTHER SERVICES”
LINE EXTENSIONS, SEGMENTATION, NEW PRODUCTS
EMPLOYEE TRAINING/MOTIVATION/MISSION STATEMENTS
ATTEND SALES MEETINGS, FIELD VISITS, PR
LOCAL OR REGIONAL REPRESENTATION
RESEARCH
MARKET RESEARCH, HABITS AND PRACTICES STUDIES
CONSUMER INSIGHT RESEARCH; CONCEPT TESTING
CREATIVE PRE AND POST TESTING
ADVERTISING TRACKING STUDIES
CREATIVE ENGLISH; FRENCH
PRINT, RADIO, TV, OUT-OF-HOME
CONSUMER, IMAGE, BRAND POSITIONING
BUSINESS TO BUSINESS, TRADE, INDUSTRIAL
RETAIL, PROMOTIONAL, PRICE AND ITEM
COOP/DEALER/FRANCHISEE/MAT SERVICE
HEALTH CARE/PHARMACEUTICAL
RECRUITMENT/APPOINTMENT NOTICES
ADVOCACY, CORPORATE, FINANCIAL
ETHNIC
YELLOW PAGES/DIRECTORY ADVERTISING
HUMAN RESOURCES COMMUNICATIONS
INTERACTIVE NEW MEDIA; INFOMERCIALS
NON-MEDIA CREATIVE
IN STORE MERCHANDISING
BROCHURES, TRADE/CONSUMER
SALES MEETING THEMES, SCRIPTS
NAME/PACK DESIGN (PRODUCTS, COMPANY, VEHICLES)
VIDEOS; HOW-TO; IN-STORE; CORPORATE

37
 COMMENT ON
C A J O N QUANTITY/FREQUENCY
OF PROJECTS
MEDIA
STRATEGY
PLANNING
ESTIMATING/BUDGET CONTROL
RESEARCH
BUYING (DOMESTIC/OVERSEAS)
DEVELOPING PROGRAMMING OR MEDIA PROPERTIES
CHECKING AFFIDAVITS OR TEARSHEETS
POST BUYING ANALYSIS
SALESMEN’S SCHEDULES
QUARTERLY/ ANNUAL UPDATE ON MEDIA TRENDS
AGENCY OF RECORD (BUYING FOR OTHER AGENCIES)
PRODUCTION & TRAFFIC
OBTAIN GOVERNMENT COPY APPROVALS
ESTIMATING AND DOCKET CONTROL
PURCHASING, SUPERVISING PHOTO, ART, MECHS.
CASTING, NEGOTIATE CONTRACT
TALENT PAYMENT/RESIDUALS
MULTI-BRAND SCHEDULING AND ROTATION
MATERIALS FORWARDING WITH INSTRUCTIONS
PRINTING; QUANTITY VIDEO TAPES
VIDEO ASSEMBLY, ROUGH EDITS, ANIMATICS, RIPOMATICS
FINANCIAL
CHECKING INVOICES TO CONTRACTS, VERIFICATIONS
PAYING MEDIA, INVOICING CLIENT
PROVIDING FACILITIES FOR ANNUAL AUDIT
PROVING COST ACCOUNTING FOR EARNINGS/LOSS
SALES PROMOTION
CONSULTING STRATEGIES, TACTICS, PLANS
PROMOTION CONCEPTS & IDEAS
POINT OF PURCHASE, DIRECT MAIL, TRADE ADS
SALES AIDS
PREMIUM INCENTIVES, SOURCING, FULFILLMENT
LEGAL CLEARANCE
SALES MERCHANDISERS, STORE CALLS, SAMPLING
PUBLIC RELATIONS
COMMUNICATION AUDITS
ANNUAL REPORTS
TARGETED PUBLICITY; FILMS, AV, NEWSCLIPS, RADIUO
EXECUTIVE COMMUNICATION TRAINING; CRISIS MGMT.
SPOKESPERSON PROGRAM
SPECIAL EVENTS, COMMEMORATIONS ETC.
OTHER
DIRECT RESPONSE MARKETING
TELEMARKETING INBOUND/OUTBOUND
EVENT MARKETING, SPONSORSHIPS
TRADE SHOW EXHIBITS, DISPLAYS
SALES MEETINGS, CONVENTION THEMES, SCRIPTS, AV
INTERNET/NEW MEDIA

