AAI threat to production mark-ups

Agency Assessments International (AAI), which advises clients on advertising pitches, is extending its remit to oversee advertisers’ relationships with production companies.

The company claims advertisers can save up to 65 per cent of production costs by taking the task away from creative agencies. AAI says that there are a number of global and domestic production houses that advertisers could access directly.

The move is controversial, because creative agencies have traditionally handled production and billed advertisers for the service. One insider says: “This is going to cause problems. Agencies make money on production costs, because they mark it up and their clients don’t realise.”

AAI’s new division is headed by Simon Moore, who joined the company from now-defunct agency Cave Anholt Jonason at the end of last year.

AAI managing director Charles Kirschner says his organisation has case studies from advertisers, including Seagram, which have outsourced production and saved money.

Kirschner adds: “This is essentially what happened with media work. The unbundling of media upset a few agencies when it first started, but it made a huge amount of difference to the client. There are a number of advertisers already working with their own production companies, and we are offering a service for those that want to, but don’t know how to go about it.”

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