Trade Group Blasts Agencies For Shady In-House Post Practices

AICE Charges Shops Are Unethical, Lack Transparency, Have 'Unfair Advantage'

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As the proliferation of agencies creating in-house post-production capabilities continues, a trade group representing the post-production industry is blasting the agency world, claiming there are transparency, competition and ethical concerns with the practice moving in-house.

AICE Executive Director Rachelle Madden
AICE Executive Director Rachelle Madden

The Association of Independent Creative Editors today posted a statement on its website airing a number of grievances about "business practices surrounding [the] current implementation" of in-house production capabilities at agencies. Among other things, it claims that agencies steering post-production work to their own facilities is an overt conflict of interest. Overall, the AICE claims agencies lack transparency, ethics and fairness in relation to getting business for their own post-production facilities, and said that agencies have an "unfair advantage" when it comes to post production, given their direct access to clients that post houses don't have.

It's unclear whether the complaint will result in any sort of change in policy, but the group said it's priority is making clients aware of what it perceives as serious issues. "Our primary goal in issuing this statement is to raise awareness on the part of the advertiser community and urge them to seek a greater level of transparency from their agencies when it comes to how their post-production work is handled," said AICE Executive Director Rachelle Madden in a statement to Ad Age. "While we certainly don't expect agencies to eliminate their in-house facilities, we simply want to bring more transparency to the process and help level the playing field in terms of competing fairly and honestly for their clients' work."

Among the AICE's chief concerns: It maintains that clients are somewhat in the dark about what they're getting from in-house post production at agencies, and that clients may not be getting the best services or biggest bang for their buck from in-house post services. "We believe some marketers are not fully aware of what they're getting when their work is completed at agency in-house facilities, or whether the use of them represents the best option to ensure the best final product and the best talent for their money," it said. The statement also calls out in-house entities for not always properly identifying themselves, because the bidding process is not always done out in the open, and said some agencies use generic or alternate unrelated names for in-house production.

The AICE also charges that some agencies are unethical with "check bids," a process in which agencies ask post-production houses for "ostensibly competitive bids which they can submit to clients for comparison." Calling it a corrupt and potentially illegal practice, the AICE said that it feels agencies usually have no plans to award the work to the outside post house and that they agencies are using the "check bid" to satisfy client requirements for multiple bids.

AICE's members "often feel coerced into cooperating with for fear of alienating an agency and thereby risk being blacklisted for future jobs," said the statement.

AICE said that agencies also have an unfair advantage in the check-bid process because they are allowed to see what post houses are bidding, and can then potentially undercut the bids. "It would never be considered appropriate for a company to share external vendors' bids with each other, so why should one 'vendor' (i.e., the in-house agency) be allowed to craft its bids knowing what its competitors are doing?" the statement noted.

The Association of National Advertisers posted a note about the AICE statement on its blog authored by Bill Duggan, group exec VP at the ANA. The post noted that the ANA has previously made known its concerns about trancparency in media buying, noting that "concerns about the level of transparency of media agencies is likely at an all-time high."

"The ANA applauds the fact that AICE has voiced concerns about transparency issues in post production," said Mr. Duggan in the ANA post. "We will help educate ANA members on this issue and suggest that they have conversations to fully understand the in-house editorial and post services offered by their ad agencies."

The AICE statement concluded: "AICE is determined to educate the client community on the ramifications of using agency in-house post production facilities, the inherent conflicts they present and the impact they have on their ability to get the best possible product at the best price. Our goal is for clients to be able to make informed decisions about where their commercial content should be finished, and by whom."

The AICE was recently vocal about the extended payment terms issue. In June, the group released a statement blasting Mars and Global CMO Bruce McCall for the company's 120-day payment terms, calling the policy "patently unfair" to its members and "directly threatens their financial future."

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