TOP AD AGENCIES CHALLENGE ETHICS OF CONSULTANTS: 4A'S RESPONDS AS USE OF ADVISERS IN ACCOUNT REVIEWS PROLIFERATES

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Ad agencies, frustrated by the proliferation of consultants in account reviews, are taking a stand against what they say are questionable-and sometimes unethical-business practices.

The American Association of Advertising Agencies today will release new-business guidelines designed to affect how consultants and marketers manage agency searches (see Page 64). The guidelines were created by the Four A's New Business Committee, made up of 22 leading agencies including BBDO Worldwide, Leo Burnett Co. and Saatchi & Saatchi Advertising.

And while the release of voluntary guidelines by itself falls short of a declaration of war, agency executives say it does represent the drawing of a line in the sand.

"Clients don't know what consultants are doing in their name. If clients only knew, they'd be shocked," said O. Burtch Drake, Four A's president-CEO. "We're not tarring all consultants with this brush, but there are some practitioners and practices that we have problems with."

FEES FROM MARKETERS, SHOPS

Those practices, agency executives said, include consultants taking fees from both marketers and agencies, and collecting proprietary financial data from agencies for their own databases rather than at clients' requests.

Consultants "started in overall agency searches, but now they've gotten very much involved in [negotiating agency] compensation .. . that's where some of the real concern is," said Charles Decker Jr., Four A's senior VP-management services and head of its new business committee. "Now they can fish, collect and gather data" from agencies since there has been no code of ethics.

Some agencies also have come to resent consultants because they believe consultants can disrupt stable relationships by encouraging marketers to place accounts in review.

According to the Four A's, 70% of all new-business reviews involving the top 10 agencies now are run by consultants. The Four A's tracks 39 consultants, though some agency new-business directors said they are in contact with upwards of 75 to 100 consultants.

COMPLEX PROCESS

Marketers are turning to consultants more often to simplify the complex process of picking a new agency. Consultants also often take on the unpleasant task of negotiating agency compensation.

Although "a good consultant is a valuable tool for the agency .*.*. these rules are needed now because there are more consultants than ever before," said Peter Drakoulias, exec VP-director of business development for Deutsch, New York, and a member of the Four A's New Business Committee. "As their roles increase and they become more prevalent, guidelines have to be put in place so [reviews] are fair and equitable."

GUIDELINES CALLED FAIR

But consultant Skip Pile of Boston-based Pile & Co. said that while the guidelines are fair, consultants can't be "expected to follow the guidelines of an industry association that won't let us become members."

Of seven consultants interviewed by Advertising Age, a majority said the guidelines were vague and complained they were created without input from consultants or marketers.

"It's a pity not to have had a balanced task force come up with this," said Lee Anne Morgan, principal at Morgan, Anderson & Co. "There may be loopholes because the wording is so vague."

Ron Cox, group VP at Wm. Wrigley Co. and outgoing chairman of the Association of National Advertisers, called the guidelines "a laudable experiment" but noted, "The Four A's . . . doesn't set all the rules. The clients set the rules."

DON'T NEED CONSULTANTS

An executive with another leading marketer, however, doesn't see the need for consultants at all.

"All any person needs to select an agency is a set of eyes and ears, a brain and a Red Book," this executive said. "Red Book" is industry jargon for the Standard Directory of Advertising Agencies.

Consultants' services vary widely. The Advertising Agency Register, New York, and Select Resources International, West Hollywood, Calif., act as a library for clients-listing information on member agencies. Agencies pay a fee-usually several thousand dollars-to be listed in the consultants' databases. Marketers also pay fees to AAR and SRI for their screening services, and SRI gets a $5,000 fee from the winning agency (see story on this page).

Consultants like ADvice & ADvisors, New York, and Richard Roth Associates, Chappaqua, N.Y., meanwhile, consult for both agencies and marketers.

"A consultant can consult for both an agency and a client if it's ethical and with full disclosure," Richard Roth said. "In the long term, there are benefits to the total advertising community."

FAUX QUESTIONNAIRES?

Some agency new-business executives accused consultants of sending out faux questionnaires to gather data for their own use.

Three agency executives said they suspect one questionnaire sent out by Morgan Anderson was used to mine such data.

Ms. Morgan denied that, saying the questionnaire was for a global client that wished to remain anonymous.

"There was no way that client could be disclosed," she said, adding she couldn't "imagine" any reputable consultant "would play a silly game like that."

And although consultants deny it, several agency executives said they believe their chances of winning a review are hurt if they decline to fill out questionnaires.

The fear of getting "black marks," they added, may explain why the Four A's hasn't taken a stand before now. Contributing: Judann Pollack, Alice Z. Cuneo,

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