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CONSULTANTS MAY FACE CODE AGENCIES WANT ACCOUNT BROKERS HELD TO ETHICS RULES

By Published on .

Agency search consultants are coming under increased scrutiny on Madison Avenue by agencies that believe the fast-growing and meddlesome industry should be more closely watched.

Toward that end, the American Association ofAdvertising Agencies wants to set up a code of ethics for consultants who broker millions of dollars of business a year.

"A number of our members are concerned about the role and influence of search consultants in the agency review process," said O. Burtch Drake, Four A's president. "These consultants don't have a trade association; they aren't certified in any way; and yet they are important players in decisions affecting millions and millions of dollars in advertising spending for our members and their clients."

What rankles agencies is some consultants' request they submit sensitive financial information to participate in reviews. Agency executives worry the confidential data is then used to help negotiate agency compensation and determine a group's fitness to handle prospective clients.

Major advertisers such as BMW of North America, Burger King Corp., Sprint and Seagram Co. used consultants to help them evaluate and pick an agency in their most recent reviews.

The Four A's plans to set up a code of ethics for consultants that advertisers could use when selecting a third party to guide their agency searches.

"We're going to ask the Association of National Advertisers if they will meet with us to discuss our concerns in this area," said Mr. Drake, who estimates there are 50 active search consultants. "Where that leads, we will see."

One of the largest advertiser consultancies, Morgan, Anderson & Co., New York, which consistently requests agency financials, is probably the least popular on Madison Avenue.

Even so, Principal Lee Anne Morgan, who defends clients' right to query agencies before investing millions of dollars in them, said she supports the notion of industry guidelines.

"There should be some sort of association where people like ourselves can be found and trusted," she said. "But I think if the ANA and the Four A's were to do it fairly and correctly then they should have a dialogue if they have an issue with us or any bona fide consultant."

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