Contract offers mutual benefits

Agencies will inevitably differ in their estimation of the UK’s new model contract for advertisers and agencies. However, its launch is the latest evidence of a more collaborative relationship between Europe’s agencies and advertisers.

Announcing the UK initiative, the Institute of Practitioners of Advertising drew attention to a survey of its members, which found that 70 per cent of large agencies (income over 12m) spend more than 25 days (175 hours) per year negotiating contracts with their clients. It also found that 45 per cent of client/agency relationships were not covered by full

contracts and that unnecessary amounts of time were spent negotiating individual contracts.

“The average time spent on negotiating a single agency contract is 38 hours. This is unacceptable – particularly when most advertisers have multiple agency relationships.” commented Incorporated Society of British Advertisers’ Debbie Morrison. “ISBA is confident that this model contract will fulfil an important time and money saving role.”

The existence of such a model will financially benefit those involved in contractual negotiations. But its real significance goes beyond pecuniary benefits. It is symptomatic of a growing determination among agencies and advertisers throughout Europe to work more closely together on addressing major industry issues.

In Spain, for example, the recently elected president of the Spanish advertising agency association, Paco Gonzalez, has been praised for his efforts in building closer links between advertisers and agencies.

During the past few years, France and Germany have also seen a number of initiatives and trends which reflect a desire for advertisers and agencies to work more closely together.

France’s advertising industry has used a model contract since 1961, but the formula was made obsolete by the introduction of the Loi Sapin in 1993. The new law has effectively forced agencies and advertisers to re-evaluate the questions of contractual agreements and to develop a model suited to new conditions. In addition to the revised model contract, the French have made efforts to create a written framework for improving working procedures.

In Germany, the recognition by advertisers and agencies of mutual interest is reflected in the increasing importance of the Effie awards. Judged by agencies and advertisers, the awards acknowledge that advertising is a partnership between agency and client and that the success of the former is measured only by the performance of its clients brands.

In all cases, a belief in partnership has led to more successful long-term agency and client relationships. Such initiatives will become especially valuable as the industry enters a period of worldwide economic uncertainty.

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