There’s always two-sides to a story and the on-going tussle between The Association of Advertising Producers (ASAP), a self regulatory body consisting of 82 independent film production companies and network agencies, is a case in point. While the former accuses network agencies of unethical practices in the garb of running film production firms, the latter claim that running its own shop, has eased the entire process.
In an email response to ETBE, an ASAP spokesperson, said that the body has corresponded with the advertisers in India, through a letter. “The letter was sent to all advertisers, who were part of our list which we created based on information gathered from all ASAP members. It has been addressed to company CEOs, CFOs, CMOs and brand managers,” the spokesperson added.
According to the self regulatory body, advertisers who have been deceived have already taken relevant action. “Some clients have also passed a diktat that the agencies cannot push through agency-owned production houses (AOPH) on their projects,” it said.
Further in the same email, ASAP has proposed that advertisers should ask their network agencies to invite tenders, ‘on an arm’s length basis without any unfair trade discrimination’. At the same time agencies shouldn’t be permitted to submit or invite bids from their own production firms. “In case bids are unavoidable by advertisers we suggest implementing a closed tender process to offer a level playing field which will be in the larger interest of the advertising industry,” the body added.
Last week, ETBE had reported that ASAP had sent a letter to advertisers highlighting conflict-of-interest created by AOPH. The letter highlighted that there are numerous cases where network agencies have insisted on co-productions thereby demanding a percentage of profits, kick-backs in the garb of agency commission.
Even as most network agencies run their own production firm, highly placed industry sources claim that the issue might be about one single production house – Publicis Groupe owned, Prodigious.
In an email response, Publicis Groupe, Spokesperson, said, “The production business has been living working almost in a cartel system with a few directors owned production houses working in tight cohorts with a handful of agencies with opaque pricing and choice spectrum. The attempt with Prodigious is to break this compromise in favour of our clients with transparent pricing and a huge spectrum of choices in terms of directors.”
Less than 36 months old, the production firm, has its own line producers and manages its own productions. The outfit works for Publicis Groupe owned agencies including Publicis WW, L&K|S&S, Leo Burnett, Indigo Consulting, MSL Group, Digitas, among others. As per sources close to the development, more than 50% of all production is managed by Prodigious.
As per the spokesperson from Publicis Groupe, this has unleashed tremendous value for its clients in terms of cost advantage and a buffet of talent, Indian and international, to choose from. “Every category goes through this moment where value is unleashed in favour of the customer. We invite the larger industry of producers to be a part of the open system of choice and pricing and build an open system too for our clients,” he added.
Prodigious over the past years have produced films for brands such as Apple, Bajaj, Garnier, Jeep, Amazon, Skoda, Nestle, Renault, Viacom, Patanjali, Dabur, Hero, P&G, Bridgestone, among others. It claims to have over 100 directors on their panel.
For Sumeet Narang, VP-marketing, Motorcycles, Bajaj Auto, (the auto firm is one of the clients of Prodigious) working with agency-owned production house has offered the flexibility of selecting a director, who as per the brand had the potential to deliver the best result for its projects. It also gave the agency a better control over the project allowing it to experiment with different music, edit pattern and post production choices, “We select the production house basis their recommended director’s profile, production vision and cost. The pitch from Prodigious was a better value proposition in the first place,” he added.
Everyones’ in it
Interestingly, Publicis Groupe isn’t the lone ranger. WPP Group runs Hogarth and Small Fry, while Interpublic Group owned agency Mullen Lintas runs its own production firm.
According to Barry Wacksman, vice-chairman and global chief strategy officer, R/GA, the need to expand services was recognised long time back by the agency. His agency took on production as they saw a myriad of opportunities for clients to create and distribute content. “This was an opportunity agencies didn’t have access to before.”
Furthermore, as agencies fight for wafer thin margins and commission, running a production house, allows to earn higher revenue. Joseph George, chairman and MD, Tilt Brand Solutions noted that the conception and production of video assets have become critical in the very structuring of an agency model. “However all in-house production needs to be evaluated from the point of requirements. In our own case, of the 20 films we have created in the past few months of our operations, only 10 of them have been in-housed,” George said.
According to Rohit Ohri group chairman and CEO, FCB India, the most important factor in any such initiative by advertising agencies is transparency. Ohri warns that clients must be fully aware of how financials are structured.” If clients are choosing to work with agency production houses, they must be enabled to make a considered and an informed choice,” he explained.
Last year, FCB Global Network, part of IPG, announced the launch of FuelContent, the network’s content production arm that specialises in film, animation, visual effects, post production, virtual reality, among others.
MullenLowe Lintas is yet another agency to run its own production unit LinProductions, which was launched in early 2011.
For Amer Jaleel, group CCO and chairman, MullenLowe Lintas Group, the generic allegations by ASAP are serious and very damaging to the agency’s and industry’s reputation. “ASAP should come out in the open and systematically ban or penalise the agency which indulges in such unethical practices. Not malign the industry by putting out sweeping statements in the press that damages our reputation,” he said.
MullenLow Lintas Group, claims that it collectively makes close to 600 films every year through various production houses.
Wacksman, pointed out that running in-house production firms can’t be the end- point for agencies, “as they need to expand into different areas like design and technology,” he said.