Blamer Roils Agency Consultants With 'Double-Dip' Charges

NEW YORK (AdAge.com) -- Steve Blamer is an ad exec who has never strayed too far from controversy, whether it was contract battles with WPP CEO Martin Sorrell over his departure from Grey, or his exit from Interpublic in the wake of Foote Cone & Belding's merger with Draft. Now he's back and stirring the pot in a different sector: search consulting. To promote the birth of the Blamer Partnership, launched shortly after Thanksgiving, Mr. Blamer's taken up a good-old-fashioned direct-mail campaign, but with a bit of a twist. Over the past couple weeks, he has sent several large marketers and agency new-business executives a three-page manifesto that blames the woes of the search consulting industry on what he calls "shameful and unethical" practices. Needless to say, the claims in this missive -- among them, that "most consultants are double dippers," meaning they get paid by both agencies and clients, and that "most consultants lack agency financial experience" -- are raising the ire of many established search firms. Search consultants are often hired by clients to conduct ad-agency reviews and thus act as an intermediary between agencies and the multimillion-dollar marketer accounts up for grabs. Mr. Blamer's charges come at a time when the industry is already divided on the role of consultants and if they add value by leveling the playing field for agencies in reviews or whether they're a needless layer of red tape that needs to be paid for by a client, an agency or, as Mr. Blamer alleges, often both. Ark Advisors, a search consultancy that set up in the spring of 2007 that says it doesn't accept fees of any kind from agencies, said Mr. Blamer is painting too broad a brush of the consultant community, and his allegations are "mean-spirited" and "factually incorrect." "We were disappointed to learn of Mr. Blamer's wholesale indictment of our industry based on his perception of the questionable business practices of a few firms," the firm said in a statement. "The overwhelming majority of search consultants perform valuable and critical services for their clients and are valued and respected for both their expertise and integrity," Ark said. Mr. Blamer's also calling for the leading agency trade group to take action against his allegedly unscrupulous competitors. "The bottom line is that this sh -- [sic] should stop, and the 4A's should call out those review consultants who are behaving in this unethical manner," he wrote. In an interview with Ad Age, Mr. Blamer, who estimates he's participated in more than 500 agency reviews over the course of his career, alleged that "the practice [of accepting money from both clients and agencies] is being done by consultants who control a wide majority of the reviews." He further alleged that some go to lengths to hide their improper behavior. "I think many of the clients who hire them don't know that they're accepting money from agencies." Asked why he's willing to hurtle accusations at competing firms but not name names, he said he wasn't yet prepared to do so, but might, if he felt he had enough evidence, sometime in the future. "I think everyone knows who they are," Mr. Blamer said. "I know who I used to pay as a CEO." Mr. Blamer's public rallying against many in the search consultant community comes as he contributes to what, compared with just five years ago, is a spike in the number of firms and individuals running reviews on behalf of marketers. Making matters muddier for clients, it's a sector of the industry that is not regulated and for which there's no real accreditation process. For its part, the 4A's says it continues to stand by guidance it released some six years ago. The organization also says, to some degree, the biggest problem is agencies themselves; if there are firms charging for inclusion in reviews, and agencies are going along with it because they're too afraid of the alternative, it's unlikely the practice can ever cease. "We have issued guidance, which is the joint 4A's and ANA 'Rules of the Road' for search consultants, and we ask consultants who are listed on our website to endorse those rules as a certification requirement for listing," said Tom Finneran, the trade group's exec VP-agency management services. "The 4A's is not an enforcement organization -- we have no enforcement powers or authority -- but what we endeavor to do is to suggest guidelines and best practices. The nuances that Steve talks about are going to be determined by the marketplace, by clients and those agencies who decide to participate under certain terms, and those who don't." Mr. Finneran added: "We have some degree here of the pot calling the kettle black. It's to me very ironic that he's calling out other search consultants for conflict of interest, when, if you look at his model, he says 'Don't pay me a fee, I'll fund my money out of how much I cut agency compensation.' His view is that's not a conflict, and the 4A's has a longstanding belief that contingency compensation -- whether it's an auditor, search consultant, or something else -- that's based on reducing an agency's compensation for work is inherently a conflict of interest." (Mr. Blamer denies this is the way his firm works and says he has a variety of above-board options for compensation in place.) "He's implying that most consultants are bad and implying we're not following the good processes he's proposing, without knowing whether or not we are," said Joanne Davis, an established and well-known consultant in New York currently managing pitches for fast-feeder Sonic and Exxon Mobil. "How could so many of us be in business for so long if we were suboptimal?" At least one firm, however, is siding with Mr. Blamer. "Our firm is solidly behind Steve's comments," said Jane Bedford, founder of the Bedford Group, an Atlanta-based search consultant that's been around since 1986. "I reject the idea of agencies being charged a 'fee' for listing in the search firm database," and "I agree that clients' interest are being compromised as a result of 'double dipping' as Steve characterizes the practice," Ms. Bedford said. "A firm helping a client to find [its] ideal partner must have loyalty only to one ... the client for whom the consultant is working." To what degree the search consultant community will be divided over Mr. Blamer's claims remains to be seen. But whether or not he's part of their club seems to be of little interest to Mr. Blamer: "If they're not accepting money from agencies, good for them, they're on my side of the table. And if I pissed people off, good. It's not the first time in my life, trust me."

Blamer Roils Agency Consultants With 'Double-Dip' Charges

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