38
ii) Media Agency Scope of Work Checklist

REQUIRED COMMENT ON QUANTITY/

FREQUENCY OF PROJECTS
CORE MEDIA SERVICES
PLANNING – STRATEGIC ENGLISH AND/OR
FRENCH
IN MARKET/LOCAL BUYING PLACEMENT
(OR ADDITIONAL?)
ESTIMATING AND BUDGET CONTROL
BUYING (DOMESTIC/OVERSEAS)
CHECKING AFFIDAVITS AND TEAR SHEETS
POST BUY ANALYSIS OF RV, RADIO, PRINT
OOH, INTERNET
SALESMEN’S SCHEDULES
COMPETITIVE ANALYSIS E.G. USE OF
NIELSEN ,BBM
USE OF IN-HOUSE RESEARCH TOOLS
TRAFFICKING OF SPOTS
ACCOUNTING, INVOICE PAYMENT
LIAISON WITH CREATIVE RESOURCES

ADDITIONAL MEDIA SERVICES

SYNDICATED RESEARCH
DEVELOPMENT OF PROPRIETARY MEDIA
RESEARCH MODELS; E.G. ECONOMETRICS
DEVELOPING PROGRAMMING OR MEDIA
PROPERTIES
QUARTERLY (?)/ANNUAL UPDATE OF
MEDIA TRENDS
AGENCY OF RECORD (BUYING FOR
OTHER AGENCIES)
DUBBING SERVICES
MEDIA TRAINING SESSIONS
LIAISON WITH SALES TEAMS
MARKET SPECIFIC RADIO PROMOS
CREATIVE ADAPTATIONS
FRENCH ADAPTS
MANAGEMENT OF SAG, ACTRA, UDA
INTERNET MEDIA PLANS
LEGAL/CLEARANCE OF COMMERCIALS
INTRANET COMMUNICATIONS
COMPETITIVE ANALYSIS – IN DEPTH
INCLUDING TRACKING/RATINGS

39
iii) Core Promotional Services Scope of Work Checklist

REQUIRED COMMENT ON QUANTITY/

FREQUENCY OF PROJECTS
CORE PROMOTIONAL SERVICES
STRATEGIC PLANNING
CONCEPT DEVELOPMENT
PROGRAM EXECUTION
RETAIL MERCHANDISING/POINT OF
PURCHASE MATERIALS
ACCOUNT SPECIFIC PROMOTIONS
TRADE MARKETING PROGRAM
DEVELOPMENT AND EXECUTION
NEW PRODUCT LAUNCH MATERIAL
PROMOTIONAL PRINT ADVERTISING,
DIRECT MAIL, OOH
SAMPLING PROGRAM DEVELOPMENT AND
MANAGEMENT
PROMOTIONAL PACKAGING DESIGN
PROMOTIONAL WEB CREATIVE
PROMOTIONAL RADIO

ADDITIONAL PROMOTIONAL SERVICES

TRANSLATION MANAGEMENT FOR
NATIONAL PROGRAMS
DESIGN AND DEVELOPMENT OF
TEMPORARY OR PERMANENT DISPLAY
PARTNERSHIP DEVELOPMENT AND
NEGOTIATIONS
POST PROMOTIONAL ANALYSIS
PROGRAM PRESENTATION
DEVELOPMENT/CD ROM
SALES TOOLS AND INCENTIVES
PRIZE/INCENTIVE PROCUREMENT
PRIZE FULFILLMENT
CONTEST RULES AND REGULATION
MANAGEMENT
QUEBEC CONTEST MANAGEMENT
PRINT SUPPLIER NEGOTIATIONS AND
PRODUCTION MANAGEMENT
MANAGEMENT OF DISTRIBUTION OF
MATERIALS
LOGO DEVELOPMENT
PACKAGING DESIGN
PRINT ADVERTISING
DIRECT MAIL
OOH

