Standard bearers

The Point of Purchase Advertising Institute standards promote good practice in the sector and raise the industry’s profile, but many clients argue that more regulation is needed.

Whether companies are members of the Point of Purchase Advertising Institute (Popai) or not, every business operating in the sector has probably benefited from its Standards of Practice.

Introduced in 1995, to create a benchmark for professional companies working in the point of purchase (POP) field, the code has played a pivotal role in transforming a cottage industry into a vital ingredient in the modern marketing mix.

The 26-page standards document recognises the importance of POP in a changing retail market and, as well as outlining the responsibilities of clients, agencies and production companies, it covers competition law and contentious issues such as intellectual property ownership and remuneration of design work.

Tracy Scutt, Popai chairman and sales and marketing director at Arken Display Solutions, says: “The standards of practice form the cornerstone of any new member’s introduction to Popai and the company is made aware of its existence when the application is reviewed by the Popai executive committee. In line with these standards we would consider the company’s business record, integrity and experience within our industry, along with its skill and originality within the field of POP.”

The standards were drawn up more than four years ago, and were based on a similar code of ethics in the US where Popai was founded in 1936. The European office was not formed until 1988 when an office opened in Paris and the US code was adapted by Fords Design Group chief executive Martin Law, when he was Popai chairman, to create common standards across Europe.

Fords, which was acquired by European POP company Arno in January, remains a staunch supporter of the Popai standards of practice. “POP has grown to be such an important part of marketing with big budgets that brand marketing directors want to know their projects are being handled by professional and experienced POP companies. The code helps them to put criteria together for selecting a POP partner and takes them through how a project would develop. Since the publication of the booklet, I have come across a number of occasions when clients have briefed us using extracts from the booklet,” says Law.

Fords sales director Stephen Henley says that with global POP standards effectively in place, UK companies can confidently form strategic alliances with other Popai members around the world. “Popai is arguably the only true worldwide communication trade body and we know we can trust partners in other countries which follow the same ethical code. We work closely with CDA in the US, for instance, while we can talk to other members about different issues such as health and safety matters and share research data,” he says.

Another founder member and architect of the Popai standards was Artform, and new business manager Neil Halford says the code works because it was written with clients and suppliers in mind. “In the mid-Nineties, the code was needed because the industry was so young and suppliers were inexperienced. Today, the code is always in the background during negotiations and it gives clients reassurance that as a supplier we have signed up and adhere to certain standards, even if the code makes little difference to our day-to-day business,” he says.

Access to international POP research was one of the reasons why pharmaceutical manufacturer Reckitt & Colman joined Popai before Christmas. Trade relationship manager Phillipa Sage was aware that a code of practice existed and says it helped convince the company to apply for membership.

“It is useful for any trade body to have a set of ethical standards and the booklet has provided us with advice on buying POP services and the fulfilment of those services,” she says.

The standards booklet explains accepted industry ethics, such as making sure members abide by all UK and EU laws, ensuring the highest level of integrity, and that all relevant company policies – including pricing – are communicated before entering into a business relationship.

There is advice on planning a POP campaign, outlining the role of the advertiser, the retailer and POP supplier, and standards concerning the production of POP with rules on the provision of samples and the responsibility advertisers must take for paying for modifications. The booklet clarifies Popai policies on overruns, cancellations and general contractual terms.

Establish who owns copyright

The code also outlines how the brand and POP supplier must agree early on in negotiations who owns the copyright, designs and materials for a project that might have involved the input of a number of parties, including the retailer.

Popai chairman Scutt says: “Best practice would dictate that the marketer, retailer or agency has ownership of a design independently created by them. However, when designs are provided to a producer for manufacturing it is not always clear as to their point of origin. Additionally, during briefing and pitching processes, high design costs can be incurred so the Standards of Practice urge all parties to clarify as early as possible the position of ownership.”

The Standards of Practice are ultimately about promoting good practice but it is uncertain whether Popai has the teeth to discipline any member who flouts the code. Complaints regarding member companies can be made to the executive committee, but Popai says none have been received since the standards were introduced.

Kesslers International marketing director Charles Kessler says it is difficult to say whether the code is enforceable. “We do know that it encourages the industry as a whole to practise good policy and habits. We all benefit from good ethics and the standards have played an important role in POP’s gain in stature in recent years,” he says.

Non-members of Popai accept that the standards of practice have raised the industry profile and acted as a useful promotional tool. Field marketing company CPM International even feels the time might be right to join Popai. Managing director Tom Priest says POP clients obviously welcome the Popai standards but says one main reassurance they need is to know their display material is being sited.

“We have our own code regarding this and when a contract is negotiated we agree what level of audit a client wants. There are different costs involved depending on whether they require a simple telephone survey of retailers or want our team to visit shops,” he says. “POP clients also want reassurance about health and safety issues – the practicality of siting a display can be sacrificed on the altar of creativity,” he says.

Another field marketing company which works regularly with POP suppliers is EMSChiara. Managing director Richard Thompson says the Popai standards of practice should be updated to show that members are addressing modern retail and display issues. “The code should focus on positioning within a store as well as display, assuring clients that suppliers will do everything they can to secure ‘hot spots’ within a shop,” he says.

Standards must be whiter than white

Popai has traditionally tried to attract more sales promotion companies into its membership but one company that will not join is The Marketing Store Worldwide. Its client services director Andrew Kingham says he is confident the company’s own in-house standards are tighter than the Popai code. “We are responsible for ensuring all campaign angles are covered from designing to siting. If we failed we would not survive. If something goes wrong the brand might take a public lashing, but our reputation could be permanently damaged which means our standards must be whiter than white,” he says.

The Marketing Store Worldwide is one of a growing number of marketing companies to use professional indemnity insurance. Taking out a policy means blue chip clients can still use small creative agencies for design and promotional work but they are able to take legal action to protect their brand if an agency makes a serious error.

One company offering professional indemnity insurance is PIMS-SCA which is not a Popai member but is offering POP suppliers an average level of cover of about &£2m a year with policies starting at &£7,500.

“Many clients argue that despite the Popai standards there is still not enough regulation covering this sector. This insurance protects suppliers and agencies from action against them by big brands. Many brands have made corporate decisions to deal only with suppliers that have taken out professional indemnity policies,” says PIMS-SCA joint managing director Charles O’Reilly.

The Popai standards of practice are at the core of the POP agenda it has been pushing for a number of years. Whether it is enforceable or not its existence is helping to convince advertisers and retailers of the merits of the sector.

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