Here’s an excerpt from our April 22 cover story.
Why do most top agencies take a pass on business from the capital?
U.S. frigates loom menacingly off the Canadian shore, while folk hero Laura Secord runs 32 kilometres through the woods to warn of the impending attack and soldiers amass for battle, bayonets at the ready, mud squelching around their feet. A Hollywood-style voiceover intones, “200 years ago, the United States invaded our territory.”
It looks like a trailer for a big-budget historical drama, but it’s actually a one-minute TV spot, the centrepiece of a $1.3 million TV and internet advertising campaign commemorating the 200th anniversary of the War of 1812.
According to the most recent “Annual Report on Government of Canada Advertising Activities,” “War of 1812 – The Fight for Canada” was part of the $78.5 million spent by the Harper government on advertising during fiscal 2011-12.
The Government of Canada represents not only the biggest creative assignment promoting the country (sorry, Molson), but one of the biggest in the country. The federal government spent $108.6 million on advertising in 2011 according to Nielsen, ranking fourth among the nation’s biggest advertisers – nestled between third place Rogers Communications and fifth place BCE Corporation.
For a client of such size and complexity, the Government of Canada advertising account is serviced by an eclectic – some might even say improbable – group of agencies. Much of the work is produced by little-known (outside of Toronto anyway) independents, joined by a smattering of “name” agencies like Ogilvy and KBS.
Many of these advertising contracts are set to expire in May. Yet there seems to be little industry buzz about the prospect of landing any pieces of a large assignment pie. It is an oversized piñata of government dollars that few seem willing to even take a swing at.
The silence is telling, particularly since there’s zero chance the industry would greet a review of such a large private sector client with the same indifference. Not so long ago, it would have been easy to point the finger at political partisanship as the driver behind the ad industry’s lack of interest in the Ottawa ad market. But those AdScam days, when the former Liberal government was found to be doling out work to Liberal-friendly agencies, are behind us.
Instead, Marketing took the pulse of some of Canada’s leading agencies and found the industry has a lot to say about the real reason they aren’t lining up to chase more business through the federal government’s agency procurement process, even though most spoke almost exclusively off the record (it is tax season after all and it helps to keep the option open for future contracts). Talking to these executives, a picture emerges of government contracts like dollar bills in a wind machine: Close enough to grab, only to be suddenly whipped out of reach. Agencies say they have grown tired of looking foolish, snatching at the promise of elusive contracts.
Specific reasons for eschewing the government advertising assignment range from an undue emphasis on price to application forms “like phone books” to a significant cultural difference for government work that requires agencies to divide staff who work on government from those who work on private sector accounts – a kind of creative profiling, if you will.
The most common complaint is that getting into the government agency pool post-AdScam has simply become too onerous. One agency representative said it involved filling out “countless pages” just to even begin a conversation about a possible working relationship. “I think creative people would unanimously agree that bureaucracy and committee is not the path conducive to great work,” he said.
One Toronto agency head wonders if the dearth of networked agencies on the government list might simply be a result of “procurement run amok,” the result being that the process of getting onto the government’s agency roster is simply impenetrable to all but a few agencies well-versed in process.
The question, he says, is whether such decisions are coming at the expense of effective government advertising.
“The only thing people want to make sure of is that cronies never get business from government accounts… but they never ask if the taxpayer is being well served,” he says. “There’s very little analysis of whether government advertising is effective in meeting its social marketing objectives. There’s a lot of analysis about whether or not it’s partisan.”
Even those agencies on the government’s list of advertising suppliers acknowledge the complexity of the application process. “To fill out the document is hard,” says Dany Renauld, co-president of Montreal and Quebec City agency Brad. When his agency first responded to the RFP, it took a full-time staff member a full month to fill out the documents, he says.
“We’re filling out an RFP every week and it’s pretty much standard,” says Renauld. “But the government is a completely different questionnaire. You need to start from scratch on everything. It’s the government and it’s [all about] process.”
Another agency executive, also speaking anonymously, describes the multi-stage application process experience as a bureaucratic nightmare, after which the government gives the business to agencies it has always used because they know the client intimately.
“The weighting of the procurement process always leans in favour of the agency [that] has more years experience on a particular segment or ministry, versus the one who has the best ideas,” said the agency head, noting that the process is the same regardless of whether it’s for a $150,000 project or a multi-million assignment.
There is also unnecessary duplication he says. “If I added up the total hours our agencies spend filling out the exact same information for every RFP, only in different formats or versions, it would amount to hundreds of thousands of billable hours,” he says. Even the RFP for a small assignment can run about 65 pages, he said.
Laments another agency head: “It takes a very smart person days to even understand what they want. They are written in such an incomprehensibly dense way, it is murder.”
But if the paperwork is murder, the continued downward pressure on rates is raw slaughter. One agency head said he stopped pitching because of a perceived overemphasis on cost. His agency got an “exceptionally high mark” on its qualitative score on three separate occasions, he says, only to lose the business on rate each time. The agency lowered its rate, and was again unsuccessful.
After performing some quick calculations on what his agency was told was the winning bid, he calculated that the winning agency was doing work in the $75 to $80 an hour range; the industry standard is $140 at the low end, he says. His agency has no plans to pitch the business again unless there are some assurances that quality will be fairly weighted. “Right now the process seems to be rigged so agencies willing to pitch at low-ball rates will win on those assignments,” he says.
There’s more! To read the full article in our April 22 issue (available on retail newsstands and on the iPad), subscribe today!