40
iv) Interactive/Online Services Scope of Work Checklist

REQUIRED COMMENT ON QUANTITY/

FREQUENCY OF PROJECTS
WEBSITE DESIGN & DEVELOPMENT
WEBSITE/INTERFACE DESIGN
DIGITAL ANIMATION
PROGRAMMING/CODING
SYSTEM/SOFTWARE INTEGRATION
eCOMMERCE AND/OR TRANSACTIONAL
SYSTEM DEVELOPMENT
CONTENT MANAGEMENT

USABILITY SERVICES
USABILITY TESTING
INFORMATION ARCHITECTURE
INFORMATION DESIGN (USER INTERFACE
STRUCTURES)
OTHER USABILITY SERVICES
(HEURISTICS, CATEGORIZATION, ETC.)

ON-LINE ADVERTISING &

CAMPAIGN MANAGEMENT
CREATIVE DEVELOPMENT AND
EXECUTION
ONLINE MEDIA PLANNING/STRATEGY
ONLINE MEDIA BUYING/NEGOTIATIONS
ADVERTISING MEASUREMENT AND
ANALYSIS
ONLINE AD SERVING

OTHER DIGITAL SERVICES

EMAIL MARKETING/DATABASE
ONLINE PROMOTIONS
CD-ROM DEVELOPMENT
SMS COMMUNICATIONS
INTRANET/EXTRANET DEVELOPMENT

41
v) CRM Expertise and Capabilities Scope of Work Checklist

REQUIRED COMMENT ON QUANTITY/

FREQUENCY OF PROJECTS
CUSTOMER STRATEGY DEVELOPMENT
THE CREATION OF STRATEGIES &
PROGRAMS THAT EXPLOIT THE
DISCOVERED DIFFERENCES IN THE
FIRM’S CUSTOMER BASE - AND DRIVE
PROGRAM TREATMENTS THAT TREAT
CUSTOMERS DIFFERENTLY BASED ON
THEIR VALUE AND NEEDS

CUSTOMER GROUP SEGMENTATION

STRATEGIES AND PROCESSES FOR THE
IDENTIFICATION, SEGMENTATION AND
VALUATION OF THE FIRM’S DISTINCT
CUSTOMER GROUPS.

INFORMATION TECHNOLOGY
CONSULTING AND MANAGEMENT
DATA CAPTURE AND MANAGEMENT
SYSTEMS & INFRASTRUCTURE FOR
MANAGING CUSTOMERS AT ALL TOUCH-
POINTS

RELATIONSHIP-BUILDING MARKETING
COMMUNICATIONS
ABILITY TO DEVELOP AND EXECUTE
BRAND-ALIGNED MESSAGING ACROSS
MULTI-CHANNELS AND CUSTOMER
AUDIENCES. EMPHASIS ON DATA-
DERIVED, CONTINUITY-BASED, DIRECT
MARKETING STRATEGIES

CHANGE MANAGEMENT
STRATEGIES AND PROGRAMS FOR
EMPLOYEES, CHANNEL PARTNERS AND
OTHER KEY STAKEHOLDERS TO
POSITIVELY INFLUENCE ADOPTION OF
NEW CUSTOMER MANAGEMENT MODELS
AND PROCESSSES

MEASUREMENT STRATEGIES AND

EXECUTION
LINK CRM TACTICS TO CORPORATE
PERFORMANCE SCORECARD
CHANGE MANAGEMENT
OUTSOURCED PROJECT MANAGEMENT
FOR MULTIPLE INDEPENDENT PROGRAMS

