Is trade body merger talk a first swallow?

An IPA/SPCA merger appears to make good sense as the distinction between above and below the line blurs. But who will foot the bill?

Trade bodies the Institute of Practitioners in Advertising (IPA) and Sales Promotion Consultants Association (SPCA) could not be more different in terms of the issues facing their members. So the fact they are in merger talks is surprising.

The IPA – a traditional mouthpiece of the big ad agencies – has a high-profile campaigning role, fighting its members’ corner over contracts and payments from clients. The organisation also defends the freedom to advertise and is at present trying to see off the threat of a ban on advertising to children when Sweden takes up the presidency of the European Union in August.

The SPCA is a smaller, more specialist organisation, formed 12 years ago to represent the interests of a small group of sales promotion consultants which felt they were not properly served by industry body the Institute of Sales Promotion (ISP). Its members are below-the-line specialists steeped in the arcane – and often legally complex – world of scratchcards, money-off coupons, shelf-wobblers and prize draws.

The SPCA retains strong links with the ISP, all of its members being part of the larger organisation, which gives them access to better training facilities, legal advice and stronger lobbying power. With only 50 members, the SPCA has sometimes found it hard to make its presence felt, and it has been seeking a partner for some time.

At one time, it was expected to join the rapidly-expanding Direct Marketing Association (DMA), which in the past year alone has swallowed up the Field Marketing Association and Association of Household Distributors. But the initial talks came to nothing.

In merging with the IPA, the SPCA risks being overshadowed because of ad agencies’ traditional condescension towards below-the-line work. But soon-to-retire IPA director Nick Phillips insists attitudes are changing: “The young generation in advertising has the commercial nous to understand the importance of below the line. It is the message coming from their clients.”

In fact, the SPCA and IPA have been steadily moving closer together – and now share 25 members.

Perhaps, rather than the IPA coming to the rescue of the smaller organisation, it needs the SPCA to stay in touch with its members.

Phillips agrees that the merger plan is part of the IPA’s long-term strategy of expanding beyond advertising. He says: “In his inaugural speech, IPA president Rupert Howell made it clear he wanted us to reflect the huge changes that are going on in marketing communications, and the changes in customer demands.”

New media agencies, direct marketing and sponsorship brokers are also on the IPA’s shopping list, although, according to Phillips, design and packaging agencies, public relations consultancies, telemarketing companies and media research groups are not.

Membership of the IPA elite will not come cheap. Phillips says: “As an organisation, we are a Rolls-Royce rather than a Mini. That means we have invested in the secretariat. It is more expensive, but it is a bigger and more ambitious operation.”

DMA director general Colin Lloyd comments: “It sounds as though the IPA has had a wake-up call from its members, in the same way that I had a wake-up call from mine five years ago, which is why we have expanded in the way we have.”

Despite the extra costs involved, SPCA chairman Clive Mishon is upbeat: “We want to create an organisation that is relevant to today. The conversations we have had so far have been fruitful.”

But he warns: “The conversations won’t go anywhere if we believe a hierarchical attitude exists. It will not work if it is a two-class citizen state.

“The idea is to create something which is more powerful and more relevant, and not dilute something which is already a very effective force. It is about adding value.”

Mishon believes the way ahead is to have one body to represent clients, such as the Incorporated Society of British Advertisers, one for agencies and another for the different marketing disciplines.

He claims he was unwilling to merge with the ISP or DMA because both include clients and agencies, leading to a potential conflict of interest, particularly in the area of contracts.

Predictably, Simon Mahoney, chairman of the ISP, believes its strength lies in the diversity of its membership. He says: “The ISP is still the only organisation which represents the whole broad church of the industry.”

Like Lloyd, Mahoney does not believe a single body for the whole marketing industry is on the cards. He comments: “Just because the IPA and SPCA are talking about merging doesn’t mean the whole industry has to follow suit. There is still an enormous demand for what we do, judging by the number of new members we get every month.”

If the distinction between above- and below-the-line agencies continues to blur, it makes sense for the SPCA and ISP to get together. Their members are increasingly likely to face the same issues – particularly in relation to new media and European law – and be part of the same agency network.

The final test of whether the merger can work will come when small to medium-sized SPCA members that are not part of a global network are asked to pay more for a service which is not designed solely to serve their interests.

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