Ad agencies to brush up on communication skills

Media&Marketing: The last time you went to the doctor it probably cost you €40. You sat in the waiting room, maybe reading a magazine. There was a little sign up that said: Doctor's Appointment €40.

After you spent 15 minutes or so with the doctor, you promptly paid your €40. You didn't haggle over the price or tell her that you'd send in the head of procurement to negotiate a reduction on the costs on your behalf. The doctor didn't add a 17.65 per cent mark-up to the €40 invoice.

You didn't tell the doctor either that he was on a list of five doctors you planned to meet that day and you'd be back to him if indeed you thought his advice was worth paying for.

Maybe you thought about telling him that if the prescription you were about to fill actually solved your aches and pains, you'd be back to pay him the €40 within 60 days or so.

It's quite likely that the doctor didn't offer you two visits for the price of one. Nor did he tell you that if you spent €400 with him in the next six months, he'd give you €50 back as a volume rebate.

If your doctor did, would it seem a little strange? Would you value his advice a little less?

Clearly I am exaggerating a little to illustrate a couple of important points.

Advertising is a professional service that exists to build brands and deliver profit to a client's bottom line.

Is something that is capable of building your business worth paying for properly? And if you agree advertising can work, then how much should it cost?

Clarity and transparency on how the advertising industry charges for its services is vitally important. Undoubtedly, some of the current charging structures can be somewhat confusing to clients. For a full-service account where your agency books and plans the media, and develops the creative work, it is not unusual to be presented with an agency cost proposal that includes fees, media commission, a mix of both fee and commission and often third-party costs marked up by an additional 17.65 per cent.

Mr Brian Ross of Agency Insight, whose company assists clients in reviewing both their existing agency arrangements and in the selection of new client/agency partnerships, believes "more work can be done in linking agency remuneration to value creation, although things are changing".

"Agencies can often fail to demonstrate the value they are capable of creating in the context of remuneration negotiations," he says. The industry collectively does not appear to have tackled this issue with the focus it really needs to ensure that clients are clear what exactly they are paying for.

Advertising agency remuneration in the end always boils down to people. How many of them, how good, working how many hours, costing how much, plus overhead and profit.

In the end, all client/agency remuneration negotiation comes back to this core reality.

That means agencies must operate professional systems of accurately capturing and recording the costs associated with each employee who works on a piece of business.

Mr Ross comments that "there seems to be too few agencies with proper timesheet systems and comprehensive analysis".

There has never been a more urgent priority for the advertising industry, in partnership with clients, than the need to track, monitor and communicate the value it can create.

The Institute of Advertising Practitioners in Ireland (IAPI) recorded advertising spend of €1.03 billion in 2002. The IAPI's advertising effectiveness programme (IAPI AdFx) in the same year received a disappointing 40 entries.

The industry needs to grapple with communicating its capability in creating consumer demand. We have an important story to tell, we just need to tell it. For an industry that prides itself in communication strategy and execution, that shouldn't be too tall an order.

Digicel and cricket

Digicel, the Caribbean mobile phone company chaired by Mr Denis O'Brien, has secured a "multimillion" sponsorship contract with the West Indies cricket team.

The deal will see Digicel become official sponsor of the West Indies test and one day international sides. It is the first ever home and away agreement entered into by the West Indies.

Mr O'Brien said he took "enormous pride" in the sponsorship. "We will add new energy into West Indies cricket through our incentives and youth programmes. This will encourage more great performances and foster future cricket legends," he said.

Digicel has estimated annual revenues of $276 million (€224.609). In some Caribbean markets it has won market share of almost 70 per cent against the previous market leader Cable & Wireless since launching three years ago.

GSK appoints FHS

After a five-way pitch, GlaxoSmithKline (GSK) has appointed Fleishman-Hillard Saunders (FHS) as its public relations partner. FHS will work with GSK across a range of therapy areas including neurology, respiratory and travel vaccinations.

Ms Orla Burke, the director of healthcare, who joined FHS 10 months ago to head up its new healthcare public relations communications division, said the account "represents a significant win" for the company.

Bernie is an ad star

Advertisements featuring Bernie, a lovely old lady in a pink raincoat, have appeared in a number of Ireland's leading magazines including the RTÉ Guide and In Dublin.

In the adverts, Bernie tells us that she is "sick to death of watching you lot fighting over my money. I am not dead yet. So, here you go. I'm spending it. I am putting this message in every magazine I can find, and I will keep doing it until the money is gone."

The Periodical Publishers Association (PPA) is behind the campaign, developed by Cawley Nea/TBWA, and it is designed to demonstrate the effectiveness of Irish magazine advertising.

According to Ms Grace Aungier, chief executive of the PPA, which represents 178 Irish magazines, independent research indicated that consumers have a closer, more personal relationship with magazines. "The level of consumer interest has been phenomenal with phone calls to the magazines offering support for Bernie.

"One caller rang offering Bernie a case of wine," said Ms Aungier.

Some Irish Tequila

Cawley Nea/TBWA has announced the launch of Tequila\Ireland. Tequila is the TBWA worldwide group integrated and direct marketing communications brand.

Mr Peter Cahill, who heads up the Irish operation, held previous Managing director posts at Tequila\Hakuhodo London as well as TBWA\H\Europe in Amsterdam.

• Orlaith Blaney is managing director of McCann Erickson Dublin. Emmet Oliver is on leave.