42
vi) PR Scope of Work Checklist
REQUIRED COMMENT ON QUANTITY/
FREQUENCY OF PROJECTS
CORPORATE COMMUNICATIONS
FINANCIAL COMMUNICATIONS
BUSINESS TRANSACTIONS
EMPLOYEE COMMUNICATIONS
MEDIA TRAINING AND RELATIONS
GOVERNMENT RELATIONS
PUBLIC AFFAIRS
CRISIS COMMUNICATIONS
COMMUNICATION AUDITS, STRATEGIES
AND PLANS
COMMUNITY AND STAKEHOLDER
RELATIONS
CORPORATE SOCIAL RESPONSIBILITY
PROGRAMS
REPUTATION MANAGEMENT - EXECUTIVE
PROFILE ENHANCEMENT

MARKETING PUBLIC RELATIONS

BRAND DEVELOPMENT
PRODUCT LAUNCHES - EVENTS, MEDIA
CONSUMER RELATIONS
BRAND REPOSITIONING

SPONSORSHIP AND ALLIANCE

MARKETING
STRATEGY AND COUNSEL
SPONSORSHIP MARKETING
PORTFOLIO MANAGEMENT
PROPERTY DEVELOPMENT
CORPORATE SOCIAL RESPONSIBILITY
PROGRAMS

43
 EXHIBIT 2

INITIAL QUESTIONNAIRE19

While most Agency Searches begin with a version of the following questionnaire in the initial
briefing package, it should be noted that some search consultants say that answers to a
standard questionnaire make it harder to differentiate between Agencies. The ICA Agency
Search method lets the Agency decide what they want to send along with up to two pages to
explain why they should be selected. This (the ICA says) emphasizes the differences between
Agencies rather than their similarities.

At the other extreme, government searches such as those led by the Ontario Government’s
Advertising Review Board, advocate standardization to ‘level the playing field’ and to make the
screening process easier (they routinely receive 50 or more Agency applications for every
assignment tendered).

The choice of which strategy to use should be up to the Search’s Team Leader. A model
questionnaire is as follows (to be modified according to the individual situation):

1 AGENCY
2 ADDRESS
2A TOTAL NUMBER OF EMPLOYEES
2B HEAD OFFICE LOCATION IN CANADA
2C BRANCH LOCATIONS
3 OWNERSHIP DESCRIPTION
3A PARENT COMPANY NAME/LOCATION
3B NAMES AND TITLES OF MAJOR SHAREHOLDERS/PARTNERS
3C MEMBERSHIP IN INSTITUTE OF COMMUNICATIONS & ADVERTISING (ICA)
4 CLIENT LIST/YEAR ACQUIRED/SENIOR PERSON ON ACCOUNT
4A MAY WE CONTACT?
5 LIST CLIENTS/BRANDS GAINED OVER PAST 24 MONTHS
5A LIST CLIENTS/BRANDS LOST OVER PAST 24 MONTHS/REASON
WHICH TYPE OF REMUNERATION ARRANGEMENT DO YOU PREFER?
6  COMMISSION  FEE  COMBINATION  OTHER
PLEASE EXPLAIN
DO YOU HAVE A FORMAL COST ACCOUNTING SYSTEM BY WHICH YOU KNOW THE
7
MARGIN AND CONTRIBUTION TO EARNINGS ON EACH ACCOUNT?
7A DO YOU REVIEW ACCOUNT EARNINGS OR LOSSES WITH YOUR CLIENTS?
PLEASE COMMENT ON THOSE ACCOUNTS ON WHICH YOU FEEL YOU HAVE MADE A
8
SIGNIFICANT CONTRIBUTION TO THE CLIENT’S SUCCESS (E.G. CASSIES)
9 PLEASE COMMENT ON THE OPERATING PHILOSOPHY OF YOUR COMPANY.
10 PLEASE SUMMARIZE ANY OTHER AGENCY INFORMATION THAT IS RELEVANT
11 OTHER RESOURCES (DIRECT MKTG, PUBLIC RELATIONS, SALES PROMOTION ETC.)
12 EXPERIENCE IN DEVELOPING FRENCH LANGUAGE COMMUNICATIONS
13 CLIENT REFERENCES
14 WHY ARE YOU INTERESTED IN OUR BUSINESS?

