Want in that review? Pay up

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Jeff Goodby received a congratulatory fax last month so giddy that staffers at Goodby, Silverstein & Partners initially thought he'd won the Publishers' Clearing House sweepstakes.

"Congratulations! Your agency has been selected as a candidate for this new-business opportunity," said the bold-faced letter from online-search consultancy Agencyfinder.com. Accompanying the document was a detailed request for proposal for American Century Investments' $10 million to $25 million advertising account. There was one catch, however: To become a "certified" contender for the pitch, the shop had to deal with a $5,500 "invoice" payable to Agencyfinder.com.

"Be considerate of others," it continued. "Notify us by fax, e-mail or phone if you're out. That way, if necessary, we can extend another invitation to see that this client's desires are met."

"It's a shameful practice, despicable," said Harold Sogard, general manager of the San Francisco based Omnicom shop, comparing it to promotions where you have a chance to win a trip around the world, but only if you buy "a $300 air freshener." Goodby Silverstein declined to participate in the review primarily because of the shop's conflicting Discover Card account as well as the fee, he said.

Like it or not, with marketers' growing emphasis on ROI and procurement playing a larger role in advertising, online search reviews are coming of age. "This model is right for today's way of doing business," said Charles Meyst, chairman-CEO of Agencyfinder.com and its parent company, Business Partnering International, Glenn Allen, Va. The agency fees charged to be part of the registry and participate in reviews are justified, he said, because "we see ourselves as an extension of an agency's new-business process."

`ridiculous'

He said he was mystified by Mr. Sogard's reaction. "I'm embarrassed that anyone from a firm as fine as Goodby Silverstein would make such a ridiculous and unfounded statement." He added that "the cost of searches has to be borne by someone" and agencies looking for new business are the logical choice.

Mr. Meyst said Agencyfinder has conducted over 5,500 searches in its almost nine years of operation and averages 34 searches a month, or 404 last year. That's the equivalent of more than 50% of the 745 reviews Advertising Age's Account Intelligence tracked in 2004, including non-U.S. searches.

While many of Agencyfinder.com's searches are for accounts that have $500,000 or less in billings, in the past 60 days the agency has come up with two searches up to $20 million (for American Century and another he won't identify). There has also been a $50 million review for a home-furnishings marketer Mr. Meyst also declined to name.

American Century VP-Marketing Catherine Bernard, who is conducting the search, did not return calls for comment, but other marketers were happy to discuss their experience.

Sharon Robbins, marketing director, Oak Street Mortgage, Carmel, Ind., originator of $2 billion in loans with offices nationwide, said she was looking for a public-relations shop to handle an account with a $200,000 fee. But she personally had little experience with reviews. Agencyfinder.com provided her with a group of contenders that included an arm of Havas' Euro RSCG, but she wound up with independent shop Edelman, she said. "It was like having this resource in-house."

Ms. Robbins had some concerns that not all agencies she might be interested in would be willing to pay to participate in the Agencyfinder.com review. But Rosanne Miller, global brand manager for surfaces business at DuPont, Wilmington, Del., said an agency's balking at paying fees "could be indicative of an attitude overall" that is negative.

No doubt the free-to-marketers online search may be contributing to Agencyfinder.com's success, but it is also a reflection of the evolution of today's business environment where online shopping and matchmaking are winning over confidence. "Everything I do is online," said one senior marketing executive in southern California who was pleased the process involved a lot less drama than the traditional agency search. Underscoring the theme of a banner ad on the site that reads: "Search in your underwear. No one will know," he said he was about 80%through his review before it became public.

sticking with tradition

Public or private, free or not, many marketers, even ones with smaller brands, want a more hands-on, traditional agency decision-making process. Joe Lupica, marketing manager for Biohydration Research Lab, Carlsbad, Calif., is planning to take its ultra-pure Penta Water brand beyond health-food-store outlets with an estimated $5 million marketing budget. He hired NYCA, Encinitas, Calif., an agency he knew well because he had earlier worked with CEO Michael Mark. "I talked with other agencies," said Mr. Lupica, but in the end selected NYCA because "it was a good fit."

Online agency-search consultants have provided a good fit for some agencies. "I love those guys," said Glen Sagon, CEO at Sagon/Phior, West Los Angeles, who said that 45% of his agency's business comes from agencyfinder.com or other Web sites and that online sites provide qualified leads. "I'm not on a hunting or fishing expedition," he said, adding that the site's operators "hold the client's feet to the fire and make sure the client handles the review in a fair fashion."

But the misgivings of Goodby Silverstein's Mr. Sogard are shared by many large shops. "I don't know if the online search accurately conveys the culture of the agency and what it would be like to work with them," said Brian Martin, director -business development, WPP Group's JWT, New York.

The online-search model long has been controversial. Some agency consultants charge agencies to be part of a "library" and then charge additional fees to marketers for the search. "The registry business is fraught with all kinds of conflicts," said Dan Pearlman, co-managing partner and co-CEO, Bob Wolf Partners/TPG, a Century City, Calif.-based consultant. Some successful consultants, such as Select Resources International, have modified models by offering agencies new-business makeovers or consultations, but have dropped their libraries and opened reviews to all contenders.

Still, one traditional consultant, who asked to be anonymous, said free-to-marketers online services raise an important question for both agencies and their prospective clients. "If a marketer is cheap in holding a review, what would it be like as a client? Match.com is great for singles, but for finding your ad agency?"

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