Agencies take stand against Hilton idea grab

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A review for a $40 million piece of business is causing a few ad agencies to draw a line in the sand over how much intellectual property they'll give up for free.

Some ad execs are spitting mad that Hilton Hotels is demanding that any contenders for the account sign away their rights to the ideas they pitch-even if they don't win the business. The requirement, part of a non-disclosure agreement agencies have to sign in order to participate in the request for proposals process, has touched a lot of nerves in an industry that sees ownership of ideas as crucial to their futures.

Andy Berlin, chairman, Berlin Cameron/Red Cell, New York, part of WPP Group, who earlier this month at the American Association of Advertising Agencies management conference urged agencies to hold on to the right to their intellectual property, is disturbed by Hilton's stance. "As a matter of policy, it is a bad idea for any agency to give away their most valuable products, which are their ideas. But there's always someone hungry enough, and opportunities like this are enticing. It is something we wouldn't do, but it's a free country and you can stick your hand in the disposal and try to take the fork out anytime you want."

"If we as an industry don't take a stand and reinforce the value of a great idea to our clients, then we're doomed to become a commodity," said David Lubars, chairman-chief creative officer of Omnicom Group's BBDO North America. "I'm politely declining the opportunity to give away our ideas."

"It's flat-out arrogant," said another veteran agency new-business executive who asked to remain anonymous. "It takes egregious to a new level."

While not unusual for agencies to be asked to give up their right to ideas, typically they are either compensated for out-of-pocket expenses accrued during a pitch or they can negotiate their way out of such provisions. "I don't want to get a few thousand bucks for an idea that's worth millions to them. If you want our ideas, you have to hire us," Mr. Lubars said.


Abby Spatz, Hilton's senior director-advertising, was unapologetic about the process.

"We weren't seeking to buck a tradition or start a new trend," Ms. Spatz said. "We really wanted to put this out the way we wanted to put this out. As a pre-eminent brand we don't have to follow rules and convention."

Agencies could have asked in advance for a stipend, she said, though none did. She declined to say which agencies are participating in the review

The issue of compensation was a top concern at the 4A's management conference, and several top executives joined Mr. Berlin in calling for a new compensation model in which agencies share more in marketers' financial success. In an interview, 4A's Exec VP Tom Finneran said "it is troubling that agencies are being asked to assign their ideas and yet not be able to use them for their economic benefit."

nice try

One agency executive opined that the industry unhappiness over the Hilton RFP would have little effect unless "every single agency agrees." Indeed, despite the outcries, a number of prominent agencies are expected to participate, including incumbent Foote Cone & Belding, Chicago and Irvine, Calif., and McCann Erickson, New York, both part of the Interpublic Group of Cos.

Industry executives said the Hilton non-disclosure agreement stands out because it's being issued at the beginning of the review. These agreements customarily appear in the final stages when strategic and creative ideas are being discussed and confidentiality is more of a priority, said search consultant Hasan Ramusevic, president of Hasan & Co., Raleigh, N.C.

"I would urge agencies not to sign over ideas for free," Mr. Ramusevic said.

contributing: rich thomaselli, james b. arndorfer

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