19
The ICA method is more open-ended, as they believe this approach can be more revealing. The ICA simply asks interested
Agencies to submit an outline of the Agency’s experience, capability, qualification and suitability to the assignment as described
in the brief and a one page from an agency asking why they are best for the business.

44
 EXHIBIT 3
INITIAL CREDENTIALS SUBMISSIONS RATING

The following example can be used for screening Agency credentials packages. This will need
to be modified to meet particular Advertiser needs.

Potential
Rater Score
Score
CAPABILITY –
DOES AGENCY HAVE THE SERVICES TO FULFILL THE 20%
ASSIGNMENT?
CONFLICTS/OWNERSHIP CONCERNS –
ARE THERE ANY CONCERNS? NOTE THIS IS NOT NS
SCORED BUT CAN ABORT EVALUATION.
SIZE –
DOES THE AGENCY HAVE A SCALE THAT IS SUFFICIENT 5%
TO HANDLE THIS ACCOUNT?
EXPERTISE –
DOES THE AGENCY HAVE THE SKILLS THAT WILL MEET 10%
OUR NEEDS?
CREATIVITY –
HAS THE AGENCY DEMONSTRATED A TRACK RECORD IN 10%
CREATIVE (RESULTS, RESEARCH, AWARDS)?
BUSINESS BUILDING –
HAS THE AGENCY DEMONSTRATED AN ABILITY TO
15%
ACHIEVE RESULTS (SUCCESSES, CASE STUDIES) AND
ARE THESE RELEVANT TO US?
STRATEGY –
IS THERE EVIDENCE OF STRATEGIC THINKING,
15%
CUSTOMER INSIGHTS AND A TRACK RECORD IN
PERSUASION/MOTIVATION?
GEOGRAPHY –
CAN THE AGENCY LIKELY DELIVER ON OUR
10%
REQUIREMENTS FOR MARKET COVERAGE AND
LOCAL/REGIONAL SERVICE ISSUES?
VALUE ADDED –
ARE THERE ANY UNIQUE CAPABILITIES, EXPERIENCE OR
5%
SKILLS THAT WOULD ADD PARTICULAR VALUE TO OUR
RELATIONSHIP WITH THIS AGENCY?
PRESENTATION –
WAS THE MATERIAL WELL PRESENTED? DID THE
10%
AGENCY FOLLOW THE BRIEF PROVIDED? WAS IT
INTERESTING/STIMULATING?
TOTAL 100%

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 EXHIBIT 4
AGENCY VISITS MEETING AGENDA

The following outline defines a typical agenda for the agency visits:

Purpose: Chemistry check, explore key issues

Structure: Low key, informal, little prior preparation
Timing: Approximately 1-1½ hours
Meeting: One way to differentiate Agencies is how they structure the meeting. What they
show, who is involved, what kind of questions that they ask, etc.

Agenda

1. Meeting President and key staff

2. Agency tour/services/resources

3. Briefing on Advertiser (overview, 20-30 minutes with hard copy)

4. Discussion areas:
• Conflict definition
• Remuneration Principles/Approach discussion
• Services required (in house/outside strategic allies)
• Sign Confidentiality agreement
• Creative development process
• Communications development process

5. Questions and Answers

• All information must be provided to all participating Agencies

6. Wrap Up

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 EXHIBIT 5
AGENCY VISIT EVALUATION RATING

This may need to be modified to meet particular Advertiser needs in individual searches. The
example shows sample scores. Advertisers often develop their own scales along similar lines.
Once all the meetings are complete, ask the Selection Committee to rank the Agencies in order
of preference with the purpose to focus discussion on the top choices, and rationale.

Rater Score Weighted

Weighting
(1 – 10 scale) Score
CAN THE AGENCY DO THE JOB?
Areas to consider are:
• Strategy (skills)
• Creative (reel/approach)
• Media Planning/Buying 8 40% 32
• Branding (skills, experience, approach)
• People (management, leadership, smarts)
• Services (strengths/weaknesses)
• Value Added (unique capabilities)
IS THERE A GOOD FIT?
• Fit/DNA relative to our company
• People – do they like each other; we like them?
• Culture – how we relate and interact 7 30% 21
• Compatibility – enjoy each other’s company
• Values – style, beliefs, attitudes, and ethics?
• Relationship – any sense of a bonding?
WILL WE WORK WELL TOGETHER?
• Work ethic
• Teamwork
6 30% 18
• A judgment about the long-term (this is difficult,
but very important)

SCORING TOTAL n/a 100% 71

OVERALL AGENCY EVALUATION –

Sometimes numbers do not quite reflect how you feel.
Please put one rating (A, B, C) in the last box.
A: I think we should seriously consider this Agency n/a n/a B
B: I am OK on this Agency
C: I would not vote for this Agency

COMMENT ON KEY STRENGTHS AND WEAKNESSES OF THIS AGENCY:

47
 EXHIBIT 6

CREDENTIALS PRESENTATIONS RATING - Optional Stage

The following sample rating form can be used for screening formal capability presentations. This
may need to be modified to meet the particular Advertiser characteristics in individual searches.

Potential
Rater Score
Score
CAPABILITY –
DOES AGENCY HAVE THE SKILLS AND SERVICES TO 20%
FULFILL THE ASSIGNMENT?
EXPERIENCE –
HAS THE AGENCY DEMONSTRATED RELEVANT KNOW- 20%
HOW AND EXPERIENCE?
COMPREHENSION –
DOES THE AGENCY CLEARLY UNDERSTAND THE
15%
ONGOING REQUIREMENTS OF THE ADVERTISER
ASSIGNMENT OR PROJECT?
PRESENTATION –
WAS THE MATERIAL WELL PRESENTED? DID THE
10%
AGENCY FOLLOW THE BRIEF PROVIDED? WAS IT
INTERESTING/STIMULATING?
PEOPLE/CULTURE –
IS THE AGENCY TEAM LIKELY COMPATIBLE WITH OUR 20%
ORGANIZATION? IS THERE A PERSONALITY MATCH?
OVERALL IMPRESSION –
HAVE THE AGENCY AND THEIR PEOPLE BEEN 15%
IMPRESSIVE THROUGHOUT THE PROCESS?
TOTAL 100%

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 EXHIBIT 7
WORK-SESSION RATING - Optional Stage

This follows a similar pattern to the Agency Visit rating form. It too may need to be modified to
meet particular Advertiser needs in individual searches. Once all the meetings are complete,
ask the Selection Committee to rank the Agencies in order of preference to focus discussion on
the top choices, and rationale.

Rater Score Weighted

Weighting
(1 – 10 scale) Score
CAPABILITIES –
Does the Agency team have the necessary
qualifications; is the Agency track record good; is the
8 20% 16
service package complete and can they deliver?
COMPREHENSION –
Does the Agency understand the requirements of this
assignment? Do they share our value systems for fast
7 20% 14
turnaround, value for money and attention to detail?
SERVICE–
Is there a good partnership/service mentality? Does the
Agency welcome our involvement? Do they strive for
6 20% 12
effectiveness and efficiency?
STRATEGIC & TACTICAL THINKING –
Did we see clear, well-reasoned thinking? Was there
innovation and ingenuity in the Agency’s solutions? Do
7 20% 14
they think in terms of our business success?
PEOPLE/CULTURE –
Is the Agency team compatible with our organization?
7 20% 14
Is there a personality match?

SCORING TOTAL n/a 100% 70

OVERALL AGENCY EVALUATION –

Sometimes numbers do not quite reflect how you feel.
Please put one rating (A, B, C) in the last box.
A: I think we should seriously consider this Agency n/a n/a B
B: I am OK on this Agency
C: I would not vote for this Agency

COMMENT ON KEY STRENGTHS AND WEAKNESSES OF THIS AGENCY:

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 EXHIBIT 8
MUTUAL CONFIDENTIALITY AGREEMENT

THIS NON-DISCLOSURE AGREEMENT is made as of the day of , 200 , between

Advertiser Name,
Street Address,
City, Province Postal Code
(“the Disclosing Party”)
- and –
,
,
,
(the “Receiving Party)

WHEREAS Advertiser Name has initiated a search for a supplier of Agency Services (referred to in this document as
the “Work”),

AND WHEREAS the parties to this agreement acknowledge that Advertiser Name will provide
, with verbal or written disclosure of information and documentation which may include
but is not limited to trade secrets, research data, technical information, computer systems and software, devices,
financial data and business plans relating to such Work (hereinafter collectively and separately referred to as the
“Information”) and the Parties wish to define and protect their rights with respect to Information that is to be
disclosed hereunder:

NOW THEREFORE, in consideration of the mutual covenants set out herein, the Parties agree as follows:

1. The Receiving Party shall not directly or indirectly, use, exploit or disclose such Information provided by
Advertiser Name in connection with the Work to any third party, for any purpose, except as described herein
or unless so authorized in writing by the Disclosing Party. For the purposes of injunctive relief, disclosure or use
of the Information or Materials (as defined in Section 6) by the Receiving Party in breach of this Agreement shall
be deemed to cause the Disclosing Party irreparable harm for which ordinary damages are not an adequate
remedy.

2. A receiving Party may disclose Information received under this Agreement only to those of its employees, agents
and consultants who need to know the information for the purposes set out herein, and shall, prior to such
disclosure, obtain their written agreement to comply with the restricted use and non-disclosure provisions of this
Agreement.

3. Information received under this Agreement shall not be mechanically copied or otherwise reproduced by a
Receiving Party without the written consent of the Disclosing Party, except for such copies as may be required
for the purposes set out herein. All copies shall contain the same proprietary and confidential designation that
appears on the original Information.

4. Neither Party shall be liable to the other Party for disclosure of Information received under this Agreement
where:

(a) The Information is or becomes part of the public domain through no breach of this Agreement;
(b) The Information is subsequently lawfully obtained by the Receiving Party from a third Party who is
established as a lawful source of the Information, without breach of this Agreement by the Receiving Party;
(c) The Information was known by the Receiving Party prior to its disclosure by the Disclosing Party and such
prior knowledge can be established; or
(d) The Disclosing Party has provided its prior written consent to such disclosure.

5. This Agreement shall not constitute any representation, warranty or guarantee to the Receiving Party by the
Disclosing Party with respect to the non-infringement of patents or other rights of third parties.

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6. The Disclosing Party shall not be liable to a Receiving Party for any errors or omissions in the Information
disclosed by it under this Agreement nor for the use or the results of the use of the Information by the Receiving
Party.

7. Upon direction of the Disclosing Party, the Receiving Party shall return or destroy all Information received under
this Agreement and all copies and other reproductions thereof.

8. This Agreement shall be construed in accordance with and governed by the laws of the Province of .
Canada.

9. Each Party represents that it is not now a party to, and shall not enter into any agreement in conflict with this
Agreement.

10. Where a court of competent jurisdiction declares any provision of this Agreement to be invalid or unenforceable,
the remaining provisions shall continue in full force and effect and all rights accrued under the enforceable
provisions shall survive such declaration.

11. This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective
successors and assigns.

12. No amendment to this Agreement shall be valid and effective unless made in writing and signed by an
authorized representative of each of the parties.

13. The term of this Agreement shall be for one (1) year from the date first set out above.

IN WITNESS, and Advertiser Name have executed this Agreement.

____________________________ ____________________________

Per: _________________________ Per: _________________________

Name: _________________________ Name: _________________________

Title: _________________________ Title: _________________________

Date: _________________________ Date: _________________________

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 EXHIBIT 9

Jani Yates

An alternative to doing the search yourself is to use ICA’s Agency Search Service
described in full at www.agencysearch.ca and summarized here.

THE ICA AGENCY SEARCH SERVICE

Introduction
Quite frequently when an advertiser is unhappy with an agency the best solution is for the
partners to discuss the issues in detail and for the current Agency to remodel/upgrade its
offering. We always recommend that this be explored fully as a first step. However, if a search
decision is made the ICA Search Services is a proven and objective approach.

There can be more to this than meets the eye.

We have studied best practices in the US, the UK, and of course Canada. These are the key
issues that an advertiser needs to consider:

• Efficiency and productivity. The search can be far more demanding than first realized
(diverting key Advertiser staff away from their business responsibilities).

• Search-design. The objective is to find the best partner, for immediate needs, and for the
long-term. Given this goal, some common search practices are actually counter-
productive.20

• Objectivity. Different stakeholders at the Advertiser can have very different views. Silo
thinking can become an issue. Emotions can run high.

• Avoiding the media circus. This can be very damaging, especially if there is a question
(even if undeserved) about the objectivity of the search.

• A level playing field. This needs a fair and equitable process.

The ICA Search Service deals with all of these. In addition, it is free, except for a nominal
administrating fee, and fast.

20
We are referring to “dog and pony” presentations, particularly those using outside help that will not be part of the
ongoing service. This is discussed on page 26-30 of this document.

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The ICA Search Service Key Points
We have conducted over 100 Agency searches, for Advertisers with total billings in excess of
$200 million. While this has involved searches for advertisers spending $15 million annually,
our approach also works well for smaller advertisers avoiding long drawn out searches involving
speculative projects which are wasteful and non-predictive. We have honed and upgraded our
service as follows:
• The ICA service is confidential and free of charge except for a nominal administrative fee.
• This is done without naming you, the Advertiser, except at the very end.
• Process saves the Advertiser both time and money through a streamlined best practice
process and does not require the level of staff time needed of other processes.
• We avoid the mechanistic RFP approach, which often equates to a cattle call. Using our
knowledge (in consultation with you) we design a “Request for Interest” questionnaire that
provides a blind brief of your needs. It encourages only the most qualified Agencies to
reply.
• Agencies can differentiate themselves from the first stage by the look, feel and content of
how they respond to the brief rather than completing formatted questionnaires that result in
similar looking responses.
• By sending the brief out to all ICA members, it reaches a broader audience that in turn can
objectively decide if they meet the advertiser’s requirements and ensures response content
is the most up-to-date available.
• The search covers all our members, but also includes any Agency you wish to add.
• You can then select a short-list of 4-6 candidates before you go public.
• We then lay great stress on a major piece of learning. The best assessment of an Agency
comes from seeing them as they are—not in a “dog and pony show.” This is achieved by the
Agency Visit.
• Many final decisions are made after the Agency Visits. If you still feel the need for a
presentation, we recommend a Work-Session. The key feature is that the Agency has to
show its abilities in real time i.e. they cannot access outside resources that would not be
part of the ongoing relationship.
• The ICA is there to help you at every stage but, very importantly, we play absolutely no role
in the decision. This is entirely your business and decision.
• The use of the ICA Search Service can pre-empt any bad press because it is an open,
transparent best practice process.

To contact us, call Jani Yates (ext. 230).

E-mail is jyates@icacanada.ca and visit www.agencysearch.ca

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